Hike in MGNREGS funds if poor monsoon leads to higher job demand

Jairam Ramesh asked all States to prepare for the effect of the poor rains

As the monsoon rains continue to play truant over much of the country, concerns about the fate of India’s rain-fed agricultural sector this year means that lakhs of farm labourers could be forced to look for other options. Anticipating an increase in demand for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) jobs this season, the Centre has indicated its willingness to sanction additional funds – to the tune of an extra 25 per cent – for the scheme.

As the first month of the monsoon season draws to an end, 74 per cent of the country has received deficient or scanty rainfall, with the exceptions lying in the flood-hit north-east. All-India figures show a 25 per cent deficiency in comparison to the norm so far. Despite the weatherman’s prediction of a recovery next month, the farm economy could suffer.

In a letter to all Chief Ministers on Friday, Rural Development Minister Jairam Ramesh asked all States to prepare for the effect of the poor rains on the MGNREGS demand. “The Ministry would be open to revision in the labour budget for current year required to meet this increased demand [for employment due to lower rainfall],” said the letter. “I also wish to assure you that funds are not a constraint under the MGNREGS. Adequate funds have been released to the State authorities and subject to submission of utilisation certificates, additional funds can be released.”

Mr. Ramesh asked all the States to draw up contingency plans to meet the expected increase in demand, given that some parts of the country have received much lower rainfall than expected in the month of June. In fact, north-western India has been the worst-hit so far, facing 65 per cent deficiency, followed by 36 percent in central India and 29 per cent in the southern peninsula.

The experience of the last five years backs up the need for a contingency plan. The last time that the southwest monsoon failed to deliver was in 2009, when the all-India deficiency was 22 per cent. That year, 73 lakh more households demanded employment under the MGNREGS, in comparison to the previous year, which had a normal monsoon with 98 per cent of usual rainfall.

In terms of person-days of employment, the financial year 2009-10, which included the 2009 monsoon season, saw a 30 per cent jump. That year, the scheme provided 283 crore person-days of labour, in comparison to just 216 crore the previous year – a total increase of 67 crore.

During the next two years of bountiful monsoons – with 102 per cent of average rainfall – the MGNREGS person-days dropped once again, to 257 crore and 214 crore respectively.

“Going by the 2009 experience, we could see a 20 to 25 per cent hike in demand this year as well, depending on how the monsoon performs in the next two months,” Mr. Ramesh told The Hindu . “We are prepared to sanction additional funds for that increase.”