1 Introduction

In rural areas, major livelihood activities are irregular mainly due to seasonal fluctuations in agriculture and allied activities. This leads to periodic withdrawal from labour force, especially by the marginal labourers, who shift back and forth between what is reported as domestic and gainful work. Many workers migrate to other parts of the country in search of work. Lack of alternate livelihoods and skill development are the primary causes of migration from rural areas.

Due to COVID-19 pandemic, India is facing a severe challenge of unemployment and reverse migration (Fig. 1). Migrant workers are heading back to their native places in the hope of sustaining themselves better than they would be able to manage in hostile living conditions in host locations with limited work opportunities. Most migrant workers are daily-wage earners, and absence of work for extended periods makes it difficult to afford high cost of living in urban areas. Added to this is the uncertainty around the timelines for normalization of the current situation.

Fig. 1
figure 1

Unemployment rate (in %)

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Mahatma Gandhi National Rural Employment Guarantee Act (referred to as MGNREGAFootnote 1 hereafter) was introduced by Government of India in 2005 to target causes of chronic poverty through the ‘works’ (projects) that are undertaken, and thus ensuring sustainable development for all. MGNREGA is the largest work guarantee programme in the world with the primary objective of guaranteeing 100 days of wage employment per year to rural households. The programme emphasizes on strengthening the process of decentralization by giving a significant role to Panchayati Raj Institutions (PRIs) in planning and implementing these works.

This paper critically evaluates the suitability of MGNREGA in its current form as a panacea for alleviating stress in rural India. The key question we discuss here is whether MGNREGA can provide meaningful work in the post-COVID-19 world, how more employment could be generated with the same effective spending and reliance on projects under MGNREGA be reduced going forward.

2 Key Features of MGNREGA

The focus of the scheme is on rural employment and asset creation. A total of 100 days of work is guaranteed per household with the budget shared in 90:10 ratio by Centre and States. The daily wage has recently been increased to Rs. 202 by the Centre although there is significant interstate variation in the wages paid (increased wage rates effective from 01 April, 2020 and notified on 23 March, 2020). In many cases, the scheme wage rates are lower than the minimum wages in respective states. Spending under MGNREGA projects is mandated to be at least 60% on wages to unskilled labour with the remaining 40% for semi-skilled/skilled labour and material. However, there are exceptions to this. One of the prominent examples is construction of toilets. The scheme is implemented via Gram Panchayats. The Centre’s focus is on ‘convergence’ with spending on other major schemes. Convergence in this context implies that where possible, the objective of jobs and asset creation under MGNREGA is be achieved in alignment with the schemes rolled out by other departments. MGNREGA funds cannot be used for other schemes, but the reverse is what convergence aims to promote. More than 260 projects are permissible under MGNREGA and classified into four main categories, namely: public works relating to natural resources management, individual assets for vulnerable sections, common infrastructure for Deendayal Antyodaya Yojana–National Rural Livelihoods Mission (DAY-NRLM) compliant self-help groups, and rural infrastructure.

Total FY19-20 spending by the Centre was Rs. 71,000 crores, while the original budget for FY21 was Rs. 61,500 crores. In the wake of Covid-19-related reverse migration, the Centre has recently enhanced this amount by Rs. 40,000 crores. In the financial year 2019–2020, approximately 13 crore workers availed of work under the scheme.

MGNREGA is also one of the focus areas in the Centre’s recently announced Rs. 20 lakh crore stimulus package. However, as we discuss in the following sections, this would not be enough to provide meaningful employment to the large number of returnee migrants, and a meaningful reorientation of spending can help create a pool of micro-entrepreneurs in short time. With a possibility of reasonable income-generating opportunities outside MGNREGA-related works, this pool is expected to have lower dependence on government spending in future.

3 MNREGA-Spending Profile and Issues

A study by Institute of Social and Economic Change (ISEC 2013) of projects between FY07 and FY13 under MGNREGA reveals the following top categories: Rural connectivity (40%), Water conservation (17%), Land development (12%), Renovation of water bodies (11%), Flood control (8%), Micro-irrigation works (5%), Provision of irrigation facility (2%), Drought proofing (2%) and Other activities, as approved by Ministry of Rural Development, (4%).

However, as with schemes of this scale and nature, work completion rates under MGNREGA have been low at least for the period under consideration (Table 1). Besides other factors such as time taken for completing documentation and abandonment of non-feasible projects, this also demonstrates the need for better project management and execution skills. The following is an extract (Section 1.54) from the 42nd Report of the Standing Committee on Rural Development (2012–2013) presented to the 15th Lok Sabha.

