Demonetisation: three fold spike in MGNREGA; Ministry may ask for more funds


New Delhi, January 9: There is no official word if PM Modi led demonetisation has ceased black money in the system, countered terrorism attempts or made any significant addition to the economy, however reports of job loss and shut down are rampant ever since noteban was announced. Though manufacturing, investment proposals, and consumption has been significantly hurt in all industries, Small and Medium businesses have burnt the maximum toll.

As a result, steep fall in temporary employment opportunities is visibile.

The best indicator of the above statement is a record 60% increase in MGNREGA in December as compared to the average of previous months.

Mahatma Gandhi National Rural Employment Guarantee Scheme or MGNREGA is a flagship social security program that was run by UPA in 2006 and is now one of the best indicators to monitor rural distress in the country. The sudden spike in MGNREGA on site work is clearly due to job loss of migrant labourers due to the cash constraints following demonetisation.

Records from the Ministry of Rural Development, show that between July and November 2016, the average labourer turnout per day under MGNREGA was 30 lakh, while in December the average numbers went up to 50 lakh per day. On January 7, 2017, the labour turnout for the day was as high as 83.60 lakh which is three times the daily pre-demonetisation average of 30 lakh. The official who reported the data said that it is expected to touch 1 crore soon.

Last time, MGNREGA numbers were higher between April and June when monsoon were delayed, and drought-like conditions prevailed in the many parts of India. Looking at MGNREGA numbers, you can access the situation of rural stress in the country said the official.

He further added, these figures in rural areas can be attributed to reverse employment for informal workers employed in the Micro, Small and Medium Enterprises. For, MNREGA is the employment guarantee scheme of 100 days. Failing to provide the employment, the government offers employment allowance to the family.

According to official stats, more than 85% of the Rs 47,500 crore outlay for MGNREGA has already been spent this year. The Rural Development Ministry is expected to write to the Finance Ministry, asking for an additional Rs 8,000 crore so that the scheme could run smoothly until the end of the current fiscal.

Social activist Nikhil Dey of the Rajasthan-based Mazdoor Kisan Shakti Sangathan said, post-demonetisation, demand for work under MGNREGA could have been even greater had the government made that much of work available.We recently had a public hearing in Beawar in Ajmer where it emerged that half of the 600 factories had shut, and the rest were running at half their capacity. In such a scenario, those coming from rural areas looking for jobs have no option but to go back to their villages and seek jobs under MGNREGA,” Dey said.

While no official figures have been released on the impact of demonetisation on MSMEs, according to D L Sachdeva, who is national secretary of the All India Trade Union Congress: Over 40% of workers were rendered jobless in the immediate aftermath of the move. And this has led to a major reverse migration. The job loss in these small and medium enterprises could be temporary, but the situation has not normalised yet.

Wefornews Bureau

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