If you are a fence sitter on the Mahatma Gandhi National Rural Employment Guarantee Programme (MNREGA), not sure whether it is good or bad, here is data to confuse you some more. As payments for jobs under the scheme remain sluggish, there has been a 60% increase in households registering for the programme in the August to November period this year.
The higher registration of households is expected to push rural demand in the next financial year and keep money flowing into the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana.
The twist is that typically the demand for work declines between June and November, when farming gathers pace. But after two years of bad monsoon, causing several states to declare a drought, things are breaking out of pattern.
The growth in agriculture — which contributes 15% of the GDP but supports two-thirds of the population — has been primarily due to diversification into non-crop activities, according to the mid-year review of the economy by chief economic adviser Arvind Subramanian.
Rural wages in recent months have grown just 5%, compared to 15% in the earlier years. The downturn in real estate and construction has made matters worse; this is where a large number of rural folk used to work after moving to cities, especially in the non-farming season. The mid-year review talks of a sharp decline in disbursement of credit to the construction sector in the first half of the financial year.
“Latest data suggests that MNREGA is going strong and there is demand for the scheme, besides it is also being linked to asset creation,” said Soumya Kanti Ghosh, chief economic adviser to the State Bank of India.
A senior finance ministry officer, who did not want to be named, said the government will continue to focus on MNREGA. “The rural sector is extremely critical and this directly involves job creation. We are going to take all steps necessary to strengthen it.”
The 60% rise in household applications goes against how things were. A study by the State bank of India shows the average number of days of employment per household under the scheme is declining. In 2015-16, it fell to 35, from 40 in the previous year. Demand for jobs under the scheme is the highest in drought-hit states like Madhya Pradesh, Gujarat and Uttar Pradesh.