‘NREGS may dent demographic dividend’

Centre’s flagship job guarantee scheme has come in for fresh flak from a study.

Written by Anil Sasi | New Delhi | Published: July 17, 2012 12:57 am

Though Prime Minister Manmohan Singh has thrown his weight behind MGNREGS,calling it a “silver bullet” for rural revival,the Centre’s flagship job guarantee scheme has come in for fresh flak from an internal research study.

The study,carried out by an assistant director in the office of the economic advisor at the Department of Industrial Policy and Promotion (DIPP),says that the Mahatma Gandhi National Rural Employment Guarantee Scheme is likely to “dampen the initiatives of rural workers to acquire skills and consequently reduce their skill levels and their likelihood to move in(to) skilled jobs”.

Envisaged as an intervention and not an open-ended scheme to operate in perpetuity,the way the scheme is currently structured could end up denting India’s demographic dividend,says the study,titled ‘Trade-off of workers between MGNREGS and Manufacturing’,by Jitender Singh,Assistant Director (Research Studies),in DIPP that falls under the Commerce and Industry Ministry.

While acknowleding the MGNREGS’s contribution towards addition of jobs,the DIPP study notes that economic growth is expected to create enough employment opportunities and that the preference for MGNREGS should be reduced. This was needed to achieve the objectives of the ‘Manufacturing Plan’,that envisaged 50-60 million low or semi-skilled people moving to manufacturing,notes the study.

The skill deficiency that exists in rural workers was also the prime cause for structural unemployment,in turn pushing them towards the safe unskilled works jobs under MGNREGS,the study adds,recommending that the resources be used instead to enhance the skills of workers.

* 11.287 billion man-days,$30 billion of employment under MNREGS so far

* Extra income in rural households impacting wages,price levels

* Study says scheme also dampening initiative to acquire skills

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