News Analysis

MGNREGA support: Work generated in coming days is the key

Radhika Merwin, BL Research Bureau | Updated on May 14, 2020

The existing shortfall of person days so far will. There is no word on how the wage earners will be compensated for this

Migrant labourers who have been the worst hit in the lockdown, have been offered support under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA). The Centre has stated that 40-50 per cent more persons have been enrolled in May than last year.

But with no mention of how the Centre intends to compensate for the loss of work over the past two months amid the lockdown, and with the monsoon fast approaching, it appears that the Centre has failed to address the crux of the problem. After all how the workers are compensated for the loss of work and how much work is generated in the coming months will be more critical.

Consider this. According to the MGNREGA website, as of May 14, total of 13.6 crore of person days have been generated so far this fiscal (according to the Centre’s announcement it stands at 14.6 crore). This is grossly lower than what was initially projected for the month of April and May. In this fiscal, a total of 61 crore person days were projected up to May, which implies that there is already a shortfall of 47 crore persons days so far this year.

How the daily wage earners under MGNREGA are compensated for this loss of work finds no mention in Thursday’s announcement.

Then there is the problem of generating employment in the months ahead. Remember in FY20 there was a 2 per cent decline in employment generated, as against FY19 (in terms of person days). For FY21, the government had projected 280 crore of person days of work (up 6 per cent from FY20). Given the disruption over the past two months, achieving the projected number of person days appears a tall task. With lockdown getting lifted in phases across States and monsoon approaching, a sharp pick-up in person days is unlikely.

As such over the past five years, average days of employment provided per household has been 45-50 days — far below the promised 100 days of work under the scheme.

The gross shortfall in person days generated this year would also imply that the Centre’s earlier announcement of ₹20 per day increase in average wage under MGNREGA (to ₹202 from ₹182 per day) would not be achievable.

This is because the average wage figure is a function of individual States’ notified wage rate and the number of person days of work (employment provided). While the notified wage rate for some States is way above the ₹202 mark, sharp fall in work generated would imply a far lower average wage rate for the full year.

Published on May 14, 2020

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