More Young People Are Seeking Work Under MGNREGA

Is higher unemployment among the youth pushing them towards work under MGNREGA?

<div class="paragraphs"><p>Workers labor on a construction site at a village in Khair district, Uttar Pradesh, India, on Wednesday, Sept. 2, 2020.  Photographer: Anindito Mukherjee/Bloomberg</p></div>
Workers labor on a construction site at a village in Khair district, Uttar Pradesh, India, on Wednesday, Sept. 2, 2020. Photographer: Anindito Mukherjee/Bloomberg

A larger share of young Indians are seeking work under India's rural jobs guarantee programme—a scheme which acts as a backstop in times of stress.

The share of employed persons in the age group of 18-30 rose for the second straight year. It rose to comprise 12% of all employed persons so far in FY22, from 10.6% in FY21 and 7.1% in FY20. The scheme employed 1.1 crore Indians in this age bracket in the financial year so far, compared to 1.2 crore in FY21 and 56 lakh in FY20.

The share of persons employed under the scheme in the age group of 31-40 remained close to its five-year average at 29.2% in FY22. The share of employed persons in other age groups saw a modest drop.

The share of the young workforce aged below 30 years under the scheme has increased sharply, reversing the trends seen during the pre-Covid period, said Nikhil Gupta, chief economist at Motilal Oswal. The shift is likely because of the migration due to the pandemic when those who lost jobs in urban areas went back to work in rural areas, he said.

Jayati Ghosh, professor at the Centre for Economic Studies and Planning, School of Social Sciences at Jawaharlal Nehru University, said that the age group of 18-30 year olds is now a high unemployment category and the changing share of this segment under the scheme reflects that.

According to latest periodic labour force survey, unemployment rate in the 15-29 age group in urban areas continues to remain significantly higher than unemployment rate across all ages. Unemployment rate in the 15-29 age group was estimated at 22.9% compared to 9.4% on aggregate as of the January-March 2021 quarter. Data for this period for rural areas is yet to be published.

We have destroyed the country's demographic dividend. There's more open unemployment in youth and, anecdotally, we know that a large number of youth have also dropped out of the education system amid the pandemic to work instead.
Jayati Ghosh, Professor, JNU

In Jharkhand, the share of 18-30 year olds is 25.4% — the highest in the country. Other states which saw a higher share of younger people seeking work compared to the national average include Arunachal Pradesh, Meghalaya, Madhya Pradesh, Gujarat, Bihar, Rajasthan and Uttar Pradesh. Some of these states saw significant reverse migration back to rural areas due to the pandemic.

These are also the states which have seen the biggest jump in share of younger people seeking work under the scheme.

In Madhya Pradesh, this share has doubled.

Supply Crunch Persists

The increase in demand for work from younger people is also part of a broader trend of elevated employment under the scheme. In December, demand for work showed an uptick and rose to a three-month high, even as the crunch in supply worsened.

2.3 crore households demanded work under the scheme up to Dec. 26, 2021, compared to 2.1 crore households for the full month of November, according to data available on the official MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) portal. Work was provided to 1.2 crore households up to Dec. 26, 2021, compared to 1.8 crore households in November.

The central government has been starving the scheme of funds in a bid to veer away and eventually bring down demand, Ghosh said.

In November, the government had increased the allocation for the scheme. But the top-up remains inadequate, said Ghosh.

The Ministry of Rural Development was allocated Rs 22,039 crore for infusion into the rural jobs guarantee scheme. This was over and above an initial allocation of Rs 73,000 crore in the union budget for FY22. Accounts available on the MGNREGA website show Rs 11,409 crore worth of due payments and total expenditure amounting to Rs 94,834 crore as on Dec. 26, 2021.

As many as 93 lakh workers per month were employed under MGNREGA in FY21. In the first eight months of FY22 between April–November 2021, as many as 1.1 crore people per month worked under MGNREGA, implying a rise of 20% over the preceding year.

The situation has been such that those who had migrated from urban areas to rural are once again returning to urban areas after trying their luck in employment under the scheme, MGNREGA activist Sanjay Sahni said. With lack of adequate employment opportunities, they have to settle for lower wages under MGNREGA, which too they no longer have adequate access to, despite there being a legal mandate, Sahni said.