MGNREGS as the Face of India’s Welfare System -Dr Amit Kapoor

According to the International Labor Organization (ILO) World Social Protection Report 2020-22, 8.8% of working hours worldwide were lost in 2020, equivalent to 255 million jobs. full-time, which has negative repercussions on the unskilled or low-skilled labor force, on which the job loss is most severe. This has not only exacerbated socio-economic inequalities with a large population falling into poverty, but will also have huge ramifications for labor market inequalities.

According to World Bank economic forecasts, with nearly 100 million people plunged into pandemic-induced poverty, the lack of resilience to socio-economic shocks among a large population has exposed the problems of comprehensive coverage of safety nets. social in the world. More importantly, it has shown the indispensability of social protection schemes as the pandemic has triggered a massive rollout of assistance programs and social benefits as immediate retribution for losses suffered globally. In India, a relatively sophisticated social protection system with programs such as the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and the Public Distribution System (PDS) aims to uplift the poorest of the poor. India’s experience with social protection is far from perfect with the administrative and logistical problems behind it, but it has a key lesson in providing existential security to the most vulnerable.

MGNREGS, launched in 2005, has been one of the most ambitious social protection schemes to be implemented in the world. The social security scheme aims to provide 100 days of wage employment to each household in a financial year that has an adult member willing to perform unskilled manual labor. As a social safety net program, it provides livelihood security to rural households. However, the true courage of the program was tested during the pandemic when the lockdown reduced the total number of employment days provided to rural households. Hailed as an exemplary public scheme in one of the most populous countries, where a significant portion of the population benefits from the scheme, the stakes on MGNREGS are enormous.

*The burden on MGNREGS

While the first wave saw migrant workers return to their countries of origin, further deepening the initial crisis, the burden on the regime was evident. In 2019-20, a cumulative total of 140,719,967 crore work cards were issued to registered households, while in 2020-2021, 154,287,504 crore work cards were issued. The fact that 2020-21 saw an almost 10% increase in the cumulative number of households with work cards issued compared to 2019-20 (according to data provided by the Ministry of Rural Development) is evidence enough to show reliance on the plan as a fallback option during highly volatile times like the pandemic. In addition, in 2020, 86,81,928 additional work cards were issued compared to 64,95,823 in 2019.

In addition, the total number of jobs generated under the demand-side scheme increased in the 2020-21 financial year. According to the Ministry of Rural Development press release, in July, a total of 391,630,385 crore jobs were created, which is a striking increase of 102% from 194,174,791 crore in July 2019. While in April 2020, with the start of nationwide lockdowns, saw a decline in employment due to the program, it quickly accelerated over the following months as the country slowly opened up. In May 2020, the allocation of funds in the program was increased by Rs 40,000 Crore, increasing the total budget allocation by 18.69% from 2019.

*Urban employment program

An increase in these figures indicates the importance of the program in creating rural jobs and underscores that India now needs a similar program for urban households. On the one hand, the presence of such a system in urban spaces could have avoided the massive reverse migration during the first wave and countered the imbalance between the creation of rural and urban jobs.

In addition, hard-hit sectors like construction, hospitality, and transportation have reduced employment, triggering a labor crisis in urban spaces. An urban employment plan will only close the gap. The MGNREGS is not perfect in its entirety, but it has enormous potential to keep the poorest of the poor households afloat, prevent them from falling further into abject poverty and perhaps stop the cycle of poverty.

Through its rights-based agenda, civil society organizations have also been able to leverage its design for pro-poor targeting. Although the program is decoupled from any poverty criteria (i.e. it does not subscribe to the poverty line for eligibility purposes), its social security architecture has focused on “the self-targeting” of vulnerable populations and improving community empowerment tools with a more proactive role of Panchayats.

*(Jessica Duggal, researcher, Institute for Competitiveness contributed to this article)

(Amit Kapoor is president of the Institute for Competitiveness; visiting scholar and lecturer at Stanford. Jessica Duggal, researcher, Institute for Competitiveness contributed to the article).

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Joel C. Hicks