Demand for MGNEGS work rises in April-May, signalling strain in rural India
New Delhi: Demand for unskilled work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) surged in April and May, indicating renewed economic strain in rural India and fragile livelihoods.
According to the latest data from the ministry of rural development, 20.12 million rural households sought employment under the scheme in April, rising slightly to 20.37 million in May (as of 18 May). This follows a dip to 18.64 million in March.
MGNREGS, the central government's flagship scheme providing a rural safety net, guarantees up to 100 days of unskilled manual labour to any adult member of a rural household who seeks employment.
Historically, demand for work under the scheme rises when farm or non-farm job opportunities shrink.
MGNREGS demand for fiscal year 2025 (FY25) peaked in May last year, when 27.18 million households sought employment, before gradually easing through the rest of the fiscal year, particularly in the final quarter.
Notably, year-on-year comparisons suggest a softer start to FY26, though rising compared with the final quarter of FY25.
Also read | Parliamentary panel calls for revising wage rates of MGNREGS workers
The difference between the 20.37 million households demanding work so far this May (till 18 May) and the 27.18 million job-seeking households in the same month last year may reflect seasonal shifts as well as early economic undercurrents.
The latest data also comes against the backdrop of robust rural consumption underpinning India's gross domestic product (GDP) growth of 6.2% in the third quarter (Q3) of FY25.
However, the renewed uptick in MGNREGS demand at the start of FY26 could point to slowing momentum and emerging vulnerabilities in rural demand.
Over the past financial year, monthly work demand under MGNREGS has fluctuated, declining to a low of 16.02 million in September from the 27.18 million peak in May, before rising again towards the end of the year.
However, during FY26, a timely and well-distributed monsoon, as expected by the government, could offer much-needed relief by boosting farm activity, easing rural distress and tempering demand for MGNREGS jobs.
Spokespersons for the ministries of finance and rural development did not respond to emailed queries seeking comment.
Economists believe the recent rise in demand for work under MGNREGS may be partly driven by seasonal factors.
'Job demand under MGNREGS typically increases during lean periods when agricultural and construction activity slows down. April and May are not peak sowing months, which could explain the higher demand for work under the scheme during this period," said Bhanumurthy N.R., director at the Madras School of Economics.
He noted that the decline in demand during the January-March quarter likely reflects a seasonal shift in labour patterns.
'Many rural workers might have migrated to urban areas for work or construction sites during that time, leading to a temporary fall in MGNREGS participation," he added.
Also read | Centre to hold FY26 fiscal deficit at 4.4% despite global headwinds, Pakistan tensions
Interestingly, the Centre has kept allocations under the scheme unchanged from the last fiscal, at ₹86,000 crore, for the financial year 2025-26.
A senior official told Mint that the Centre will review its accounts around September-October, midway through the fiscal year, to assess whether certain schemes require additional funding.
'If needed, allocations for MGNREGS could be revised—but only after the half-yearly review and based on the scheme's funding requirements," said the official, who didn't want to be named.
Slowing growth
India's economic growth has moderated in recent quarters, weighed down by a mix of domestic and global factors.
While GDP growth showed signs of recovery in the December quarter—rebounding from a near two-year low in September—it grew at 6.2%, the slowest pace since Q4 FY23 (excluding the revised 5.6% in Q2, up from an earlier estimate of 5.4%).
With data for the March quarter due later this month, the economy will need to grow by 7.6% in Q4 to meet the National Statistical Office's full-year growth target of 6.5%. Even if achieved, FY25's GDP growth would fall well short of last fiscal's revised 9.2% expansion.
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