The average daily demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) has recorded an over 60% increase in December as compared to the preceding few months. Officials monitoring MGNREGA works on-site attribute the sudden spike in demand to job losses suffered by migrant labourers owing to the cash squeeze following demonetisation.
Records from the Ministry of Rural Development, accessed by The Indian Express, show that between July and November 2016, the average labourer turnout per day under MGNREGA was 30 lakh. In December, the average numbers went up to 50 lakh per day. And on January 7, 2017, the labour turnout for the day was as high as 83.60 lakh — approaching three times the daily pre-demonetisation average of 30 lakh.
The reverse migration triggered by mounting job losses for informal workers employed in the Micro, Small and Medium Enterprises (MSME) has translated in to an increased demand for work provided in rural India under the employment guarantee scheme. According to officials, December — by when much of the rabi sowing is over — usually registers a slight increase in demand, but never to the extent that was witnessed last month. “MSMEs and other sectors did get hit due to demonetisation. In such cases, the labourers go back to their villages and seek work under MGNREGA which is one of the main reasons for the increase,” said an official.
Data show that on November 7, the day before Prime Minister Narendra Modi’s announcement, 38.52 lakh labourers sought work under MGNREGA. The number fell slightly to 35.60 on December 2, but thereafter rose through the month and in January, reaching 78.90 lakh on Thursday and 83.60 lakh on Saturday.
The last time MGNREGA numbers were higher was between April and June when the onset of the monsoon was delayed, and drought-like conditions were prevalent over many parts of India. The figures had then touched 1 crore per day. Increased demand for work under MGNREGA — which guarantees 100 days of wage employment (150 days in case of an officially-declared drought in the state) — is usually a sign of rural distress.
“Demand for MGNREGA work continued to be high throughout 2015, even post-July, due to the poor monsoon that year. This year, the monsoon was normal and there were more agricultural jobs, which ensured daily labour figures since July fell to 30 lakh on average. Demand has been on the rise again in December. We expect it to go up to a crore soon,” said an official.
While the MGNREGA labour turnout remained unusually high throughout 2015, when drought was declared in 12 states, the average daily turnouts in November and December 2014 were 25 lakh and 31 lakh respectively.
Social activist Nikhil Dey of the Rajasthan-based Mazdoor Kisan Shakti Sangathan said that post-demonetisation, demand for work under MGNREGA could have been even greater had the government made that much of work available. “We recently had a public hearing in Beawar in Ajmer where it emerged that half of the 600 factories had shut, and the rest were running at half their capacity. In such a scenario, those coming from rural areas looking for jobs have no option but to go back to their villages and seek jobs under MGNREGA,” Dey said.
While no official figures have been released on the impact of demonetisation on MSMEs, according to D L Sachdeva, national secretary of the All India Trade Union Congress, it is estimated that over 40% of workers were rendered jobless in the immediate aftermath of the move. “This has led to a major reverse migration. The job loss in these small and medium enterprises could be temporary, but the situation has not normalised yet,” Sachdeva said.
More than 85% of the Rs 47,500 crore outlay for MGNREGA this year has already been spent. Given the increased spending before the monsoon and since December, the Rural Development Ministry is expected to write to the Finance Ministry, asking for an additional Rs 8,000 crore so that the scheme could run smoothly until the end of the current fiscal.