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Rural labour market goes from boom to bust

The decline in labour-to-land ratio till 2012, due to migration of farm workers into construction and the government’s increased spending on social sector schemes, contributed to a rise in workers’ incomes.

india Updated: Sep 07, 2015 13:04 IST
Kumar Sambhav Shrivastava
Kumar Sambhav Shrivastava
Hindustan Times
Labour market,Daily-wage workers,MGNREGA

Three months ago, when daily-wage workers Bunty and Baburaam Baherwa realised they could no longer make a living in Jaipur, they left for their ancestral village in Madhya Pradesh. But things were no better back home. Unseasonable rains this year damaged most of the Rabi crop on their four-bigha land. Income from the remaining yield was just enough to sustain their family.

“The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is non-existent. Only one member from a family is registered under the scheme and payments for last year are still pending,” said Bunty. “I got private work of loading boulders in tractors for five days on petty wages in the whole month.”

After the income exhausted, he took a loan of Rs 1,500 that he spent on his stay in the village. With no hope of work, he borrowed Rs 1,000 and left for Jaipur once again.

Residents of Dhondsar village in Rajasthan said fewer workers were going to cities for jobs but those who stayed back were not getting work either.

“The number of people who would go to Jaipur for daily-wage work and come back has plummeted from about 300 to 150 in one year,” said Dinesh Sharma, a local resident.

His neighbour Ramchandra said the number of days of work a labourer could get in the village had also come down from 15-20 to 5-10 in six months. The situation is similar in other states.

In MP’s Basamati rice belt, the price that migratory workers from Bihar get to transplant the crop has fallen from Rs 2,500 last year to Rs 1,500 this year, said Pervez Khan, a farmer from Chitauda village. This was not the situation in rural India till three years ago. The decline in labour-to-land ratio till 2012, due to migration of farm workers into construction and the government’s increased spending on social sector schemes, contributed to a rise in workers’ incomes. Several studies have said MGNREGA contributed in increasing rural incomes and containing migration from rural areas.



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“Till two-three years ago, if you travelled to rural areas, you would find contractors complaining of labour shortage and high wages,” said Richard Mahapatra, of non-profit Centre for Science and Environment.

Things, however, seem to have changed in the past two years. Consecutive crop failures due to droughts and unseasonable rains brought down the agricultural growth rate. Government cut expenditure on MGNREGA by 3% and 36% respectively in the past two years.

All this led to a sharp decline in the rural wage growth rate— it dropped to 4.7% in June this year after hovering at an average of 18% for five years. To make life more difficult for rural labourers, consumer prices kept increasing at a much higher pace than daily wages.

Read:Rural migrants return to villages but find no work there either

First Published: Sep 07, 2015 12:55 IST