The NREGA signalhttps://indianexpress.com/article/opinion/editorials/the-nrega-signal-6082732/

The NREGA signal

Data that suggests young workers are increasingly turning to the scheme is a sign that must worry policymakers

NREGA, job scheme, unemployment, india jobs, economy slowdown, MGNREGA employment, jobs crisis in MGNREGA, youth govt employment, latest news, indian express
The number of young workers employed under the demand driven social security scheme rose to 70.71 lakh in 2018-19 — up from 58.69 lakh in FY18 and seems to be on an upward trajectory this year too

After the contraction of factory output by 1.1 per cent in August compared to the past year, the sharp decline in commercial credit in the year till September and other such gloomy indicators, come fresh signs of the deepening slowdown.

As this paper has reported, the proportion of young workers, those in the age group of 18-30, in the Mahatma Gandhi National Rural Employment Guarantee Act or MGNREGA scheme, has begun to rise, especially after 2017-18, when the economy was hit first by demonetisation and later by the implementation of the GST.

The number of young workers employed under the demand driven social security scheme rose to 70.71 lakh in 2018-19 — up from 58.69 lakh in FY18 and seems to be on an upward trajectory this year too with 57.57 lakh having been employed upto October 21 this year.

This is disturbing considering that MGNREGA is a scheme targeted at the hinterland, aiming to provide 100 days of work to each rural household. It is clearly a reflection of the little or limited opportunities for the young in rural India to venture out to bigger towns or cities given the slump in construction, real estate and manufacturing and the informal sector besides services, especially the hospitality business.

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The warning signs were evident much earlier, including in the last fiscal, when the demand for work under the MGNREGA, described once by PM Modi as the living monument of the UPA’s failure, rose almost 10 per cent compared to the previous year, given mounting rural distress and low farm support prices.

The government, however, pegged the allocation for this scheme for FY20 at Rs 60,000 crore, a marginal decline compared to the revised estimates for the last fiscal with a minister saying that the government did not want MGNREGA to be a programme in perpetuity.

Economists have come under fire after the global financial crisis in 2008 for their failure to predict the downturns. Yet, it would be foolish to dismiss them downright when they diagnose problems and offer possible solutions to surmount the challenges of an economy facing major headwinds.

Nobel laureate Abhijit Banerjee had recently pointed to what he reckoned is a worrying factor — average consumption expenditure at 2018 prices had fallen from Rs 1,587 per person each month in 2014 to Rs 1,524 in 2017-18 in rural areas, according to NSSO data. Banerjee has suggested raising wages under MGNREGA and farm support prices.

Hopefully, the government and policymakers will be alive to some of these suggestions and other measures needed to revive the economy.