Context:
According to the Ministry of Rural Development, work demand under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) fell sharply in July 2024.
Relevance:
GS III: Indian Economy
Dimensions of the Article:
- Implications of Reduced Demand for MGNREGS Work
- Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
Implications of Reduced Demand for MGNREGS Work
- Overview of Trends: In July 2024, about 22.80 million individuals registered for work under MGNREGS, marking a 21.6% decrease from July 2023. This group represented 18.90 million households, showing a 19.5% annual reduction and a 28.4% drop from the previous month, June 2024.
- Geographical Variation: Notably, states like Tamil Nadu, Andhra Pradesh, Karnataka, and Telangana observed lower work demand submissions in July 2024.
- Economic Growth Influence: A decline in MGNREGS work demand typically indicates improved employment opportunities elsewhere, correlating with robust economic performance. FY 2023-24 recorded a higher-than-expected economic growth of 8.2%.
- Global Economic Position: The IMF forecasts India to be the fastest-growing significant economy with projected growth rates of 7% for FY 2024-25 and 6.5% for 2025-26, surpassing global averages.
- Agricultural Factors: The monsoon season generally prompts a mass migration of rural workers back to agricultural activities, thus decreasing reliance on MGNREGS during good rainfall periods. In July 2024, abundant rains compensated for a prior 11% rainfall deficit experienced in June, further reducing the demand for MGNREGS-driven employment.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
- Mahatma Gandhi National Rural Employment Guarantee Act, MGNREGA, is an Indian labour law and social security measure that aims to guarantee the ‘right to work’. This act was passed in September 2005.
- It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
- It covers all districts of India except the ones with 100% urban population.
- MGNREGA is to be implemented mainly by gram panchayats (GPs). The involvement of contractors is banned.
- Apart from providing economic security and creating rural assets, NREGA can help in protecting the environment, empowering rural women, reducing rural-urban migration and fostering social equity, among others.
How MGNREGA came to be?
- In 1991, the P.V Narashima Rao government proposed a pilot scheme for generating employment in rural areas with the following goals:
- Employment Generation for agricultural labour during the lean season.
- Infrastructure Development
- Enhanced Food Security
- This scheme was called the Employment Assurance Scheme which later evolved into the MGNREGA after the merger with the Food for Work Programme in the early 2000s.
Features of MGNREGA
- It gives a significant amount of control to the Gram Panchayats for managing public works, strengthening Panchayati Raj Institutions.
- Gram Sabhas are free to accept or reject recommendations from Intermediate and District Panchayats.
- It incorporates accountability in its operational guidelines and ensures compliance and transparency at all levels.
Objectives of MGNREGA
- Provide 100 days of guaranteed wage employment to rural unskilled labour
- Increase economic security
- Decrease migration of labour from rural to urban areas.
-Source: Economic Times
