Work under rural jobs scheme at 16-month low in August

Work generated under Mgnrega fell to its lowest in the last 16 months in August to 158.5 million persondays. This is 58% lower than July 2021 when it stood at 380 million. Number of households benefiting from the scheme also came down by 43% to 15.2 million compared to 24.5 million in July.

The fall in work generation in August is in line with fall in demand for work under the scheme, indicating an uptick in economic activity prompting workers to move from rural to urban areas for work.

Data from the rural development ministry showed demand for work under the scheme fell to its lowest in the last 16 months to 23.4 million households as against 31.9 million in July, registering a dip of 23.1%. Demand from individuals dropped by 26.04% to 31.5 million against 4.26 crore in July “Dip in demand and subsequent work generation under Mgnrega is coinciding with consistent pick-up in economic activity. This has been aided by a dip in covid cases, which enabled mobility of workers from rural to urban centres,” DK Joshi, chief economist, Crisil, said.

According to Joshi, August is a busy month for agriculture and there is a possibility of several of these, otherwise dependent Mgnrega workers, moving to farm jobs.

So far, Rs 56239.39 crore have been spent on the scheme till August 31, 2021, which is 77.04% of the annual allocation of Rs 73,000 crore for 2021-22. Both demand as well as work generated under Mgnrega has risen in the first quarter and peaked for the fiscal year so far in June, after which it started falling and registered a sharp dip in August.

However, the dip in work generation under Mgnrega does not sync with the unemployment rate in the country, which has seen a rise in August compared to July. As per the data from the Centre for Monitoring Indian Economy (CMIE), the 30-day moving average unemployment in India stood at 8.1%.