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The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) or popularly known as NREGA, an employment guarantee scheme which ensures 100 days of employment as a legal entitlement to every rural household whose adult members volunteer to do unskilled manual labour. MGNREGA, one of the largest demand driven public employment scheme in the world was made in to an Act by introducing a Bill in the Parliament in 2005. The Act made right to work a legal right ensuring basic income security to the rural masses.

The role of MGNREGA as a lifeline for the working poor in rural India has been proved once again with the experience of the COVID-19 induced nationwide lockdown.

Contribution during the COVID-19 pandemic

The nationwide lockdown which lasted more than two months resulted in millions of workers losing their jobs all over the country. Manual labourers in urban and rural areas which worked in informal and casual employment were the worst hit. An important feature of this casual workforce is that they originate from less developed rural locations to cities and urban agglomerations (UA) as seasonal or circulatory migrants. Once the economic activities came to a sudden halt in urban areas these workers had to turn back to their areas of origin. The two major saviour in this phase were- agriculture and the MGNREGA. Agriculture provided work in harvesting and post-harvest activities of the rabi crops during the months of April-May. The overflow of workers in these activities however brought the wages down.

As per the revised guidelines of the lockdown MGNREGA work was allowed from April 20, the number of households who got work in the same month was the lowest in several years at 95 lakh once the work started the number went up to 3.05 crore in May. The scheme turned out to be the main livelihood source for millions of migrants and other workers in rural India providing much needed daily wages and subsistence. Until the end of July when the agricultural operations again picked up during the sowing of the rabi crops there was an unprecedented surge in MGNREGA beneficiaries. The spike in the number of beneficiaries in this period has been higher than the annual surge recorded in the past many years. Data on the scheme portal show that up to 72 per cent more households demanded work in July 2020 than in 2019 in the same month and up to 66 per cent more households demanded work in August this year in comparison to August 2019. Estimates show that the demand for work under the scheme broke all its records since its inception with about 5.53 crore households availing the rural job guarantee scheme in just four-and a-half months of the current financial year. Available data also suggest that many states recorded a sharp increase in demand for work under the scheme. Some even meeting their annual quota of number of days within six months.

A possible outcome of this could be the drastic decline in the rate of unemployment in the country. In the month of July national unemployment rate fell to 7.4 percent from its peak of 23.5 per cent in April 2020. Rural unemployment specifically saw a significant drop to 6.5 per cent from 22.9 per cent during the same period (CMIE 2020). In addition to this, states such as Bihar, Madhya Pradesh, Chhatisgarh, Uttar Pradesh, West Bengal with high number of returnee migrants could bring down the unemployment rates by providing work under MGNREGA. Reports suggest that the scheme not only helped the unskilled workforce but also provided respite to the graduates and professional degree holders who lost their jobs in the cities and returned to villages.

Shortcomings and Scope for Improvement

When the ‘person days’ generated during the months from May to August this year stood much higher than last year of the similar period, there was also a demand and supply mismatch in the scheme. In June alone, while 4.1 crore households were in need of jobs under the scheme, work was supplied to only 2.8 crore households. Issues of it falling short of the demand remained from the supply side. Ground level reports and independent surveys reveal that finding work under MGNREGA was becoming difficult and households seeking work from village panchayats across many states reported having no work under the scheme. According to one such survey findings only 20 per cent of the households who were in need of work were able to find work under the scheme. Given that a large section of the worker households have already exhausted their days of quota there is an urgent need to raise the cap of 100 days of employment to 200 by making additional resources available for this. Pending wages in some states have been another issue which needs to be rectified.

Schemes which are targeted to empower and uplift the most vulnerable and marginalised come under criticism and usually portrayed as economic burden and wasteful expenditure. The Employment Guarantee Scheme also has been criticized on similar grounds. But the enormous contribution made by the scheme to save millions from hunger, starvation and destitution is there for everyone to see.

An employment scheme which has helped in curbing distress out-migration in many states by making hundred days of work a legal entitlement at the source can significantly add to asset creation and infrastructure development in rural areas if used innovatively and strategically. This can help creating sustainable livelihood in these areas. Given the current economic recession and slowdown in most sectors of the economy wages earned by the workers by working under the scheme can help in reviving the manufacturing and service sectors as the demand and spending on consumption items will increase. This provides all the reasons to not only continue but also further strengthen the scheme in the times to come.

- Prof. Shamsher Singh, Assistant Professor - Sociology

*Views expressed are personal.