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action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /var/www/html/wp-includes/functions.php on line 6114The case study discusses the sudden surge in demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) due to COVID-19 and the challenges in the current system. It also provides details of lessons for other countries from India’s experience with MGNREGA.
The COVID-19 pandemic and the resulting lockdown in India had a dire effect on employment and income across the country. The Government of India attempted to mitigate the impact by announcing various relief measures under the Pradhan Mantri Garib Kalyan Yojana (PMGKY). Under PMGKY, the GoI worked to provide relief to a large number of unemployed persons, including migrant workers, who had returned to their villages. These relief measures were channeled through the government’s flagship cash-for-work program, Mahatama Gandhi National Rural Employment Act (MGNREGA). It increased the daily wage rate of workers from USD 2.44 (INR 182) to USD 2.70 (INR 202) and subsequently increased its budget allocation.
MSC (MicroSave Consulting) undertook a mixed-method study [2] the impact of COVID-19 on the income of low-income households and assessed the government’s COVID-19 relief package, Pradhan Mantri Garib Kalyan Yojana (PMGKY). The study covered the effect of the steps taken under MGNREGA. The first and second phases of the study were conducted respectively in May, 2020 during the three-month complete lockdown and in September, 2020, after the lockdown norms were eased. The study covered 1,165 MGNREGA beneficiaries in Round 1 and 1,186 beneficiaries in Round 2 across 18 states and union territories.
The government tried to absorb as many people under MGNREGA as possible. However, the significantly high demand for work made the task challenging. In just 50 days, between 1st April and 20th May, 2020, 3.5 million workers sought employment under the program. In comparison, in the year 2019-20, 1.5 million workers had applied for MGNREGA jobs. Addressing the higher demand, the government provided more work as illustrated in Chart 1, which compares the number of person-days[3] generated under MGNREGA in 2019 against those in 2020. Except in the month of April, 2020 when the lockdown restricted work, person-days generated in 2020 were much higher than in 2019. As per official data, only 15% of households enrolled under the program reported receiving work in round 1 of our study, which increased to 53% in round 2.
One of the biggest achievements of the scheme was that it provided work to women in rural areas. While the Indian government mandates a minimum of one-third participation by women in MGNREGA, 53% of the persons employed under MGNREGA were female in the fiscal year 2020-21.[4] Additionally, MGNREGA is implemented by local panchayats[5], which must have 50% women representatives. Reservation for women in the program and in its implementing body have led to a massive increase in participation by women.
The government also attempted to make timely payments to the workers. In May, 2020, 40% of respondents reported that they had not received their pending MGNREGA wages so far. In September, 2020, the government ensured that it cleared all dues as 83% respondents reported that they had received all payments pending for the work done in preceding months. According to official data, 87% of the total payments in 2020-21 have been paid.
The government attempted to absorb more people under MGNREGA. However, due to the excessive demand for jobs created by the pandemic, the program could not accommodate everyone. One respondent said, “If 20 people are required for a specific job, more than 200 are available to do the work.” As a result, 31% of respondents who were enrolled in MGNREGA did not receive work after applying.
As more labour was available during the lockdowns, project completion was much quicker under the program. This reduced the number of days required to complete a project—thus reducing the number of days a person was employed and earned wages. Only 7 million of the 75 million employed under MGNREGA received work for full 100 days in the year 2020-21.
What could have been better?
MGNREGA shouldered some of the adverse effects of the pandemic, providing much-needed employment and income to returning migrants and other vulnerable segments. Its efficacy as a tool to address future economic shocks are likely to improve if some of its design and implementation issues are solved.
Lessons for other countries from India’s experience with MGNREGA
Many countries and humanitarian organizations launched cash-for-work programs as a COVID-19 relief measure. India’s 16 years of experience with MGNREGA as an employment support program and now as a COVID-19 relief measure may help budding cash-for-work programs across the globe.
Developing nations can use these lessons to better serve their unemployed and low-skilled workers.
MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) is GoI’s social security program that guarantees at least 100 days of employment to unemployed, low-skilled workers.
[1] MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) is GoI’s social security program that guarantees at least 100 days of employment to unemployed, low-skilled workers.
[2] Detail methodology can be read here.
[3] Person-days is the number of people working per day times the number of days worked.
[4] The percentage of female participation has decreased slightly from 56% in 2016-17 to 53% in 2020-21.
[5] A Panchayat is a key village level government institution responsible for fulfilment of the community’s aspirations with respect to development of the village. It usually consists of five respected village elders.
[6] CMIE (Center for Monitoring Indian Economy) reported the unemployment rate in India in September, 2020 to be 5.88% in rural areas while 8.45% in urban areas.
[7] 17% of households with male primary wage earners reported an increase in income after the lockdown restrictions were eased while only 8% households with female primary wage earners reported the same. 10% households with male primary wage earners could get employed again while only 5% households with female primary wage earners could do the same.
[8] In rural areas, most women are unable to travel far from their houses so the work should be available within a 5km radius.
[9] Source: Survey by Indonesia Internet Service Provider Association 2017
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