Demand for MGNREGA has decreased ever since maximum in June 2020, although it is still higher than pre-COVID, according to Eco Survey | Hot News

The Department of Economic Affairs said in its annual Economic Survey that demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme has dropped from its peak during the first lockdown, but is still higher than pre-COVID levels, noting that this is "an indicator of rural labour markets."

It advised against drawing inferences regarding migrant labour mobility based on MGNREGA employment, noting that the biggest demand for work under the plan was recorded in States that are typically migrant workers' destinations, rather than source states.

Advocates for rural workers said that the reduction in demand is due to a lack of financing, and called for a major increase in the scheme's allocations in Tuesday's Union budget.

Despite the fact that demand for labour stabilized following the second COVID wave, with a peak of 4.59 crore people in June 2021, aggregate MGNREGA employment is still greater than pre-pandemic levels of 2019, after accounting for seasonality of demand, according to the Survey's research.

"The supply side effect of MGNREGA funding distorts the demand picture," said Nikhil Dey, founder of the Mazdoor Kisan Shakti Sangathan, a national union for unorganised rural labourers. "There is no doubt that demand increased during the lockdown and when money was available through the increased allocation," he said, nothing that the Centre had injected 40,000 crore in additional funding early in the first lockdown, ensuring that scheme administrators had enough money to handle the surge in demand.

Additional financing was not forthcoming until late in the year in 2021-22, when several States had already run out of money, resulting in an artificial reduction of demand on the ground. "Activists have requested a budget allocation of 2.6 lakh crore for the fiscal year 2022-23, which would cover the mandated 100 days of labour for every active job card holders." "However, anything less than 1.4 lakh crore, which is the amount spent in 2020-21 plus inflation, is a clear suppression of demand by the government," Mr. Dey added.

The survey also charted demand trends each state. "Intuitively, increasing MGNREGS demand may be directly tied to migrant labour migration, implying that source states will be more impacted." Nonetheless, State-level analysis shows that MGNREGS employment in most months of 2021 was lower than the corresponding levels in 2020 for many migrant source States like West Bengal, Madhya Pradesh, Odisha, and Bihar," it said, adding that demand was higher for migrant recipient States like Punjab, Maharashtra, Karnataka, and Tamil Nadu.

Mr. Dey pointed out that, even before COVID, Karnataka, Tamil Nadu, and Rajasthan had a track record of administrative sensitivity and effectiveness when it came to MGNREGA implementation. "These States also see high levels of short–term migration within their own borders," added Rajendran Narayan, an assistant professor at Azim Premji University and a member of an MGNREGA research group, arguing that many rural workers may have been hesitant to seek work in urban areas of their own States during COVID-19, resulting in higher demand for MGNREGA work in their villages.