Demand for work under NREGA declines in FY23

In an indication that the labour market is now recovering post the pandemic as economic activities have gained momentum, the number of people who availed employment under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) declined by 16.9% in 2022-23 from a year ago. The data indicates that employment availed under the flagship scheme has fallen to levels lower than even FY21, when the pandemic was still underway.

According to official data, about 102.5 million people demanded work under the scheme in FY23 as against 123.4 million in FY24. Meanwhile, the number of people who availed work under the scheme also declined by 17.4% to 87.6 million in FY23 as against 106.1 million in FY22. In FY21, the number of people who demand and availed employment under the scheme was even higher at 133.1 million and 11.9 million respectively.

The average number of households that completed 100 days of work also fell substantially to 3.6 million last fiscal from 5.9 million in FY22.

Experts believe that labour market conditions have shown some improvement with many workers returning to urban centres as the pandemic has eased and activities such as construction have picked up.

“With the end of rabi sowing, the demand for work under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) recorded a slight uptick in March month-on-month (m-o-m). The y-o-y growth rate remains in negative territory, indicating improved rural labour market conditions as compared with a year ago,” said the article on State of the Economy in the Reserve Bank of India’s monthly bulletin for April 2023.

To protect rural labourers from the hardships of higher inflation, the daily wages under MGNREGS have been revised by the central government by 2 -10% (`7- 26/day) with effect from April 1, 2023, it further said. NREGA is a flagship scheme of the government, which aims to provide at least 100 days of guaranteed wage employment every fiscal to all adults who volunteer to do unskilled manual work. About 269 million workers are registered under the scheme of which 142.6 million are active.