Indian Economy
Youngest Workers Rise in MGNREGA
- 22 Oct 2019
- 5 min read
The proportion of young workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), has begun to rise.
- An analysis of age-wise data of persons employed in MGNREGA indicates that the share of the workforce in the 18-30 age bracket began moving up after the financial year 2017-18.
- The ratio of young workers among total MGNREGA workers has been rising to 9.1 % in 2018-19 and 10.06 % in 2019-20 from 7.73% in 2017-18.
- The total number of individuals working under MGNREGA has also gone up in recent years.
- For instance, 6.71 crores in 2014-15,7.21 crore in 2015-16, 7.65 crores in 2016-17 and 7.76 crores in 2018-19.
- The rising trend of the young workforce among MGNREGA workers could be a reflection of the following events:
- Demonetisation
- Approximately,1.5 million jobs were lost after demonetization. Alongside this loss of jobs, there has been a decline in the Labour Force Participation Rate (LPR).
- As a result of job loss, many workers opted for MGNREGA for livelihood.
- For a developing economy like India, a drop in the labour participation rate is a sign of an economic slowdown.
- The rollout of Goods and Service Tax (GST)
- The implementation of GST improved economic efficiency but the complexities of the new tax regime have driven many small enterprises out of business forcing unemployment.
- Uniform tax regime through GST has also pushed many small and medium enterprises in debt.
- Both these events caused disruptions in the economy resulting in a surge of workers opting jobs under MGNREGA.
- Demonetisation
- MGNREGA has helped to reduce rural poverty to a greater extent, in turn, it has also been described as a "stellar example of rural development" by World Development Report 2014.
- But, still, it is facing few challenges like:
- Low Wage Rates:
- Currently, MGNREGA wage rates of 17 states are less than the corresponding state minimum wages.
- The low wage rates have resulted in a lack of interest among workers in working for MGNREGA schemes, making way for contractors and middlemen to take control, locally.
- Insufficient budget allocation:
- Almost every year, more than 80% of funds get exhausted within the first six months.
- Thus, the fund allocation is insufficient to ensure proper implementation on the ground.
- Regular payment delays:
- Despite the order of the Supreme Court, no provision has yet been worked out for calculation of full wage delays and payment of compensation for the same.
- Too much centralisation weakening local governance:
- A real-time MIS-based implementation and a centralised payment system has further left the representatives of the Panchayati Raj Institutions with literally diminished its role in implementation, monitoring and grievance redress of MGNREGA schemes.
- It has hardly have any power to resolve issues or make payments.
- Low Wage Rates:
- Though there are issues with MGNREGA, the government is trying to improve the scope of the scheme through diversified aspects.
- The central government is working on an initiative to include skill and training as a part of MGNREGA to make it not only a job creator but also to increase skilled labours across the country.
Mahatma Gandhi National Rural Employment Guarantee Act, 2005
- The Act aims at enhancing the livelihood security of people in rural areas by guaranteeing hundred days of wage employment in a financial year to a rural household whose adult members (at least 18 years of age) volunteer to do unskilled work.
- The central government bears the full cost of unskilled labour, and 75% of the cost of material (the rest is borne by the states).
- It is a demand-driven, social security and labour law that aims to enforce the ‘right to work’.
- Ministry of Rural Development (MRD), Government of India in association with state governments, monitors the implementation of the scheme.
- Agriculture and allied activities constitute more than 65% of the works taken up under the programme.
