Rural job market improving in FY25 but lags behind pre-pandemic levels

The work completed by July in the 2024-25 fiscal year is 230 million person-days fewer than in the same period last year under MGNREGS, signalling some improvement in traditional centres of employment

In the first four months of the current fiscal year, the employment generated under the flagship rural job scheme, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), remains 130 million person-days higher than during the same period in 2019-20, the year prior to the pandemic, signalling a rural distress, The Times of India reported. 

This indicated that the employment situation has yet to return to pre-pandemic norms. However, work completed by July in the 2024-25 fiscal year is 230 million person-days fewer than in the same period last year, signalling some improvement, the report said citing data from the Union Rural Development Ministry.

Fiscal 2019-20 is regarded as a standard year for MGNREGS as employment patterns followed predictable trends prior to the pandemic, which disrupted the economy and led to a national lockdown. The pandemic triggered an unprecedented surge in job demand under the program.

Peak and subsequent decline in person-days post-pandemic
 

The work generated under MGNREGS skyrocketed to over 3.89 billion person-days in 2020-21, a record high. The following years saw a gradual decline, with 3.63 billion person-days in 2021-22 and around 2.94 billion in 2022-23. This decline was anticipated as the economy reopened and workers returned to traditional employment sectors.

Between April and July 2024-25, 1.28 billion person-days were generated under the scheme, compared to 150.2 crore during the same period in 2023-24. In contrast, 1.15 billion person-days were recorded during the same months in 2019-20, TOI said.

Notably, the 1.5 billion person-days generated from April to July last year were unexpectedly high, despite the lockdown being lifted over two years earlier. The total person-days for 2023-24 saw an upward trend, reaching 3.08 billion, the report noted.

Budget cuts and potential impact on work demand

The budget for 2024-25 is over Rs 19,000 crore less than the expenditure incurred in 2023-24. While this reduction may be sufficient to meet the current demand if trends persist, civil society experts caution that the introduction of national mobile monitoring software for attendance and the Aadhaar-based payment system have negatively impacted workers, potentially reducing demand for work under the scheme.