Rural employment scheme job creation fell by 50% in July

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New Delhi: Labor generated under the National Rural Employment Guarantee scheme fell by almost half in July month-on-month, due to an increase in agricultural and non-agricultural activities that employed workers and a slowdown in return migration .

Prior to July’s steep decline, the work generated by it had increased sequentially for each of the first three months of the current fiscal year.

Preliminary data from August 15 showed 222 million person working days for July 2022, compared with 422.1 million in June, a decrease of 47.3%. The number of households benefiting from the program was 17.1 million compared to 27.5 million in June, down 37.8%.

The generated person working days were 285.9 million in April (benefiting 18.6 million households) and 435.3 million in May (26.1 million households).

Numbers so far this fiscal year are above pre-pandemic levels, although the gap is narrowing month-on-month. In July 2019, i.e. before the pandemic, these were 193.2 million person working days and 14.9 million households.

The decline in the number over the past month was largely due to a pick-up in farming activity as demand for kharif-cultivating labor has skyrocketed. A surge in demand for public works labor in rural areas and the return of most workers to industrial cities with a near end to the return migration seen during the peak of the pandemic also meant fewer people sought work under the scheme .

“The revival in economic activity seems to have stabilized the labor market,” said labor expert KR Shyam Sundar. “However, the lack of consistency in industrial production and the weakening of the rupee may affect manufacturing output, which in turn could impact the labor market,” Sundar added.

The drop in job creation is consistent with a drop in demand for work under the scheme and also confirms a significant drop in the unemployment rate in rural India.

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