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Tackling rural economic distress


  • Several States are under lockdown due the second wave of the Covid-19 pandemic and this will have severe implications for the livelihoods of those in the informal sector.
  • There is adequate evidence that migrant workers and the rural poor have been facing great distress over the past one year and the crisis for food and work is only going to intensify further.


GS-II: Social Justice (Health and Poverty related issues, Government Interventions and Policies, Issues arising out of the design and implementation of Government Policies)

Mains Questions:

What are some of the government initiatives that are aimed at helping the workers of the informal sector during times such as the Covid-19 pandemic? Is there an urgent need to strengthen the public distribution system and the MGNREGS? (10 marks)

Dimensions of the Article:

  1. Understanding the situation of Hunger and distress
  2. Food Security through Public Distribution System
  3. National Food Security Act, 2013
  4. PM Garib Kalyan Ann Yojana – March, 2020
  5. One Nation One Ration Card
  6. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
  7. Inadequate provisions of MGNREGA

Understanding the situation of Hunger and distress

  • Recently, a report called the ‘Hunger Watch’ report was published, which compared the pre-lockdown situation in 2020 to the situation in October 2020 to assess the impact of the nationwide lockdown.
  • In October 2020, 27% of the respondents said that they had no income; 40% respondents said that the nutritional quality of food had become “much worse”; and 46% of the respondents said they had to skip one meal at least once in the day in October 2020.
  • The migrants have again become vulnerable due to the lockdown in different cities.
  • While many have once again headed to their villages, a large population has got stranded in different parts of the country without work.
  • In this context, there is an urgent need to strengthen the public distribution system (PDS) and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
  • According to an independent study, about 100 million people are excluded from the ration distribution system owing to a dated database based on the 2011 Census.

Food Security through Public Distribution System

  • In June, 1997, the Government of India launched the Targeted Public Distribution System (TPDS) with focus on the poor.
  • Under the PDS, States were required to formulate and implement foolproof arrangements for identification of the poor for delivery of food grains and for its distribution in a transparent and accountable manner at the FPS level.
  • Accordingly, the government legislated the National Food Security Act, 2013 to provide for food and nutritional security in human life cycle approach, by ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity.

National Food Security Act, 2013

  • Every person belonging to priority households shall be entitled to receive 5 kilograms of foodgrains per person per month at subsidised prices specified in Schedule I from the State Government under the Targeted Public Distribution System.
  • Provided that the households covered under Antyodaya Anna Yojana shall, to such extent as may be specified by the Central Government for each State in the said scheme, be entitled to 35 kilograms of foodgrains per household per month at the prices specified in Schedule I.
  • The Eligible households means households covered under the Priority Households and the Antyodaya Anna Yojana.    

PM Garib Kalyan Ann Yojana – March, 2020

  • Present Status: Presently, the Government is implementing National Food Security Act, 2013 in order to ensure food security to 75 per cent of the rural population and up to 50 per cent of the urban population, thus covering two-third of India’s population.
  • The eligible people are entitled to receive 5 kgs of food grains at the rate of Rs 1/2/3 per kg for nutri-cereals/wheat/rice respectively.
  • Eligible persons would receive additional 5 kgs of wheat or rice free of cost for next 3 months.
  • To ensure adequate availability of protein to all the eligible beneficiaries, 1 kg of pulses per family would be provided free of cost for next three months.
  • Set to benefit around 8o crore individuals.
  • Food Security under Atma Nirbhar Bharat –May, 2020 
  • Under Atma Nirbhar Bharat package, Government of India has decided that 8 LMT food grains will be provided to about 8 Crore migrant labourers, stranded and needy families, who are not covered under NFSA or State scheme PDS cards.
  • 5 Kg of food grain per person has been distributed free of cost for the months of May and June to all migrants.    

One Nation One Ration Card

  • One Nation One Ration Card System is an important citizen centric reform. Its implementation ensures availability of ration to beneficiaries under National Food Security Act (NFSA) and other welfare schemes, especially the migrant workers and their families, at any Fair Price Shop (FPS) across the country.
  • The reform especially empowers the migratory population mostly labourers, daily wagers, urban poor like rag pickers, street dwellers, temporary workers in organised and unorganised sectors, domestic workers etc, who frequently change their place of dwelling to be self-reliant in food security. This technology driven reform enables the migrant beneficiaries to get their entitled quota of food grains from any electronic point of sale (e-PoS) enabled fair Price Shops of their choice anywhere in the country.
  • Seventeen States have successfully operationalised “One Nation One Ration Card system” with Uttarakhand being the latest State to complete the reform.
  • States completing One Nation One Ration Card system reform are eligible for additional borrowing of 0.25 percent of Gross State Domestic Product (GSDP).
  • Accordingly, these States have been granted additional borrowing permission of Rs. 37,600 crore by the Department of Expenditure, Ministry of Finance. 
  • Additional borrowing limit of 0.25 percent of the Gross State Domestic Product (GSDP) is allowed to the States only on completion of both of the following actions:
    • Aadhar Seeding of all the ration cards and beneficiaries in the State
    • Automation of all the FPSs in the State.

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

  1. It gives a significant amount of control to the Gram Panchayats for managing public works, strengthening Panchayati Raj Institutions.
  2. Gram Sabhas are free to accept or reject recommendations from Intermediate and District Panchayats.
  3. It incorporates accountability in its operational guidelines and ensures compliance and transparency at all levels.

Objectives of MGNREGA

  1. Provide 100 days of guaranteed wage employment to rural unskilled labour
  2. Increase economic security
  3. Decrease migration of labour from rural to urban areas

Inadequate provisions of MGNREGA

  • The Centre had allocated Rs. 73,000 crore for 2021-22 for MGNREGS and notified an annual increment of about 4% in wages. Both these provisions are inadequate to match the requirements on the ground.
  • The central allocation for MGNREGS is about Rs. 38,500 crore less than 2020’s revised estimate.
  • Of the 7.5+ crore households which worked in MGNREGS in 2020-21, even if 1 crore households opt out of the scheme in 2021, the Centre should still budget for 75-80 days of employment in the year for 6.5 crore families given the current scale of economic distress.
  • By this rationale, at the current rate of Rs. 268/day/person, at least Rs. 1.3 lakh crore will have to be budgeted.
  • The government should also re-consider its decision of a mere 4% increase in MGNREGS wages and hike it by at least 10%.
  • This will mean another Rs. 10,000 crore. Therefore, at least Rs. 1.4 lakh crore will be required to ensure uninterrupted implementation during the year.

-Source: The Hindu

July 2024