MGNREGA stares at a tough challenge ahead as labourers return to villages

MGNREGA provides employment to around 50 million households annually and 70-80 million individuals have worked unĀ­der it in the past four-five years
Between April 17 and 22, Ra­jasthan recorded a 10-fold rise in the number of people receiving employment under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) — from 62,000 to 608,000.

In Maharashtra, the number of those seeking employment under the scheme in the same period more than doubled from 40,000 to almost 100,000.

In Bihar, MGNREGA work started in around 88 per cent of the state’s approximately 8,386 gram panchayats within the first few days of the lockdown restrictions being lifted for such work.

As migrant labour from the cities stre­am back to their villages, MGNREGA is expected to be­come their first source of em­ployment in the days to co­me, mainly after the ongoing Rabi harvest and subsequent Kharif sowing (in June) are over.

Can it fill the gap?

The migrants: The numbers involved are challenging. According to Ami­tabh Ku­ndu, Di­stinguished Fellow at Research and In­formation System for Developing Countries (RIS), the 2011 census put the number of mi­grants at around 450 million — 37 per cent of the country’s population then. Of this, some 56 million were inter-state migrants.

Kundu says if the same 2011 census numbers are extrapolated based on population growth figures, India should have 71-72 million inter-state migrants in 2021. Of this, around 45 per cent are expected to be in the working age bracket, according to Periodic Labour Force Survey (PLFS), while the rest are dependent children, non-working women and others. This means that as in 2020-21, India should roughly have 31-32 million wo­rkers. If we assume that one-third of these are in the informal sector, that comes to nine-10 million. Another nine-10 million are self-employed.


Kundu told Business Standard, “This means, as in 2020-21, there are roughly 18-20 million people who are at the risk of being rendered unemployed due to the lockdown in cities and will either seek to go back or are waiting to go back to their villages.”

In one of its estimates presented to the Supreme Court, the government said 500,000-600,000 inter-state migrants may have returned to their villages since the lo­ckdown. Kundu believes the number is more — 1.5-2 million — because many mi­g­rant movements have not been recorded. “I know of a district in Madhya Pradesh where local officials are saying that almost 20,000 people have come back from cities in the last few days,” he said.

MGNREGA’s role: Is the MGNREGA eno­ugh to absorb this huge reverse flow? Ac­cording to the MGNREGA website, the scheme provides employment to around 50 million households (HH) annually and 70-80 million individuals have worked un­der it in the past four-five years.

For 2020-21, the Centre has fixed an approved labour budget (the nu­mber of labour hours that will be needed to produce a certain unit of work) of 280.76 crore person days, just 1.44 per cent more than 2019-20. The average cost per person per day is yet to be worked out, but the 2019-20 figure of Rs 258.41 offers an estimate.

Let us assume that the approved la­bour budget is a correct estimation of the expected pre-pandemic work demand in 2020-21. For 2020-21, the Union Budget presented in February had allocated around Rs 61,500 crore for MGNREGA, al­most 13 per cent less than the revised estimate of 2019-20. This is clearly inadequate. Even by the most conservative estimate, the MGNREGA budget will need to be scaled up by at least Rs 15,000-20,000 crore in 2020-21 alone. If the ac­tual labour budget is considered along with all costs, the allocation will need to expanded significantly.

In fact, critics say the approved labour budget is an underestimation of what the states demand. The gap between budget and demand is impossible to gauge be­cause MGNREGA has stopped quoting projected labour budget numbers for some years now.

“The MGNREGA budget needs to be scaled up at least three times from the Budget estimate of 2020-21, because the scheme has to be strengthened to engage labour in newer forms of employment such as soap manufacturing, mask making and so on,” said Rajendran Na­rayanan, Assistant Professor at Azim Premji University in Bangalore.

Beyond MGNREGA: Narayanan points to the need to look beyond rural employment creation as well, since many mi­grant labourers will return not to villages, but to small towns and cities with populations of less than one million.

Last year, Narayanan and colleagues Amit Basole, Mathew Idiculla, Harini Nagendra, and Seema Mundoli presented a paper on the contours of an Urban Employment Guarantee Act. They proposed providing 100 days of guaranteed work at Rs 500 a day and 150 contiguous days of training and apprenticeship at a monthly stipend of Rs 13,000 for educated youth in such urban clusters. Some 4,000 Urban Local Bodies accounting for about 50 per cent of the population (census 2011 data) could be covered under the Act.

Other suggestions focus on expanding rural infrastructure exponentially. “The government could also look at launching some big infrastructure projects purely for rural India — say, a national scheme to build hospital in villages or schools. It will not only help fix the vital infrastructure gap in villages, but also provide em­ployment opportunities and ad­d­i­tionally create demand for FMCG goods once money will start flowing in,” said Sudhir Panwar, former member of the Uttar Pradesh Planning Commission.

Kundu believes that MGNREGA needs to be strengthened as farms can absorb the surplus migrating labour only for the next three months. After that, it is vital to create employment opportunities in rural India because many people who have returned to their villages may never want to come back.

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