Demand for MGNREGA work drops in monsoon deficit states by 35% in July

In the eastern states where monsoon is in deficit, work demand has also fallen barring Jharkhand, which has seen a 12.38% spike in households demanding work under MGNREGA in July

The demand for Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) work has dropped by almost 35 per cent in July 2022 compared with the same period last year due to heavy monsoon rains over several parts of the country and a pick-up in the kharif sowing activities.

Delay in payment of wages in some states such as West Bengal and improvement in economic activities could have also contributed to the demand drop.

Interestingly, in the eastern states where monsoon is in deficit, work demand has also fallen barring Jharkhand, which has seen a 12.38 per cent spike in households demanding work under MGNREGA in July.

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The cumulative monsoon deficit in Jharkhand stood at 26 per cent as of August 21, where 17 out of 24 districts are seeing a shortfall in rains.

July is usually considered a lean month for MGNREGA work because worksites get impacted by heavy monsoon rains. However, in July 2022 around 20.43 million households sought work under the scheme, which is higher than any of the comparative pre-pandemic period, the official website shows.

This shows that a disproportionate number of agricultural labour is still looking for work under the scheme in rural areas.

On a month-on-month basis, there is a 36 per cent fall in MGNREGA demand between June 2022 and July 2022.

The latest CMIE data corroborates the drop. It showed that agriculture absorbed 9.4 million people in July, and it shed 8 million in June.

In April 2022, around 23.26 million households demanded work under MGNREGA scheme, which rose to 30.74 million in May which dropped slightly to 31.67 million and further fell to 20.43 million in July 2022.

In June, India received almost 8 per cent below normal rains, which jumped to 17 per cent above normal in July.

Since half of India's farmland doesn't have irrigation, the monsoon accounts for about 75 per cent of India's annual rainfall.

A state-wise breakup of the MGNREGA work demand in July 2022 as compared to June 2022 shows that agriculturally prominent states saw a drop in significant drop in demand for work. West Bengal saw a 73.28 per cent drop in work demand, followed by a 49 per cent drop in Bihar, 13.42 per cent in UP, Chhattisgarh at 71 per cent, Odisha at 33.34 per cent, Telangana at 65.35 per cent, Gujarat at 89 per cent less and Maharashtra around 50 per cent fewer households demanded work under MGNREGA in July as compared to June 2022.

Kharif sowing and monsoons

The area under the paddy, the main foodgrain grown during the kharif season, was almost 8.25 per cent less than in the same period during the week ending August 18, 2022.

This was an improvement from the almost 15 per cent shortfall in the previous week, the latest data from the agriculture ministry showed.

The deficit in paddy acreage has narrowed down in UP, Bihar and West Bengal between the week ended August 12 and the week ended August 18 due to some revival in rains, the data reflected.

Still, as compared to last year, paddy acreage was down by almost 0.34 million hectares in Bihar, 1.14 million hectares in Jharkhand, 0.63 million hectares in West Bengal, and 0.27 million hectares in Uttar Pradesh.

Though the deficit in paddy acreage has narrowed down last week, due to a resurgence in monsoon rains over Jharkhand and West Bengal, doubts remain over the final harvest due to inordinate delay in sowing.

This has fueled talk of around 10-15 million tonnes drop in rice production in the current kharif season. In the previous kharif season, India produced over 111 million tonnes of rice.

In several states, farmers have already moved on to other short-duration crops such as pulses and coarse cereals abandoning paddy

According to the India Meteorological Department (IMD), between June 1 to August 21, cumulatively across the country the southwest monsoon has been around 8 per cent more than normal, but major paddy-growing states have seen less than normal rainfall. Uttar Pradesh received 44 per cent less than normal rainfall, showers in West Bengal were 18 per cent less, Jharkhand saw 26 per cent less, and Bihar had a 40 per cent deficit.

While, in Telangana, which is another major paddy-growing state, crops have been damaged due to excess rains (62 per cent more than normal).

The drop in the area of paddy has also triggered fears of the government clamping down on rice exports as it did in the case of wheat in May. The only saving grace is that, unlike wheat, central pool stocks of rice are adequate.

India, the world's second-largest producer and top exporter of rice, commands a 40 per cent share in the global rice trade. It exported 21.2 million tonnes of rice in the 2021-22 fiscal year, of which 3.94 million tonnes was basmati rice.