Steep fall in rural job days in July

Person days under MGNREGA drops 57%

Employment generated under the MGNREGA has dropped 57 per cent in July against the previous month. The rural employment guarantee scheme has been seeing month-onmonth increase in persondays since April after the lockdown hit urban centres.

The initial data published by the government shows that the number of person-days has dropped from 64 crore in June to 27.3 crore in July, which is a massive drop of 57 per cent. Even the employment provided to households has come down by 41 per cent from 3.89 crore in June to 2.29 crore in July.

Both person-days and household employment have been growing since April. In the lockdown month of May, persondays stood at 56.8 crore, which was higher than the initial data for July.

Work demand too dropped 31 per cent in July-from 6.2 crore in June to 4.26 crore in July. Work demand among households too dropped by 27.7 per cent.

According to Kruti Shah, economist, Emkay Global Financial Services, the sowing under kharif crop happened faster this year and the lower levels of farm activity in July would have reflected in the MGNREGA employment data. "The CMIE data also shows that the farm jobs have come down by 4 million in July compared to June. During the lockdown months, farm jobs had bucked the overall employment trend. Seasonally farm jobs are lesser in July compared to June," Shah said.

Compared to July 2019, person-days generated last month are still higher as a better monsoon improved the kharif acreage and sowing activity this time. Further, availability of labour also was higher this time due to the reverse migration of the labourers from urban centres.

Chances of these labourers having gone back to urban centres are very less in July as has been evident from the lower manufacturing PMI data. Manufacturing PMI, which was rebounding after hitting a historic low in April, dipped in July. "In July many of the industrial centres were still under lockdown. More relaxed restrictions in August can see better industrial activity. By September, we could see re-migration of the labourers happening as the wages as well as job demand are better in urban centres compared to rural areas," said Shah.