Rural Economic Distress

Tackling rural economic distress

Tackling rural economic distress- There is an urgent need to strengthen the public distribution system and the MGNREGS
To buy our online courses: Click Here


Tackling rural economic distress

Several States are under lockdown again. This will have severe implications for the livelihoods of those in the informal sector. There is adequate evidence that migrant workers and the rural poor have been facing great distress over the past one year and the crisis for food and work is only going to intensify further.

Hunger and distress

A few months ago, the Right to Food campaign and the Centre for Equity Studies published a ‘Hunger Watch’ report which compared the pre-lockdown situation last year to the situation in October 2020 to assess the impact of the nationwide lockdown. The survey involving 4,000 respondents across 11 States exposed the life and livelihood uncertainties of people belonging to low-income categories in the informal sector. In October 2020, 27% of the respondents said that they had no income; 40% respondents said that the nutritional quality of food had become “much worse”; and 46% of the respondents said they had to skip one meal at least once in the day in October 2020.

The migrants have again become vulnerable due to the lockdown in different cities. While many have once again headed to their villages, a large population has got stranded in different parts of the country without work. The Stranded Workers Action Network, a group of individuals helping distressed migrant workers since last year, has been reaching out to workers for providing essential help. According to them, 81% of the people whom they reached out to said that work had mostly stopped since April 15, 2021 and 76% of the workers said they are short of food and cash and require immediate support.

In this context, there is an urgent need to strengthen the public distribution system (PDS) and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The government announced 5 kg free foodgrains for individuals enlisted under the National Food Security Act (NFSA), for May and June 2021. The government should expand PDS coverage immediately and include all eligible households under the schemes. According to an independent study, about 100 million people are excluded from the ration distribution system owing to a dated database based on the 2011 Census.

The Centre should also extend the free foodgrains programme to a year instead of limiting it to two months. The economic crisis is likely to last for a long time. It is being reported that India procured record amounts of rice and wheat last year through mandis. The total procurement is way more than the current requirement for PDS. It is thus quite possible to expand the safety net of the NFSA.

Inadequate provisions

The Centre had allocated ₹73,000 crore for 2021-22 for MGNREGS and notified an annual increment of about 4% in wages. Both these provisions are inadequate to match the requirements on the ground. The central allocation for MGNREGS is about ₹38,500 crore less than last year’s revised estimate. Of the 7.56 crore households which worked in MGNREGS in 2020-21, even if 1 crore households opt out of the scheme this year, the Centre should still budget for 75-80 days of employment in the year for 6.5 crore families given the current scale of economic distress. By this rationale, at the current rate of ₹268/day/person, at least ₹1.3 lakh crore will have to be budgeted. The government should also re-consider its decision of a mere 4% increase in MGNREGS wages and hike it by at least 10%. This will mean another ₹10,000 crore. Therefore, at least ₹1.4 lakh crore will be required to ensure uninterrupted implementation during the year.

Tackling rural economic distress

A large population is facing hunger and a cash crunch. The situation is only becoming more dire as the pandemic continues to rage on. Therefore, the Union government should prioritise food and work for all and start making policy reforms right away.


Also read: One-state solution the way forward in Palestine