According to the Ministry of Rural Development, work demand under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) fell sharply in July 2024.
What Does a Decline in Demand for Work under the MGNREGS Indicate
- Current State of Demand for Work: Approximately 22.80 million individuals sought work under the scheme in July, reflecting a 21.6% decline from the same period in 2023.
- These individuals represented 18.90 million households, a decrease of 19.5% year-over-year and 28.4% compared to June 2024.
- On a month-to-month basis, the number of people seeking work dropped by 33.4% in July 2024.
- In July 2024, fewer individuals submitted work demands in key states like Tamil Nadu, Andhra Pradesh, Karnataka and Telangana .
Reasons For Decline in Demand Work
Strong Economic Activity
- Work demand under MGNREGS usually drops when better-paying employment opportunities are available due to strong economic growth, possibly reflecting robust economic activity.
- The economy grew at a higher-than- anticipated pace of 8.2% in the last Fiscal Year (FY) 2023-24.
- The International Monetary Fund (IMF) predicts India will be the fastest- growing major economy, with growth rates of 7% in FY 2024-25 and 6.5% in 2025-26, both exceeding the global average.
Impact of Monsoon
- The monsoon typically causes large-scale migration of rural workers to villages for crop sowing, reducing the demand for unskilled jobs under the MGNREGS.
- In 2024, abundant seasonal showers in July reduced the 11% rainfall deficit seen in June.
Mahatma Gandhi National Rural Employment Guarantee Scheme
- MGNREGS is one of the largest work guarantee programmes in the world launched in 2005 by the Ministry of Rural Development.
- It guarantees 100 days of employment each financial year for adult members of rural households willing to perform unskilled manual work at the statutory minimum wage.
Implementation Agency
- The Ministry of Rural Development monitors the entire implementation of this scheme in association with state governments.
Major Features
- The cornerstone of MGNREGA’s design is its legal guarantee, ensuring that any rural adult can request work and must receive it within 15 days.
- If this commitment is not met, an “unemployment allowance” must be provided.
- It requires that priority shall be given to women in such a way that at least one-third of the beneficiaries shall be women who have registered and requested for work.
- Section 17 of the Mahatma Gandhi NREGA, 2005 mandates the Gram Sabha to conduct social audits of works undertaken under the scheme.
Objective
- It was introduced with an aim of improving the purchasing power of the rural people, primarily semi or unskilled work to people living below poverty line in rural India.
- It attempts to bridge the gap between the rich and poor in the country.
Current Status
- Budget Allocation: For the financial year 2023-24, the government allocated approximately Rs 73,000 crore to MGNREGA, reflecting an increase from previous years to meet the rising demand for employment.
- Employment Generation: In the FY 2022-23, MGNREGA provided over 300 crore person-days of work, with approximately 11 crore households participating in the scheme.
- Wage Payments: The Centre has notified a 3-10% increase in the wage rates for MGNREGA workers for the FY 2024-25.
- The average wage for 2024-25 is Rs 289 as against Rs 261 for FY 2023-24.
- Project Focus: The scheme has increasingly focused on sustainable development projects, such as water conservation, afforestation, and rural infrastructure enhancement. Over 60% of the works undertaken are related to natural resource management.