Aakar Patel | Poverty on the rise, jobs begin to vanish: Will India explode?

A few months after taking office, Prime Minister Narendra Modi said in the Lok Sabha that MNREGA would be continued only because it would show how poorly the Manmohan Singh government had performed. “My political instincts tell me that MNREGA should not be discontinued,” he said, mocking the Opposition benches, “because it is a living memorial to your failures. After so many years in power, all you were able to deliver is for a poor man to dig ditches a few days a month”. Mr Modi said he would instead let the scheme die naturally as his government would create better jobs.

This would be done by underfunding it and by making it accessible to fewer people. After the government had taken office, Nitin Gadkari had indicated that MNREGA would be limited to less than one-third of India’s districts. Another thing that the Modi government would do to discourage MNREGA work would be to delay payments to workers who are meant to be paid in 15 days. Delays went up from 42 per cent in 2012 to 70 per cent in 2014. Six months after Mr Modi had taken office, by December 2014, except for five states, all others had received significantly lower funds from the Centre in 2014, compared to 2013.

As India’s economy has begun to weaken and unemployment has risen, the Modi government has begun to invest more and more in the scheme which the Prime Minister had called a failure. In 2014-15 MNREGA got Rs 32,000 crores, in 2015-16 Rs 37,000 crores, in 2016-17 48,000 crores, in 2017-18 Rs 55,000 crores, in 2018-19 Rs 61,000 crores, in 2019-20 Rs 71,000 crores and in 2010-21 Rs 111,000 crores. The memorial has become almost three times the size it had been under Dr Manmohan Singh. However, it is still not able to meet the demand for jobs by a population that simply has no work.

In the current year, Rs 73,000 crores has been set aside on the assumption that demand is low, but 80 per cent of the money has already been spent in the first five months of the financial year. And the most demand for work under MNREGA is going unmet as we will see.

MNREGA guarantees 100 days of employment in the year at Rs 200 per day to each registered household, meaning that the family would receive Rs 20,000 for the year.

A total of 13 crore Indian households are registered, covering half the population, which is 25 crore households. There was a decline of 24 lakh job cards in 2016 but after demonetisation there was an increase of 18 lakh cards the following year. This shows that when there is an economic stress, poor Indians fall back on MNREGA but when things are going well they look for non-MNREGA jobs.
A study by the Centre for Economic Data and Analysis (CEDA), affiliated to Ashoka University, notes that last year, MNREGA demand increased by 1.5 crore, meaning eight times more additional demand than in that hard year after demonetisation. Unfortunately, in our biggest states, the government is failing to ensure that those who want work get it. In Uttar Pradesh, the average employment per registered households was 18 days (Rs 3,600) and in Bihar it was 11 days (Rs 2,000). These are not amounts that households can survive an entire year on. Ninety-five per cent of registered homes did not receive the full 100 days of work last year.

That is the condition that we find ourselves in today. The other thing that the CEDA survey revealed is that the youth, not being able to find permanent employment elsewhere, are now seeking MNREGA jobs. From 20 per cent of the age group 18-30 looking for MNREGA work in 2018, the figure has almost doubled to 37 per cent.

The government’s own data says that the number of Indians aged 15 and above who are working or looking for work is 40 per cent of the workforce. This number is over 60 per cent in the United States, closer to 70 per cent in Thailand and Indonesia and over 70 per cent in China. India’s work participation rate is lower than Pakistan and Bangladesh. Are Indians lazy? No, there are no jobs.

The Centre for Monitoring the Indian Economy says that in In 2016 42 per cent of India's working age population was employed. This fell to 41 per cent in 2017, then 40 per cent in 2018-19, then 39 per cent in 2019 and it is now 36 per cent. The total number of Indians who are working today is less than five years ago though the population has grown by seven crore people.

The problem is not one that will go away and as we have seen the numbers are getting progressively worse. The impact that this is having and has already had has not been fully examined because the politics of our country is focused on other things. India has always been a poor nation where the majority suffers silently while a tiny set of people do well. Things today may not appear to be very different from the way they were a thousand years ago. The question is, will the majority silently suffering remain the case at a time when inequality is visible to the extent that it is today? If the answer to that question is no, then it’s vital that as a nation we discuss the problem and not wait for it to explode.