Work demand under rural job scheme declines again in December

Demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) moderated for a second straight month in December from a year before, official data showed, reflecting the impact of improved economic activities.

The preliminary data compiled by the rural development ministry showed 24.08 million individuals opted for work under the MGNREGS in December, down 7.1% from a year before. Data for the last two months of 2023 – demand fell 6.9% in November – show a dramatic reversal from a 17.6% jump in October.

Most of the demand came from Tamil Nadu (3.35 million), Rajasthan (2.60 million), Madhya Pradesh (2.38 million), Uttar Pradesh (2.34 million) and Bihar (1.59 million).

The individuals who sought work in December represented 19.97 million households, down 5.7% from 21.18 million households a year earlier.

Demand for jobs under the scheme typically falls when economic activity improves and employment opportunities open up in sectors like agriculture and industry.

The moderation in job demand will partly reduce the pressure on the government to pump in funds to meet the enhanced spending requirements under the scheme, after the budgetary outlay of ₹60,000 crore for fiscal 2024 was exhausted by November itself.

The government subsequently provided ₹10,000 crore in urgent assistance to meet demand. It provided ₹14,524 crore for the scheme in the first batch of supplementary demand for grants for FY24, which included the urgent aid. The data typically gets revised when updated information comes in. The finance ministry last week said the economy will “comfortably” surpass its earlier target of 6.5% growth in FY24, as it expected the robust economic activity in the third quarter of FY24 to continue through the March quarter as well.

To be sure, sequentially, a larger number of individuals and households demanded work under the scheme in December: up 15% and 13%, respectively, from November.

Despite the latest drop on a year-on-year basis, work demand from individuals under the NREGS rose 3.3% this fiscal year until December from a year before to 259.51 million, thanks to elevated demand between July and October. The demand came from 206.63 million households from April through December, recording a 6.4% increase from a year earlier.

After registering a marginal decline in the fiscal first quarter, work demand from individuals rose at a faster pace between July and October. This was mainly due to an erratic monsoon that prevented the usual large-scale migration of workers to farming and a tentative industrial recovery, experts have said.

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