Demand for work under the Mahatma Gandhi National Rural Employment Scheme (MG-NREGS) rose to a six-month high in February, signalling that economic activities in urban centres haven’t picked up sufficiently yet to attract migrant workers from villages.
The demand-driven MG-NREGS provides fall-back option for livelihood for the rural youth when no better employment opportunity is available. The demand for work under the scheme is influenced by various factors such as rainfall, availability of alternative and remunerative employment opportunities outside the scheme.
The MG-NREGS dashboard showed 30.58 million rural youth demanded work under the scheme in February. In August FY22, a higher number of youth (31.74 million) demanded work. During the kharif harvesting months of September-October, demand for work under the scheme was the lowest so far in the current fiscal at around 25.5 million in each month.
Of course, person days of job creation under the scheme in February was the lowest in the last three months which shows that the government, given fiscal constraints, has become more economical with release of funds for the scheme.
It had raised the Budget outlay for the scheme and released funds liberally when the pandemic was wreaking havoc with the country, especially during the first wave.
The tightening of the Budget has led to a fall in the work offer under the scheme. A rural household received just 47.97 days of work under the scheme so far in the current fiscal year. This is against the scheme’s mandate to provide a minimum of 100 days of guaranteed wage employment to every beneficiary household in villages whose adult members volunteer to do unskilled manual work in every financial year. The average was higher at 51.52 days in the entire last fiscal.
The number of households which have availed work during the current fiscal so far is slightly below 70 million compared with 75.5 million in the entire last fiscal. In FY20, 54.8 million household got work compared with 52.7 crore in FY19.
Against the total expenditure requirement estimated of Rs 1 trillion under the scheme so far in the current fiscal year, the Centre has released Rs 88,526 crore. Given that revised estimate in the recent Budget is Rs 98,000 crore, an additional amount may be needed just to keep the current pace of jobs supply through the year.
Compared with an allocation of Rs 1.1 trillion for the scheme in the last fiscal year, the budgetary outlay (BE) in the current fiscal was Rs 73,000 crore. However, an additional Rs 25,000 crore was allocated for the scheme when supplementary demands on expenditure was placed in Parliament. In the Budget for 2022-23, allocation for the scheme has been kept at Rs 73,000 crore as well.