Economy
The dichotomies that define India’s rural jobs promise
Summary
Spending on MGNREGS is likely to have overshot the budget by a massive 43% in 2023-24. The conservative budgeting by the Centre year after year has the potential to delay wage payments—and break several promises along the way.The ruling party’s poll pitch has relied on several planks, one of them being welfare. A new Plain Facts series, starting today, will assess the government’s progress on four key welfare schemes using granular data on beneficiaries put out by the relevant ministries. Part 1 looks at the world’s largest jobs programme, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
Year after year, the scheme has faced cuts in its initial budgeting, but the final expenditure routinely goes astray. The gap became even more accentuated in 2023-24, the year just before India went to polls. A Congress-era scheme once derided by Prime Minister Narendra Modi, the MGNREGS’ budget is likely to have overshot its initial outlay by 43% last fiscal, the widest such gap in at least eight years, barring the pandemic-hit 2020-21.
A frugal budget estimate signifies hope that the jobs market will stay afloat; an elevated final bill shows that distress found its way. Since its launch in 2006, the MGNREGS has come to be a proxy for rural distress: When more Indians seek work under this last-resort scheme, as they did in 2020-21, it could mean access to fewer jobs otherwise. About 84% of states were still reporting more work being done under MGNREGS in 2023-24 as compared to the last pre-covid year, a Mint analysis showed.
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The low budgeting despite elevated demand has often drawn criticism, with the parliamentary committee on rural development noting earlier this year that the fund cuts tend to cascade into delays in wage payments, despite the scheme being demand-driven.
Towards normalcy
During the pandemic years, demand for jobs under the MGNREGS surged across almost all states. A total of 133 million individuals sought work in 2020-21, highlighting the acute need among returning migrant workers for such jobs. Three years later, the number was down to 93 million in 2023-24, same as in 2019-20, but the drop has not been uniform across the country.
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A state-wise analysis showed that demand for work was still up by 30% in a large state economy like Maharashtra in 2023-24 as compared to 2020-21, and was down by less than 10% in Karnataka and Andhra Pradesh, indicating sustained stress in some pockets. Demand remained higher than the pandemic year in several northeastern states.
Out of the 32 states and Union territories for which data could be analysed, 25 saw a decrease in the number of persons who demanded work under MGNREGS between 2020-21 and 2023-24. However, how much work do they end up getting offered is a critical question.
Unmet demand
Here, the dichotomy between employment “demanded" and employment “availed" comes into the picture. Almost 10.5% of the demand for work was unmet in 2023-24, the least such share during the government’s second term. That’s another metric that shows an uptick in work under the scheme in the pre-election year. The share of unmet demand was 16% in 2020-21 and 15.6% a year before that.
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The change varied across states. Only a handful of states showed sharp declines in this demand–supply gap over the past five years, while others remained largely unchanged.
Among major MGNREGS beneficiary states, Maharashtra and Uttar Pradesh saw a significant decline in unmet demand during this period, while Tamil Nadu managed to maintain a relatively lower gap that stands below 5%.
However, once work is provided in response to the demand made by a household, it’s the quality of employment given, as measured by the number of days of employment, that matters as well.
Broken promise
The MGNREGS promises at least 100 days of work each year to a registered household. Yet, households that are provided work get it for only around 50 days in a year on average. During the pandemic, when the number of households seeking work through the scheme increased by nearly 40%, the average number of days worked per household increased only marginally, from 48.4 days in 2019-20 to 51.5 in 2020-21.
As lockdowns eased, demand declined, but even in 2023-24, an average of just 52.1 days of work was provided per household. In the intervening years, this figure even slipped below 50. It’s here that the parliamentary panel’s observation about the cascading impact of frugal budgets comes into play. Experts argue that inordinate delays in wage payments, beyond the legal mandate of being paid within 15 days of the closure of muster rolls, could be disincentivizing the participation of rural workers in this scheme.
This is the first of a four-part data journalism series on the progress of key welfare schemes. Read about the Jal Jeevan Mission here (Part 2), the rural roads scheme here (Part 3), and the rural housing scheme here (Part 4). Also read our pre-election report card in the seven-part Election Pitch series here.
