Nrega Demand Spikes

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May 12, 2021
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The number of people demanding work under NREGA doubled YoY in April-2021, the sharpest growth since Feb-2016. However work provided under NREGA has not kept pace with this growth in demand. Work provided in terms of Man-days grew 67% YoY in April this year. 

To some extent both Demand for work and Work provided are impacted due to the low base of last year - April 2020 being the month that saw full hard lockdown throughout the country. Consequently both number of people demanding work under NREGA had declined 35% YoY in April 2020 while work provided had declined 48% in April 2020. 

That said, it is worth noting that compared to April-2019, number of people demanding work in April-2021 is up 30% while work provided under NREGA is actually down almost 14%. Not surprisingly the average man-days of work provided under NREGA in April at 5.9 days is the lowest since in the last several years. Indeed in 5 out of the last 6 months, growth in people demanding work has outpaced the man-days of work provided under NREGA.

NREGA is supposed to be an important counter-cyclical buffer for rural households. Demand for work under NREGA increases when other opportunities decrease (like during May-October last year). It is thus a proxy for rural distress. Government is supposed to step in and provide work to alleviate this distress. That work under NREGA has not kept pace with demand is worrying. This is either a reflection of budgetary constraints or more recently a reflection of the recent surge in Covid cases.


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