Demand for work under rural jobs scheme remains subdued in June

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For the second month in a row, the demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) remained lower than 2020, which experts attributed to revival of economic activity.

In June 2021, around 3.25 crore rural households sought work under the scheme which is 24 percent lower than June 2020. Meanwhile, 4.59 crore persons sought work in June this year which is 23.1 percent lesser than the same time in the previous year.

According to K R Shyam Sundar, Professor, HRM, XLRI, Xavier School of Management, MGNREGA demand has weakened as workers are returning back to cities as economic activity has resumed post unlocks by the states. He further noted that since the cropping season has begun so a lot of workers would have also switched to agriculture rather seeking work under the scheme.

A senior research fellow from a Delhi-based think tank said: "The drop in demand in June this year could be due to a sharp drop in COVID-19 cases and the unlock by various states. So a lot of workers have started to move back to the cities ."

"Another reason could be that the cropping season has started so a lot of households will now be engaging in agriculture instead of seeking work under MGNREGA," the person added.

In May this year, about 2.46 crore rural households sought work under the scheme which is 28 percent lower than May 2020. Meanwhile, 3.60 crore persons sought work in May this year which is 26.1 percent lesser than the same time in the previous year.

The experts had then attributed the drop in demand for work to the penetration of Covi19 in rural years during the second wave and the resultant fear to catch it at the worksites.

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.

The flagship scheme rolled out by the Congress-led UPA government in 2006 was later 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.

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.

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