Table 1 Annual work completion rate (in %).
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“The Working Group on MGNREGA have also mentioned that findings related to quality, durability and rate of work completion suggest that the problem is not in the design of the Act but the usefulness of the Scheme is dependent on the strength of its implementation at the field level. For instance, lack of planning in areas like potential demand and need for MGNREGA works, participation of villagers and prioritization of works in the Gram Sabha (GS), and focus on creation of productive assets based on principles of watershed, etc., can greatly reduce the development potential of MGNREGA. Taking up of planned works, relevant to the need of the region and demand of the beneficiaries is also vital for ensuring ownership of assets and their development utility in the long run.”

4 Profile of Returning Migrants

The most distressed section of migrants is what has been termed in the literature as vulnerable circular migrants (Srivastava 2020). These include both short-term seasonal and long-term (semi-permanent) occupationally vulnerable workers. Srivastava (2020) has estimated that there were approximately 5.9 crore short-duration circular migrant workers in 2017–2018. Of these 5.9 crore, about 5.1 crore were engaged in non-agriculture work, 4.4 crore were in urban areas, and 2.8 crore were working in other states (2.4 crore of out of 2.8 crore in urban locations). In the same study, the number of vulnerable long-term circular migrant workers has been estimated at 6.9 crores in 2018. Putting together the numbers of short-term seasonal/circular and long-term occupationally vulnerable workers gives us about 12.8 crore workers whose livelihoods may have been adversely impacted with the onset of COVID19. About 11.1 crore (4.4 crores short-term above and 6.7 crores long-term) of these 12.8 crore migrants were estimated to be a part of the workforce in urban India—the epicentre of COVID19 in India. A little less than half of these 11.1 crore workers—5.2 crores—were interstate migrant workers in 2018.

Based on 2007–2008 NSS data used in Srivastava (2020), states that primarily contribute to short-duration out-migration for employment are Bihar (31.5%), Uttar Pradesh (19%) and West Bengal (10%), Madhya Pradesh (7.8%), Jharkhand (6.7%) and Rajasthan (5.5%). These states also had the highest shares in interstate out-migrants reflecting their low levels of income. Uttar Pradesh and Bihar also have more than 50% share in long-term out-migration.

The task force on eliminating poverty constituted by Niti Aayog in 2015 (Occasional Paper 2016) has noted that, on average, most beneficiaries under MGNREGS have been able to avail of only 50 days of work and recommends better targeting of the scheme to ensure the poorest of the poor get the promised 100 days of work opportunity. If 50–60% of 11.1 crores migrant workers in urban India (including the 5.2 crores interstate workers in 2018 above) return to their home destinations, the scheme has to accommodate between 5.5 and 6.6 crores new workers. This will add roughly 40–50% to the pool of existing workers, and the current employment situation in the country will also force inactive users to demand employment under MGNREGA. The incremental allocation (over last year’s actuals) is about Rs. 30,000 crores. Considering these numbers, the average availability of work per person will reduce further below 50 days and is inadequate in addressing the challenges facing rural India.

This reverse migration has altered the labour market’s demand and supply dynamics significantly. Areas that previously had negative net migration rates are now expected to be labour surplus. Locations that were attractive for labour to migrate to, will find it difficult to attract and retain labour. What this essentially means is that locations that were hitherto the biggest sources of migrant workers will have an excess supply of unskilled/semi-skilled labour available to work at low reservation wages. Given the continued requirements around social distancing, we expect movement of people to be somewhat restricted and a more-or-less closed labour market in the foreseeable future. This will mean that some portion (~ 10–15%Footnote 2) of migrants will stay back in their villages and not return to the places of work soon. On the other hand, COVID-19 has demonstrated the gaps in India’s health and sanitisation infrastructure. In addition, sanitisation has assumed unprecedented importance in our lives, in both rural and urban India. Rural India can benefit from effectively utilising this surplus labour in augmenting its health and sanitization infrastructure.

Table 2 shows that 17 top districts account for 25% of all male migrants. The next 25% is spread over the 36 districts shown against numbers 18 to 53. These are the areas that need intervention on an urgent basis.

Table 2 Districts accounting for major part male interstate out-migration.
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Early/incomplete data collected by the Office of Relief Commissioner, Government of Uttar Pradesh,Footnote 3 in Table 3 suggest 50% of returning migrants are unskilled.

Table 3 Reverse migrants in Uttar Pradesh between 1st and 15th May
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5 Putting Migrants to Work in Rural India

5.1 Immediate Challenges Governments are Facing Today

Governments, both at the Centre and in States, are facing several challenges today. At the top of the list is rehabilitation of returning migrants including provision of quarantine facilities, COVID screening, essential supplies, etc. Equally critical is to immediately provide these workers income-earning opportunities, especially to seasonal migrants who are unlikely to migrate for work soon. At the very least, they are not expected to return with families leaving behind 1–3 adults in the village.

On health and sanitisation fronts, adequate health facilities including those for mental health are required given the large number of people back in villages now and most having returned after long period of hardships and joblessness. Sanitisation needs to be ensured as per new requirements, and necessary steps need to be taken at local levels to ensure there is no spread of infection in rural areas.

