Centre plans to increase MGNREGS targets again
As India stares at its worst recession ever in the current financial year, the Centre is preparing to raise the targets under its flagship rural jobs programme, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which has enrolled one in every five Indians.
The aim is to provide 320 crore days of work—about 40 crore days higher than the first estimate -- after the world’s largest employment scheme attracted unprecedented demand for work in the wake of the Covid-19 pandemic, top officials said on condition of anonymity.
Eight big states including the most populous, Uttar Pradesh, have requested the Centre for more MGNREGS work allocation. The demand coincides with Indian economy’s sharp contraction by 23.9% in the first quarter.
Many economists have argued that the country may suffer a demand shock in the coming months because of increased unemployment and wage cuts. The Reserve Bank of India’s Monetary Policy Committee (MPC) predicted on Friday that India’s economy may shrink by 9.5% this fiscal year, its worst recession ever.
In May, the government pumped in an additional ₹40,000 crore to raise the MGNREGS budget for the year to staggering ₹1 lakh crore as a part of its stimulus package. It also raised the employment target from the first estimate of 281 crore days of work to 300 crore days of work. Officials said 221.9 crore days of work had already been completed as of October 7 and more than ₹65,000 crore been released till September 5, signalling the requirement of additional funds for the demand-driven programme.
Internal notes of the union rural development ministry show that since May, the average number of workers in every month has been substantially higher than the corresponding month in FY 2019-20.
“Average number of persons to whom work offered in May has been 2.51 crore per day, which is 73% higher than the one offered in May last year, which was 1.45 crore persons per day. Similarly, work was offered to an average of 3.35 crore people per day in June, which is 92% higher than the corresponding period last year,” said one note.
“The July average was 114% higher, August (97%), September (86%) and October average was 109% higher than the last year,” said the note, which was reviewed by HT. Top officials also said that even after the target was enhanced to 300 crore days for work for the fiscal year, eight states demanded more allocation of work.
“Big states such as UP, Rajasthan, Telangana, Andhra Pradesh, Odisha. Chhattisgarh, Madhya Pradesh and West Bengal have now asked for additional labour budget. We are looking at generating 320 crore days of work now,” said a top official, requesting anonymity.
Former union rural development secretary Jugal Kishore Mohapatra said: “The enhanced target of 320 crore days of work is doable. But the need of the hour is to focus on areas where poverty levels are high but demand is low due to various reasons. Like, Uttar Pradesh has a poverty share of 20% but its share in MGNREGS is 10%. This is not a reflection of demand but capacity constraints. Effort should be to augment demand in such places for a more equitable distribution of MGNREGS benefits.”
MGNREGS guarantees 100 days of work a year to at least one member of every rural household.