Data for the person-days of employment generated under MGNREGA indicates that the total volume of person-days in the first quarter of 2021-22 is lower than in 2020-21. However, it is too early to conclude on the trends for 2021-22 as some states witnessed an unusual increase in demand for work in June 2021.
In an earlier story, we had highlighted how MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) came to the rescue of rural employment in view of job losses due to the COVID-19 pandemic. The rural work program continues to be a boon for migrant workers who are back in their native places due to restrictions & lockdown measures in various parts of the country.
The nationwide lockdown in 2020 and the measured opening up of the economy have resulted in job losses with migrant workers among the most affected. The earlier story had also noted the significant increase in the demand for work under MGNREGA, especially in the states which were affected due reverse migration.
The emergence of a more severe second wave of COVID-19 infection across the country has resulted in many of the states resorting to lockdown measures once again to prevent the spread of the disease. These new set of restrictions in 2021 resulted in a shutdown on economic activity at varying levels in the states unlike the nationwide lockdown imposed in 2020.
In this context of the second wave of COVID-19 infection, we take a look at the trends in rural employment under MGNREGA and how the numbers compare to the same months in 2020.
Person Days under MGNREGA during Q1 of 2021-22 lower than the previous year
During the nationwide lockdown due to the first wave of COVID-19 infection in 2020, there was an exponential increase in the number of person-days of work provided during May 2020 compared to April 2020. This further increased during June 2020.
The number of person-days of work during these two months of May & June in 2020, was nearly 1.7 times higher than the number in the same two months of 2019. However, during May-June 2021, the number of person-days of work provided is lower than in 2020. In other words, the number of person-days of work provided during the first three months (April, May & June) of 2021-22 is closer to the levels seen in 2019-20 compared to 2020-21.
However, the impact of the second wave & the subsequent lockdowns across the states can be seen during the month of June 2021. While the number of person-days of employment in June 2021 is still lower than in June 2020, it was higher than in May 2021 and has seen an increasing trend. This is in contrast to the general trend in the earlier years (before the pandemic), where-in the number of person-days of employment in June is lower than in May.
In the case of the number of households for whom the work is provided, there is an increase during June 2021 compared to May 2021. However, the overall numbers for the quarter are less than that of the previous year.
Lesser Seasonal Variance during the Pandemic, compared to previous years
The demand & provision of work under MGNREGA is seasonal. The trends in the earlier years point to the seasonal nature of MGNREGA employment. Lack of alternate employment, for instance during the non-harvest season, increases the demand for work under MGNREGA. If the trends for the previous year are analysed, the number of person-days usually increases during the months of May & June.
This is followed by a period of decline, only to increase around January-February. While the volume of person-days varies from year to year, the general trend is that of an increase in demand during these two distinct periods, accentuated by a steep fall in demand in the other period.
The same trend of increased employment during May & June was also seen in 2020, during the first year of the pandemic. However, as highlighted earlier, this increase has been exponential in these two months of the pandemic year of 2020.
In July 2020, there has been a steep fall in employment under MGNREGA, in line with the trend of the previous years. However, in the ensuing months before the next increase i.e., up until January-February, the fall in employment is not as pronounced as in the previous years.
The month-on-month person-days of work under MGNREGA remained mostly even during this period. This could point to a section of migrant workers relying on MGNREGA for employment because of the uncertainties induced by the pandemic which was not the case in the earlier years.
Higher increase of employment under MNGREGA during June in West Bengal, Rajasthan & U.P
In the earlier story, we had highlighted that the highest employment under MGNREGA in the immediate aftermath of the nationwide lockdown was in the states of West Bengal, Rajasthan, Uttar Pradesh & Bihar among others. The increase across these states was specifically in the months of May & June 2020. The trends for the rest of 2020-21 & during the first quarter of 2021-22 are varied in these states.
We had observed that most of these states are those with reverse migration due to the COVID-19 induced pandemic. As noted earlier, the increase in MGNREGA employment indicates that the migrant workers could have relied on MGNREGA as an alternate for the loss of employment opportunities elsewhere.
After June 2020, the country witnessed phase-wise unlocking of the economy, which could have triggered the migrant workers to leave their native states and get back to employment in other states.
As noted earlier in this story, though the number of person-days of MGNREGA employment has reduced post-June 2020, there has been a month-on-month uniformity in contrast to the seasonal changes observed every year. However, this trend is not the same across these major states with high MGREGA numbers.
- Uttar Pradesh witnessed a very sharp decline in the number of person-days of employment post-June 2020. However, there was a sharp increase again in June 2021. This could be because of the seasonal increase witnessed during the month or an effect of the second wave of COVID-19.
- After falling in the number of person-days of work post-June 2020 in Andhra Pradesh, the reliance on MGNREGA increased during the last quarter of 2020-21. This increase continued during the first quarter of 2021-22 and has reached the levels of June 2020. Andhra Pradesh is among the states that witnessed a severe COVID-19 second wave.
- The trends in Bihar & Madhya Pradesh have alternated over the year. Bihar has shown an increase in MGNREGA employment towards the last quarter of 2020-21. However, in contrast to the trend in other states, there is a sharp decline in June 2021.
- Apart from Andhra Pradesh, West Bengal is another state which has witnessed a significant increase in MGNREGA employment during the first quarter of 2021-22.
While the trends vary across the states, there has been a general uptick in the number of person-days of MGNREGA employment during June 2021 for most of the states. This could be a result of the seasonal demand as well as lockdowns during the second wave.
Near three-fold increase in the spending under MGNREGA in 2020-21 compared to 2015-16
In 2020-21, the budget estimate (BE) for MGNREGA was Rs. 61.5 thousand crores. However, in light of the pandemic and the increase in demand for employment under MGNREGA, the estimate was revised to Rs.1.11 lakh crores during the revised estimates (RE).
In 2021-22, the BE for MGNREGA is Rs.73 thousand crores. This amount, although higher than the previous budget estimates, is still lower than the revised estimates for 2020-21. This was with an assumption that the dependency on MGNREGA would not be as high as in 2020-21.
Over the years, the actual spending on MGNREGA has increased year on year and is generally higher than the initial budget estimates. The data for the first quarter of 2021-22 shows that there is a fall in the number of person-days of MGNREGA employment compared to the first quarter of 2020-21. However, June 2021 has shown early signs of an increase in the demand for MGNREGA, even in 2021-22 as observed in a few of the states like U.P, West Bengal, Andhra Pradesh, etc.
The fall in demand for MGNREGA employment post-June in earlier years can be attributed to seasonal variations and the opening of the economy in 2020. However, it is too early to conclude if the trend in the current financial year would be similar to the previous years since the uncertainties surrounding the pandemic haven’t been resolved.
It has to be seen if the reliance on MGNREGA for employment would continue in the subsequent months of 2021-22 especially in the light of a widespread discourse around future waves.