Statsguru: Monsoon migration lowers MGNREGS work demand in August

Monsoon migration of India’s unskilled labour to agriculture led to a decline in work demand under the rural employment guarantee scheme this August for a 10th consecutive month.
 

About 18.9 million individuals applied for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in August, a 17 per cent dip compared to the same month in 2023. The demand declined by 22.5 per cent in June and by 21.6 per cent in July.
 

Overall demand for work under the scheme has dipped since the pandemic, when over 133 million people sought work. In FY24, the demand had declined to 93.2 million individuals. However, the actual number of people who availed of work in FY24 still remained higher than the pre-Covid figures. In FY25 so far, 67 million people have sought work and 57 million have availed of it under MGNREGS (chart 1).

Moreover, the number of registered job cards has declined. Deletion of job cards has picked up pace and exceeded the number of new cards issued each year since FY23, when a record number of deletions took place. Job cards are deleted if they are found to be fake, incorrect or duplicate, the person has died, or is unwilling to work, among other reasons. Over 8 million job cards have been deleted till September this year (chart 2).

 

Despite a dip in demand, average wages under the scheme have increased by almost a third in five years (chart 3).

 

Workers under the scheme generated over 3 billion person days of work in FY24 compared to 2.5 billion person days in FY20. However, the share of scheduled categories in the work generated is declining. But on the basis of gender, women account for over 50 per cent of this work (chart 4).

 

The scheme is seen by many as a fallback option during rural job distress. However, the latest Economic Survey sought to delink this argument by suggesting a lack of correlation between economically poor states and employment generated under the scheme. And since it is demand driven, the actual expenditure under the sch­e­me has outpaced the Budget allocations every year since FY20 (chart 5).

 

In fact, six states cornered over half of the funds released by the Centre for the scheme between FY20 and FY24. Uttar Pradesh and Tamil Nadu got the largest chunk of funds (10 per cent each) followed by Rajasthan (9.9 per cent), Andhra Pradesh (8.7 per cent) Madhya Pradesh (7.5 per cent) and Karnataka (6.1 per cent) (chart 6).