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As demand for MNREGA jobs rise, allocation for scheme may have to go up

In times of distress, it is UPA's schemes that will come to the rescue of the Narendra Modi government.

In all likelihood, the government will have to take resort in the rural job scheme, introduced by the UPA and ridiculed by Modi himself, to deal with the pain induced by the demonetisation on the rural sector.

After the demonetisation of Rs 500 and Rs 1,000 currency notes from 9 November, the rural areas, which were dominated by cash payments, have been under distress. The reason for this is many - from low bank penetration to net connectivity.

Labourers work on a dried lake to try and revive it under the National Rural Employment Guarantee Act (NREGA) at Ibrahimpatnam, on the outskirts of Hyderabad, June 17, 2009. The government has started a pilot project to quantify climate benefits from the NREGA, the anti-poverty scheme that could become one of the country's main weapons to fight criticism it is not doing enough to tackle global warming. The flagship anti-poverty plan, started three years ago, provides 100 days of employment every year to tens of millions of rural poor, a move that partly helped the Congress party-led coalition return to power in a general election. REUTERS/Krishnendu Halder (INDIA ENVIRONMENT BUSINESS EMPLOYMENT)


What has added to the worries is the return of the migrant labourers from the urban centres after job losses. A report in The Indian Express said the SME sector has seen 35 percent of the jobs lost as a direct consequence of the note ban.

There has been widespread job losses in other unorganised sectors like construction. According to a report in Reuters in early December, hundreds of thousands of construction workers have returned home after the demonetisation.

The report said most of the building sites are now facing delays as. "The growing labour shortage threatens to slow a recovery in India's construction industry, which accounts for 8 percent of gross domestic product and employs 40 million people," the article said.

The return of such labourers has resulted in a spike in demand for Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGA) jobs, says another report in The Indian Express.

According to the report, the demand has witnessed a 60 percent rise in December in average daily demand for jobs.

Labourer turnout per day under NREGA was 30 lakh during July-November 2016. This rose to 50 lakh in December and on 7 January the demand hit a high of 83.60 lakh, the report says.

“MSMEs and other sectors did get hit due to demonetisation. In such cases, the labourers go back to their villages and seek work under MGNREGA which is one of the main reasons for the increase,” an official has been quoted as saying in the report.

With the increasing demand for jobs, it is sure that the government will have to increase the allocation for the scheme.

With inputs from Kishor Kadam

For full coverage of Union Budget 2017 click here.

Updated Date: Jan 15, 2017 21:10 PM

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