10-August-2024-Special-Article

DECLINE IN DEMAND FOR WORK UNDER MGNREGS

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is a flagship program designed to provide employment to rural households in India.

A significant decline in demand for work under this scheme was reported in July 2024, indicating various economic and environmental factors at play. Here’s a detailed analysis of the situation:

Current State of MGNREGS Work Demand

• Decrease in Work Demand: In July 2024, about 22.80 million individuals sought employment under MGNREGS, showing a 21.6% decline compared to July 2023.
• Household Impact: This drop affected 18.90 million households, a decrease of 19.5% year-over-year and 28.4% compared to June 2024.
• Month-to-Month Decline: There was a significant 33.4% reduction in the number of people seeking work from June to July 2024.
• Regional Variations: States like Tamil Nadu, Andhra Pradesh, Karnataka, and Telangana reported fewer requests for work.

Reasons Behind the Decline

Economic Growth:

• Increased Employment Opportunities: A robust economy often leads to more job opportunities outside of MGNREGS, reducing the need for the scheme.
• Economic Growth Rates: India’s economy grew by 8.2% in FY 2023-24, with projections of 7% growth in FY 2024-25 and 6.5% in 2025-26, outpacing global averages.

Monsoon Impact:

• Seasonal Migration: During the monsoon season, many rural workers migrate back to their villages for agricultural activities, decreasing demand for unskilled labor under the scheme.
• Improved Rainfall: Abundant rainfall in July 2024 alleviated the previous 11% rainfall deficit, encouraging agricultural work over MGNREGS employment.

Overview of MGNREGS

Launch and Purpose: Established in 2005, MGNREGS is one of the world’s largest employment guarantee programs, providing 100 days of work annually to rural households.

Employment Guarantee: It ensures that rural adults are given work within 15 days of requesting it, or they receive an unemployment allowance.

Implementation:

• Monitoring Body: Managed by the Ministry of Rural Development in collaboration with state governments.

Key Features:

• Legal Guarantee: Work must be provided within 15 days, or an unemployment allowance is paid.
• Women’s Participation: At least one-third of the beneficiaries must be women.
• Social Audits: The Gram Sabha is responsible for auditing the works done under MGNREGS.

Objectives:

• Poverty Alleviation: Aims to improve rural incomes and reduce poverty by providing employment.
• Economic Balance: Seeks to bridge the gap between the wealthy and the poor in rural areas.

Current Status:

• Budget Allocation: Rs 73,000 crore allocated for FY 2023-24, showing an increase to meet rising demand.
• Employment Generation: Over 300 crore person-days of work provided in FY 2022-23.
• Wage Increases: Average wage increased to Rs 289 for FY 2024-25 from Rs 261 in FY 2023-24.
• Project Focus: Emphasis on sustainable projects like water conservation and rural infrastructure, with over 60% of works related to natural resource management.

Challenges in MGNREGS Implementation

Wage Determination Issues:

• Minimum Wage Concerns: Current wage rates are based on the Consumer Price Index for Agricultural Labourers, which may not reflect the actual costs of living. A shift to the Consumer Price Index-Rural is recommended.

Administrative Issues:

• Planning and Capacity: Many Panchayats lack experience in large-scale program planning. Inadequate administrative capacity affects implementation.
• Staff Shortages: Insufficient staff at Block and Gram Panchayat levels hampers planning and transparency.

Funding Concerns:

• Sustainability: The increasing budget for MGNREGS raises concerns about long-term financial sustainability, especially with a declining tax-GDP ratio.

Discrimination and Corruption:

• Gender and Social Biases: Despite promoting equal pay, discrimination against women and marginalized groups persists.
• Corruption: Corruption and irregularities, such as fake job cards, undermine the effectiveness of the scheme.

Recommendations for Improvement

Increase Entitled Workdays:

• Extended Employment Guarantee: Consider increasing the guaranteed work days from 100 to 150 to provide better support to rural populations.

Capacity Building:

• Training Programs: Enhance planning and implementation skills of Panchayat members through targeted training and guidelines.

Enhanced Monitoring:

• Technology Integration: Utilize technology, such as mobile apps and online portals, to improve transparency and monitoring of funds and project outcomes.

Updated Wage Rates:

• Adjust Wage Determination: Move to the Consumer Price Index-Rural for a more accurate reflection of living costs and regularly update wage rates to align with economic conditions.

The decline in MGNREGS work demand highlights both positive economic growth and seasonal factors affecting rural employment. Addressing the scheme’s challenges and implementing recommendations will be crucial for its continued effectiveness and sustainability.

Mains Question:

1. Discuss the impact of economic growth and seasonal factors on the demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in India. How can the scheme be improved to address the challenges it faces? (150 WORDS)