Demand for work continues to remain high under MGNREGA

Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), by both households and persons, continued to remain at a high level during July.

During July this year, an estimated 3.09 crore households and 4.10 crore persons demanded work under MGNREGA.

What does this mean?

“The demand for work has remained elevated during July. It must be noted that this continued even after the unlocking by various states. It could have happened as many migrant workers are reluctant to go back to cities for work as there is a possibility of a third wave,” a senior research fellow from a Delhi-based think tank told Moneycontrol on condition of anonymity.

“Unlike the first wave, the second wave of COVID-19, which was more severe, had even reached rural areas,” he added.

K R Shyam Sundar, Professor, HRM, XLRI, Xavier School of Management said, "Labour market distress seems to be on despite relaxation in restrictions by the State governments. Labour market recovery is therefor a big question."

Government will have to pump in more money and consider an urban employment guarantee scheme. There cannot be a graver time than this to consider active labour policies, he added.

To provide work to migrants returning from cities to villages, the central government had pumped in an extra Rs 40,000 crore for MGNREGA schemes. The government’s objective was to ensure that the migrants do not face unemployment during the nationwide lockdown.

The government had allocated Rs 73,000 crore to MGNREGA for 2021-22. It is 34.52 percent lower than the revised estimate of Rs 1.1 lakh crore for 2020-21. The government had allocated Rs 61,500 crore in 2020-21.

What is MGNREGA?

It was rolled out as NREGA in 2006 by the Congress-led UPA government as a flagship scheme. It was renamed MGNREGA in 2009. It guarantees at least 100 days of employment in a financial year to unskilled rural households at a pre-determined minimum wage rate.

MGNREGA is widely attributed to have provided employment opportunities to millions of workers who shifted back to their hometowns and villages after having lost jobs in the wake of COVID-19 in 2020.

Under MGNREGA, 134.88 crore person-day work has been generated, as of August 5 this year. During financial year 2020-21, 389 crore person-day work was generated.

According to the data on MGNREGA’s website, 3.52 crore persons had demanded work under the rural employment guarantee scheme in April. It rose to 3.60 crore in May after the second wave of COVID-19 hit the country, and 4.50 crore more persons in June.

Meanwhile, 2.45 crore households demanded work under the scheme in April, which rose to 2.46 crore in May and further to 3. 25 crore households in June.