Resource centre on India's rural distress

India needs an urban replica of MGNREGA -Nitya Chutani

As a part of the relief measures, while the PDS system could reach a vast majority of people both in rural and urban areas, the system has failed to identify the affected informally employed labour force in largely urban areas. This makes a case for introducing an urban replica of MGNREGA

With laudable measures like the increased allocation in Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Pradhan Mantri Garib Kalyan Yojana in several districts, rural economy has congruently depicted a sharp revival in employment numbers. Centre for Monitoring Indian Economy (CMIE) data shows that after easing of lockdown and gradual resumption of economic activities in states albeit in a phased manner starting 1 June, rural unemployment scenario has fared better than its urban counterpart.

Quite evidently, this has been a result of government’s immediate response to address the mounting rural distress as it began to emerge as a humanitarian crisis when lakhs of interstate migrant workers were forced to go back to their homes in the rural pockets of several states. In the middle of all this, what went unattended was a slowly paralyzing urban India as the majority of people working in urban areas had been informally employed. Just like those several thousand migrant workers, these non-migrant urban resident workers also fell through the cracks when their incomes began to dry up and none had a social safety net to fall back on. This was not just the phenomenon in informal nets, but the formally employed suffered a similar plight too as they faced salary cuts and layoffs. This was an expected outcome as the cash flows of job providers spread across several sectors and throughout the value chain were affected, not to forget the growth backbone Micro, Small and Medium Enterprises (MSMEs) too. More so because they were already trying their best to stay afloat amid the slowdown before the covid outbreak. With unlocking, however, several sectors like manufacturing and services have started opening up and their revival now is clearly dependent on what new forms demand will take post covid times. For example, FMCG sales picking up indicate an increased demand for essentials, discretionary spending remains muted as people turn cautious, and hospitality and travel would take a long time to revive, among others.

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