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Centre’s cash transfer and welfare schemes may miss their mark

Rural India was already under stress with delayed wage payments and lower incomes, while budgetary allocations for the country’s flagship Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme in recent years appear to not have increased adequately.

, ET Bureau|
Last Updated: Apr 09, 2020, 08.32 PM IST
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Rural India was already under stress with delayed wage payments and lower incomes.
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KOLKATA: Below-par performance of a guaranteed jobs program, consistently low crop prices and a slowdown in construction that employs surplus farm hands may combine to dent the positive impact of the Centre’s cash transfer and targeted welfare schemes for rural wage earners, for whom the impact of the Covid-19- induced lockdown could be rather acute.

“The recent outbreak of Covid-19 and the subsequent lockdown enforced in the country are expected to bring down the aggregate demand drastically, both in rural and urban areas,” Reserve Bank of India (RBI) said Thursday. “Unusually lower agriculture prices, slowdown in the construction sector and below average performance of the MGNREGA programme have contributed to lower farm incomes, deceleration in rural wages and loss of employment opportunities in the rural sector and, more so, in the wake of Covid-19.”

Rural India was already under stress with delayed wage payments and lower incomes, while budgetary allocations for the country’s flagship Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme in recent years appear to not have increased adequately.

The government has raised the daily wage under MGNREGA to Rs 202 from 182, but it is way less than the proposed wages of Rs 342-447 per day for unskilled workers, depending on the region of employment.

The Labour Force Survey report of May last year shows that rural wages under MGNREGA for men are 74 percent lower than the market wage rate for non-public work while it was 21 percent lower for rural women.

Suspension of the rural job guarantee scheme by several states after the lockdown appears to have compounded the problem.
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