By Priyansh Verma
After a let-up in FY22 and FY23, demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has risen again in the current fiscal year, indicating that employment opportunities in urban areas remain low. The number of persons seeking work under the scheme were 171 mn in April-August of the current financial year, 19% higher than 144 mn in the corresponding period of 2019-20, the immediate pre-pandemic year, as per the official data dashboard.
And the number of person days (work) generated were at 1.69 bn in the first five months of the current fiscal as against 1.22 bn in the corresponding period of 2019-20.
In the past five financial years, work demand under MGNREGA peaked in 2020-21, the pandemic year, the first quarter of which saw total lockdown across the country. In the first five months of that year, numbers of persons who demanded MGNREGA work had jumped 47.5% year-on-year to 212 mn.
Later, as the Covid-19 pandemic waned and restrictions eased, the work demand in the first five months of 2021-22 and 2022-23 fell 6.5% and 17.4%, year-on-year, respectively. But, in the current fiscal year, the demand for work rebounded—in April-August, number of persons seeking work were up 4% from the year-ago period.
MGNREGA, is a scheme under the Ministry of Rural Development, aims at providing at least 100 days of guaranteed wage employment in a financial year to every household in rural areas of the country, whose adult members volunteer to do unskilled manual work.
“The high demand for MNREGA in the post pandemic period provides significant empirical evidence that wage income is on the rise to support the livelihood crisis when other employment avenues are drying up,” said Lekha Chakraborty, professor at National Institute of Public Finance and Policy.
According to data from the Centre for Monitoring Indian Economy, rural unemployment rate in July declined to 7.89% from 8.73% in June, whereas the urban unemployment rose to 8.06% from 7.87% in the same period.
For the current financial year, the union government hiked wages under MGNREGA in the range of Rs 7 to Rs 26 across states. The highest wage under the scheme is Rs 357 per day in Haryana, and the lowest is Rs 221 per day in Chhattisgarh.
Even though the number of work demand by persons and person days generated under the scheme move at comparable rates (see chart), a closer look at the data reveals the ratio between the two has decreased—in fact in Apr-Aug, the ratio was the lowest in last five years. This indicates employment under the scheme is not adequately addressing the demand, possibly signalling the government’s intention to regulate expenditure under the programme.
“There is a huge deviation between people seeking job guarantee and the jobs provided under MGNREGA,” Chakraborty said.
MS Raunaq, member, Peoples’ Action for Employment Guarantee said the lower person days generated in the current year under MGNREGA could be due to non-payment of wages on time and lower Budgeted allocation. “Under the National Mobile Monitoring System (NMMS), attendance of MGNREGA workers is taken digitally on a daily basis…if the attendance is missed then the payment for the particular day is not given to worker. This system is not effective, and discourages workers from availing employment,” he said.
For 2023-24, the centre has allocated Rs 60,000 crore in the Budget estimate for the scheme, which is 33% lower than the revised estimate of Rs 89,400 crore in the previous fiscal year. In the past seven years, the revised outlay under MGNREGA rose significantly from the budgeted figures due to a sharp rise in demand for jobs. This year too, as demand for jobs remain high, the revised estimate could be higher than the Budget estimate. Officials have said the demand-driven scheme won’t face any funds crunch.
For better utility of the MGNREGA allocation, a government panel headed by former rural development secretary Amarjeet Sinha, had recommended that 70% of the MGNREGA funds be channelised in about 49% of the blocks which includes 2,500 water-deficient blocks and 1,000 poverty-ridden blocks.