Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MG-NREGS) and person days of work generated under it have both fallen to hit their 17-month lows in September this year, possibly indicating revival of economic activities in urban centres.
Official data showed only 2.86 crore persons demanded work in September compared with 3.59 crore in March 2021, 4 crore in April, 4.15 crore in May, 5 crore in June, 4.26 crore in July and 3.21 crore in August.
The number of persons demanding work under the popular scheme had hit a nadir in April 2020 (2 crore) but jumped in May (5.4 crore) immediately after the lock-down was eased; the demand peaked in June 2020 (6.35 crore). In March, 2020, 2.76 crore only persons demanded work.
The consumer pyramids household survey data of the CMIE corroborates the official MG-NREGS data.
According to the CMIE’s data, employment in September 2021 was estimated to be at 406.2 million, the highest in 20 months or since the Covid-19 shock in March 2020.
At the same time, the number of ‘farmers’ in the country fell from 116 million in August 2021 to 113.6 million in September 2021, as per CMIE. “This fall could imply a combination of two factors. First, some salaried jobs which were lost earlier have been revived and some of the labour that migrated to the farms has come back to these salaried jobs. Second, economic activity is likely to have revived to absorb additional people in the form of daily wage labourers,” said Mahesh Vyas, MD & CEO, CMIE, in a recent article.
According to the MG-NREGS dashboard, generation of person days under the scheme this year till October 4 this fiscal stood at 202 crore compared with 389.17 crore recorded in the entire 2020-21. Monthly person days generation of work also fell to a 17-month low in September this year at a little over 18 crore. The data could see some revision in the coming days as pan-India compilation takes some time.
The Centre had been generous with the allocations for the MG-NREGS (the scheme’s budget outlay for the last fiscal year was Rs 1.11 lakh crore RE compared with Rs 68,265 crore in 2019-20).
The Budget outlay for the scheme for 2021-22 is Rs 73,000 crore. The government might have to allocate more fund to meet the need for the demand-driven scheme as the Centre has already released close to Rs 58,597 crore to run the scheme.
The scheme’s mandate under the MGNREG Act, 2005, is to provide at least 100 days of ‘wage employment’ in a financial year to every rural household whose adult member volunteers to do unskilled manual work. However, an average of only 51.52 days of work were provided to such rural households in 200-21 and this year, so far, the figure is 35.