Demand for work under MGNREGA rebounds marginally in September

Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) rebounded marginally in September, after falling for three consecutive months, raising questions about labour market stability.

Government data showed that demand for household and individual segments under the scheme was up more than 5% in September compared to August, though it was lower than a year ago.

Experts said demand may go up with a dip in farm jobs.


"Anticipating a dip in demand for agriculture jobs in the foreseeable future, there will be more demand for work under MGNREGA," said labour economist KR Shyam Sundar.

A senior government official, however, said the flagship rural jobs scheme numbers were not a true reflection of the labour market in rural India.

"There are seasonal variations in work demand under the scheme. Though the numbers are still higher, we expect them to stabilise closer to pre-Covid levels in a year's time if everything else remains the same," said the official, who did not wish to be identified.

Sundar said there are bound to be fluctuations in demand under the scheme and unless the product market regains good health the labour market will not recover. "We need solid plateauing of demand for job cards in order to say that the labour market is on the path of recovery," he said.

According to Sundar, it requires at least two quarters of sustainable dip in demand for work under MGNREGA to conclude that India's labour market has stabilised.

The September demand was higher than the pre-Covid levels and reflected greater dependence for livelihood on the rural employment scheme.

As per the data, household demand for work under the scheme in September was 16.7 million, 5% more than the August demand of 15.9 million, while the individual demand last month was 5.7% more at 20.2 million compared to 19.1 million in August.

Household demand for work under MGNREGA was 14.2 million in 2019-20 while individual demand was 17.7 million, which was 17.6% and 14.1% lower respectively than the current levels.

Year-on-year the demand for work under the scheme has seen a significant dip with household demand last year at 24 million and individual demand at 30.2 million, 30.4% and 33.1% higher respectively than this year.

Household demand under MGNREGA stood at 23.2 million in April, 30.7 million in May, 31.7 million in June and 20.4 million in July.