The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has recently witnessed a surge in the engagement of a youthful workforce. Analysis of age-specific data denotes that there is an increasing trend in the employment of individuals within the 18-30 age bracket post-2017-18. The total number of MGNREGA workers has also seen a rise over the years.
A Rising Trend in Youth Participation
The share of young workers under MGNREGA in the fiscal years 2018-19 and 2019-20 were noted to be 9.1% and 10.06% respectively, indicating a steady rise from a mere 7.73% in 2017-18. This increase mirrors certain key events such as demonetisation and the implementation of the Goods and Services Tax (GST).
Effects of Demonetisation and GST Rollout
Post-demonetisation, approximately 1.5 million jobs were lost, leading to a decline in the Labour Force Participation Rate(LPR). Workers who lost their jobs turned towards MGNREGA for employment opportunities. Similarly, the rollout of GST, despite enhancing economic efficiency, forced many small enterprises out of business, leading to unemployment and further increasing dependence on MGNREGA.
MGNREGA’s Role in Economic Stability
MGNREGA has played a significant role in reducing rural poverty, positioning it as a prime example of rural development as per the World Development Report 2014. However, challenges such as low wage rates, insufficient budget allocation, payment delays, and excessive centralisation constrain the potential benefits of the scheme.
| Year | No. of Individuals Employed (in crores) |
|---|---|
| 2014-15 | 6.71 |
| 2015-16 | 7.21 |
| 2016-17 | 7.65 |
| 2018-19 | 7.76 |
Present Challenges
The challenges include wage rates lower than the state minimum wages in 17 states leading to disinterest among workers, and more than 80% of funds being expended within the first six months every year indicating sub-optimal fund allocation. The lack of provisions for calculating full wage delays and paying compensations despite Supreme Court orders, and excessive centralisation rendering Panchayati Raj Institutions powerless, are also major issues.
The Government’s Response
Despite these problems, efforts are being made by the government to expand the scope of MGNREGA. Plans are underway to incorporate skill training into the scheme, shifting it from just a job creator to a facilitator of skill development across India.
About MGNREGA
The Mahatma Gandhi National Rural Employment Guarantee Act, 2005, guarantees 100 days of wage employment in a financial year to any rural household with adult members volunteering for unskilled work. This demand-driven, social security and labour law enforces the ‘right to work’. It is monitored by the Ministry of Rural Development (MRD), Government of India, in conjunction with state governments. More than 65% of the tasks undertaken pertain to agriculture and associated activities.
