Demand for work under the rural employment guarantee scheme falls sharply in July

Demand for work under the rural employment guarantee scheme, the Mahatma Gandhi National Rural Employment Guarantee, has fallen sharply in July by over 31% after rising for four consecutive months since April and touching a peak of 6.2 crore in June while employment provided under the scheme fell by more than half. This indicates a pick up in industrial activities as well as farm activities resulting in movement of workers back to towns and fields while bringing relief to rural India as pressure on the scheme will be reduced.
Government data shows 4.25 crore persons demanded work under the scheme in July compared to 6.20 crore in June, a dip of 31.3%. Demand for work stood at 5.21 crore persons in May. Even the employment provided under the scheme last month fell by a whopping 59.3% to 26.04 crore person-days compared to 63.61 crore person days in June and 56.83 crore person days in May.

“With unlocking in urban centres gradually picking up and industries assuming near normal production, workers are returning back to towns to join back work,” labour economist KR Shyan Sunder said, adding that demand under Mgnrega is inversely related to urban labour market.

The unemployment data by the Centre for Monitoring Indian economy shows 122 million people had lost jobs in April, the first month of the lockdown. However, 91 million of these recovered by the end of June with 21 million joining back work in May and another 70 million coming back to the labour market in June.

Professor Himanshu of JNU, however, said low demand for work can also be attributed to people moving to agriculture for the sowing season in July until mid of August. “Besides, there are massive rains and floods in parts of India during the month of July because of which no work can be done,” he added.

Government has topped up the budgetary allocation of Rs 61,500 crore to the scheme by another Rs 40,000 crore to provide livelihood opportunities to millions of migrant workers in rural India after the outbreak of pandemic.

A nationwide lockdown was imposed on March 25, prompting migrant workers to go back to their hometown and seek work under Mgnrega. While very little movement was allowed in April, demand picked up in May and June when the government facilitated mass movement of these workers to their home states through special trains and buses.