Four Ways that MGNREGA Can Be Expanded to Help India's Rural Economy -Mampi Bose and Shantanu De Roy
While the increased allocation and attention is welcome, it will not be enough to counter the crisis.
The current pandemic has led to loss of livelihood of substantial sections of the India population. With the economy, particularly production activities in the big urban centres, having come to a standstill, a process of reverse migration to villages took place. This decline in economic activities is taking place against a background of continuously declining growth rates that the nation has been witnessing over the last three years.
In this context, public and policy attention has returned to MGNREGA, India’s rural employment guarantee programme. Particularly, whether it can be a source of relief to substantial sections of the workforce whose livelihood options have been seriously eroded due to the pandemic. One school of thought is that expanding the scale of work under MGNREGA will enhance purchasing power of the rural poor and, through a ‘multiplier effect’, could allow the economy to revive.
Finance minister Nirmala Sitharaman has acknowledged the crucial role that the employment guarantee scheme can play in reviving the rural economy. This was reflected in the recent announcement of the minister in which an additional Rs 40,000 crore have been allocated for the scheme. In Union Budget presented in February 2020, Rs 61,500 crore were allocated for the scheme, which was much lower than the revised estimate of Rs 71,001.81 crore in 2019-20. In all, Rs 1,01,500 crore have been allocated for the MGNREGA in the current financial year.
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TheWire.in, 11 June, 2020, https://thewire.in/labour/rs-1-lakh-crore-and-the-mgnrega-gambit-for-boosting-indias-rural-economy