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MGNREGS: Rural Jobs Programme Remains Underfunded Despite High Demand

Since 2019, the budget allocation for the Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS) that has 129 million active workers has been consistently lower than or at most same as the previous year’s revised estimates

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MGNREGS: Rural Jobs Programme Remains Underfunded Despite High Demand | Photo courtesy: Sabir Mallick

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The Covid-19 pandemic has had the most impact on jobs and livelihoods in the last five years. Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS), the rural jobs programme which guarantees 100 days of work per household, had become a lifeline for millions of rural workers. A majority of the participants in MGNREGS’s demand-driven work are women. As millions of workers returned to the safety of their homes following the lockdown, the number of people demanding work under MGNREGS swelled to a record 133 million in 2020-21.

While economic growth has stabilised since the peak of the pandemic, India’s employment is largely dominated by poor-quality employment in the informal sector and informal employment, said India Employment Report 2024 by the Institute for Human Development and International Labour Organization. During the past decade, there was only a small increase in the real wages of casual workers and a decline in the real earnings of regular salaried workers and self-employed persons, the report found. The Economic Survey of India 2022-23 has said that “growth in real rural wages has been negative due to elevated inflation”.

The Bharatiya Janata Party’s manifesto for the 2024 general election does not mention the Mahatma Gandhi Rural Employment Guarantee Scheme or a specific national minimum wage, but it promises to ensure a review of National Floor Wages from time to time. Meanwhile, the Indian National Congress manifesto stated that the wage under MGNREGS would be increased to 400 per day.

As India elects its 18th Lok Sabha in a seven-phase election lasting more than 40 days, one of the top concerns among voters is unemployment and the availability of jobs. According to the 2024 Lokniti-CSDS pre-poll survey, unemployment was the biggest concern (27%) followed by price rise (23%). More than three in five people felt that getting jobs had become more difficult than it was five years ago. Rural wages have declined, household demand for rural jobs remains higher than five years ago, and the funds allocated remain inadequate to support timely wages, clear arrears, and pay delay compensations, said experts.

‘Puzzling’, ‘Perplexing’ Reduction in Funds

Demand for work under the rural jobs programme--variously referred to as MGNREGA (the ‘A’ standing for the Act passed to codify the programme), MNREGA and NREGA--has fallen compared to the peak of Covid-19, to 93 million people in 2023. But it was 15% more than the average demand between 2014-15 and 2018-19.

Since 2019, the household demand for work has been higher each year compared to any of the years between 2014-15 and 2018-19. The peak Covid-19 years of 2020 and 2021 are exceptional where 83 million households demanded work, on average, compared to 52 million households, on average, demanding work between 2014-15 and 2018.

Despite the high demand, between 2019-20 and 2023-24, the budget allocations each year have been consistently lower than the previous year’s revised estimates. In 2022-23 and 2023-24, the allocated budget was one-fourth and one-third, respectively, of the previous year's revis

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