In addition, restoration of public and private property post-cyclone Amphan-related destruction is also an important focus area for governments in West Bengal and Odisha.

5.2 What Type of Work or Infrastructure is Priority Today?

  1. A.

    Sanitisation of public and private assets. It must be noted that sanitisation is to be seen as something distinct from regular cleaning work.

Overall, public places such as schools, anganwadis, health centres, common areas, shops, community assets such as panchayat office, post office, police chowki, cooperative society offices and bank branches where a lot of people come in contact with each other need effective sanitisation. The new physical distancing norms also necessitate construction of individual toilets versus community toilets in order to abate spread of communicable diseases. While unavoidable where common services are provided (e.g. bus stands, train station), common toilets in residential areas are not very effective in disease prevention. The Jal Jeevan Mission which aims to provide piped water to every household needs to be fast tracked by reaching more and more households at the earliest.

  1. B.

    Health facilities including primary health centres and hospitals.

With respect to health-related aspects, additional construction is required particularly to attend to critical services like maternal labour rooms which are being currently doubled up as isolation wards. Similarly, non-COVID-related medical services which have been side-lined for lack of space and resources need augmenting including construction of adequate physical space and healthcare workers. It is well documentedFootnote 4 that the returning Indian soldiers from World War I carried H1N1 influenza to the rest of the country ultimately resulting in the death of 1.8 crore Indians. The current reverse migration from cities (the epicentres of COVID-19) to rural areas has potential for the wider spread of disease in rural areas which have far inferior medical facilities and preparedness than urban India. Temporary structures to host screening, testing and quarantine facilities for these migrant workers need immediate work.

  1. C.

    Frequency of cleaning (and sanitisation) work needs to be far more than that in the pre-COVID world.

  2. D.

    Storage for agriculture produce: creation of small warehouses at the village level for storage of produce. There is a well-documented shortage of storage space in India (OECD 2018). It is estimated that lack of storage facilities depresses the realised price as well as results in direct wastage of 1–2% of physical output (4–6% in overall supply chain).

  3. E.

    Restoration of public and private property post-cyclone Amphan-related destruction.

5.3 What are the Current Provisions/Operational Guidelines?

The table below is based on MGNREGA Operational Guidelines (2013). It shows the chain of stakeholders under MGNREGA at the ground level, other than the ultimate beneficiary, i.e. the workers.

 

Who

Main task

Focus

1

Gram Panchayat (GP)

Decides what works need to be undertaken

Scheme implementation at village level

2

Gram Rozgar Sahayak

Assists GP

3

Mates (or mistris)

Supervise worksites/group of workers

At least 1 per 100 workers

Paid the wages of skilled labour

Project-specific execution within time and quality specifications

4

Panchayat Development Officer (PDO)

Assist GP in planning MGNREGA works

Several projects

5

JE (Works)

Technical supervision of projects

Several projects

At higher levels, i.e. at block and district level, there are other stakeholders such as the Cluster Facilitation Team, Intermediate Panchayat, Programme Officer, Technical Assistant, Block Resource Centre, District Panchayat, District Programme Coordinator, Civil Society Organisations, Self-help Groups and Central and State Governments.

5.4 What Changes Need to be Made to Facilitate the Above-Mentioned works?

We propose the following changes to the existing MGNREGA guidelines.

  1. 1.

    A new category of works without any physical asset creation as such needs to be approved.

  2. 2.

    Funding from MGNREGA for paying wages to sanitization and hygiene workers.

  3. 3.

    A new category of Fair Practice Contractors (FPC) for sanitisation and hygiene works. These will be labour and material contractors. There are not any as of now for sanitisation and hygiene-related works. These FPC will be different from the existing mates or mistris as they would need to quickly acquire skills in short time that were, in the pre-COVID times, acquired over a period of time with experience. Mates or mistris are experts for overseeing work assigned to their group of workers ~ 100 in each group.

  4. 4.

    Sanitisation as a concept is new, so trained manpower is necessary. Sanitisation and hygiene workers (different from those currently involved in cleaning jobs) will drive sanitization efforts across the GP. Both the FPC and sanitisation workers will be collectively called Sanitisation and Hygiene Entrepreneurs (SHE).

  5. 5.

    Involvement of private sector organizations or civil society organizations in bringing in the project management expertise with respect to quickly mobilising, skilling and maintaining a pool of sanitisation and hygiene workers for GP level works as well as in matching workers to work outside MGNREGA projects. We represent these Project Management Consultants as PMCs hereafter in the note.

5.5 Where Can the Funding for Executing These Works and Generating Rural Employment Come From?

Under MGNREGA, 6% of total expenditure can be on administrative expenses. Of this, 50% needs to be utilised at the GP level. These funds can be utilised on the skilling of SHE. As we show later in this note, just this portion of funds will not be enough and governments need to make more funding available through other components of MGNREGA and other schemes.

