Ramp up MGNREGS

Expanding the scheme will improve incomes, boost demand

Areport in the on Monday said that the Union rural development ministry has sought an unprecedented, additional ~20,000 crore to fund the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), a programme that offers at least 100 days of employment in every financial year to every rural household whose adult members volunteer to do unskilled manual work. The request for additional funds, which will need Parliament’s approval, is in addition to a record allocation of ~60,000 crore for MGNREGS in the 2019-20 Budget. The total budget for the ministry was ~1.2 lakh crore.

The additional funds are needed because 540 million persondays out of the estimated 2.5 billion persondays of work in 2019-20 would go into building houses under the Pradhan Mantri Awas Yojna. But it is also clear that there has been a spurt in demand for the scheme because of shrinking employment opportunities due to the economic slowdown and reduced household spending. An analysis of age-wise data of persons employed in the scheme done by the indicates that the share of workforce in the 18-30 age group began moving up after 2017-18. The total number of young workers (18-30 years) employed under the scheme was more than 10 million in 2013-14, which came down to 5.869 million in 2017-18. It reached 7.071 million in 2018-19. In the current financial year, till October 21, 57.2 million are working under MGNREGS . This trend is alarming because in a growing economy, MGNREGS is meant to act as a safety valve, rather than become the only source of income for such a large young cohort of the population.

But given the current realities, where the poor need money and there is a need to push up demand, the government must put in more money for the scheme. Nobel Prize winner Abhijit Banerjee has also batted for the scheme, saying that it is good use of money, and has raised incomes of the poor. He attributed the fall of poverty after 2009-10 in states such as Uttar Pradesh and Bihar to the scheme. Along with expanding the scheme, the ministry must also roll out without delay, as promised, a programme for skill building among these workers so they can move up the economic value chain, and also utilise this labour in a proactive manner for water conservation projects, another key programme of the Centre.