Centre allows industry, road work and MGNREGA to start in rural India

To kick-start the rural economy the Central government granted a series of relaxations in the second phase of the nationwide lockdown, but experts warned that proper implementation was necessary to ensure the measures didn’t remain just on paper.

In case of Mahatma Gandhi Employment Guarantee Act (MGNREGA) — one of the biggest sources of employment for rural landless labour, providing work to an average of 50-60 million households every year — the Centre has allowed all manner of works, but has accorded priority to water conservation and irrigation activities. This assumes significance in view of the forthcoming monsoon.

That apart, it has also allowed dovetailing of existing central and state government schemes on irrigation and water conservation with MGNREGA to create more employment opportunities in rural areas, which have seen a massive influx of migrants from urban India in the past few weeks.

According to estimates, around 500,000-600,000 migrants returned to rural areas after the nationwide lockdown was imposed.
That apart, the Ministry of Home Affairs’ guidelines have also allowed industrial activity in rural areas, classified as those falling outside municipal limits, along with construction activities and restarting brick kilns. Construction of rural roads, buildings and other activities have also been permitted under the guidelines, which have extended relief measures to MSMEs.

However, experts said much would depend on how states respond because in case of schemes like MGNREGA, it is the states that have to take the initiative. Also, when worksites are closed and people are scared to move out of homes, it remains to be seen how many actually turn up for work.

“Those who turn up will be really desperate for work because in normal conditions no one will prefer to venture out,” said Reetika Khera, economist and faculty member at Indian Institute of Management (IIM)-Ahmedabad.

She said in many cases even if the worksite was opened, labourers don’t get paid for months, defeating the purpose of the exercise.

“Also, it has to been seen how many of the households actually get 100 days of work in a year because the average employment is far less at around 48-49 days of work,” Khera said.

She said to get the promised Rs 2,000 per month, in accordance with the revised daily wages under MGNREGA for 2020-21 of Rs 209.27, a labourer would need to work for a minimum of 10 days in a month.

However, so far in FY21, the average days of employment for a household has been just 7.7 days.

In FY21, the approved labour budget for the scheme was 280.76 crore persondays, which was 1.44 per cent higher than FY20, but experts said this was a watered down version of what was demanded by states. So far in April, just around 1.8 million persondays of work had been generated.

For FY21, the central government had allocated Rs 60,000 crore for MGNREGA, which was about 13 per cent lesser than the revised estimate of FY20.

It also remains to be seen how states start rural road construction work following the easing of norms. The central government has allocated Rs 19,000 crore for the rural roads programme in FY21.

“All these relaxations are good and should help in pushing up the rural non-farm economy but it remains to be seen how much actually gets implemented,” said Mahendra Dev, director of Indira Gandhi Institute of Development Research.

He said availability of labour has been one of the major complaints of the rural sector and the current set of relaxation are aimed to a large extent to address particularly, the dovetailing of MGNREGA labour for central and state government irrigation and water conservation schemes.

The non-farm sector in rural India contributed bulk of the income in agriculture household as per the NABARD financial inclusion survey of 2016-17.

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