Demand for work under NREGS hits 8-month High

Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) inched up in February to scale an eight-month high, after a month-on-month fall in January, reflecting an uneven recovery in broader economic activities.

According to rural development ministry data, 26.3 million individuals opted for work under the scheme in February, up 1.7% from the previous month. Demand for the work came from 21.2 million households, recording a 2.4% rise over January.

In the "individuals" category, work demand was substantially driven by three states: Tamil Nadu (3.87 million in February vs 3.29 million in January), Andhra Pradesh (3.1 million vs 2.59 million) and Bihar (1.43 million vs 0.96 million). However, fewer individuals sought work in February than in January in a clutch of states as well, including Madhya Pradesh, Rajasthan, Assam, Karnataka, Maharashtra and Odisha.

Having hit a FY23 peak of 43.51 million in May 2022, work demand in the "individuals" category under the MGNREGS eased to as low as 18.64 million in October before rising again almost steadily (barring the fall in January), the data showed.

Experts said the rise in demand for MGNREGS work signals economic activities, especially in the industrial sector, are yet to witness a strong and durable recovery.

According to the government's revised estimate, spending on the MGNREGS is expected to rise to ₹89,400 crore this fiscal year from the budgeted ₹73,000 crore. The government has budgeted ₹60,000 crore for FY24, but finance minister Nirmala Sitharaman has indicated that more funds would be allocated for the scheme if required.

According to the data compiled by the Centre for Monitoring Indian Economy, the unemployment rate in the country rose to 7.45% in February from 7.14% the previous month. The urban jobless rate edged down to 7.93% from 8.55% in January, while rural unemployment rose to 7.23% from 6.48%.