5.6 What Needs to be Done to Make Changes?

States need to propose changes to be made in the scheme to Centre given there will be no asset creation and the work is of regular nature.

The proposal needs to include the following: justification for the work, areas where the work will be undertaken, number of wage seekers to be employed (employment potential), nature of durable asset to be created, expectations from the work to strengthen the livelihood base of the rural poor, other benefits that may accrue such as continued employment opportunities, strengthening of the local economy and improving the quality of lives of people.

The model project should contain the following: unit cost of the work, the split between labour and material component and between skilled and semi-skilled component, transparency and accountability mechanisms, expected final outcome (asset that will be created), benefit to the livelihood base of the rural poor and any other benefit likely to accrue.

5.7 Our Proposal for Action

What we propose is to build a pool of micro-entrepreneurs involved in:

  1. 1.

    Sanitisation and hygiene activities

  2. 2.

    Infrastructure development/rehabilitation projects

Gram Panchayats (GP) could use these mainly Sanitisation and Health Entrepreneurs (SHE) to take care of sanitisation and hygiene needs with respect to public and private assets under the new normal. Work guarantee under MGNREGA could act as a floor for basic sustenance, and a one-time government subsidy for training and buying equipment could get a large number of these workers take the first steps towards sustainable self-employment. These SHE need not restrict themselves to work allocated by GP and could also take on private work related to health and sanitisation.

However, on their own, workers lack information on how to go about providing these services. On the other side, GP will find it difficult to get hold of such service providers who are trained. GP will want this at the lowest possible costs which can be provided by someone who is locally based and whose services can also be used on an ad hoc basis. It is in this context that private sector organizations with experience in project management of large-scale interventions can be roped in. Experience of private sector organisations that have engaged considerably with the Panchayati Raj department and understand the skills and rural space quite well will be useful. Given their project management experience, these institutions can monitor quality of the work, train workers to improve their skills and ensure quality assurance to the villages.

Support needs to be provided on an urgent basis to masons, plumbers, electricians and painters—a large category of returnees to rural India in the current situation. This support comes not only in the form of capacity building via professionalisation of skills but also as forward and backward market linkages, business skills, compliance and support in obtaining loans from the formal financial system to ensure an increased income to these micro-contractors. Details of specific MGNREGA works/tasks that these workers can be involved in are provided in “Appendix”.

5.8 Proposed Role of Project Management Consultants (PMCs)

These project management consultants can act as a platform assisting and working with the Gram Panchayats on the one hand and service providers/contractors/workers on the other. They must have the necessary skills to train and create a talent pool of Fair Practice Contractors (FPC) who can work on creating new as well as disinfecting existing common infrastructure at the village level and also private assets. They should also maintain a database through their skilling initiatives of a pool of trained workers to draw on. These SHE (workers as well as the FPCs) come with a stamp of quality from the PMC on the basis of its training, mentoring and monitoring interventions. This is not the case currently even though Gram Panchayats have been allocating work to contractors. PMC will assist the GPs to assess their works requirement (for infrastructure build-up as well as for embedding sanitisation-related measures) and create the project requirement documents. From the talent pool of contractors and workers, PMC will screen and choose micro-entrepreneurs, facilitate the contract process and monitor the work done by them to ensure quality output. PMC will monitor the quality of work, using photographic evidence. Given the new requirements around sanitization needs, GPs may not be equipped to handle this on their own.

At the moment, contractors and workers mainly learn on the job. In our experience, they are not aware of the most efficient ways of working and organizing their services business. PMC can use technologyFootnote 5 to bring the service providers and the customers (GPs) together in an efficient manner. PMC must be equipped to conduct online training for contractors/workers and also create a portal for GPs which will have a template for them to assess the requirement and create a ‘project document’ and process contract.

For the SHE, only a part of their overall business needs to come from GPs as discussed above. Through extensive training on different aspects related to running a small business, PMC’s intervention can empower them with the necessary skills and infrastructure to expand private income-enhancing opportunities. Once self-sufficient and connected with a pool of available workers facilitated by the PMC’s technology platform, SHE can look at opportunities outside their own villages for expansion and over a short period of time lessen their dependence on work opportunities funded under MGNREGA.

From the point of view of supporting economic activity, another concept that merits attention is that of Common Service Centres (CSC). These CSC aimed at shortening the end-to-end value chains are already being piloted by organisations such as Selco Foundation in Bengaluru. CSC involve establishment of infrastructure (physical and digital, in sizes and prices that are affordable) and systems (standard operating procedures, efficient use of technology) in a manner that can respond to local needs and be a catalyst for economic activities in a local area. Some of the common services these CSC can provide include: tailoring centres, mechanic shops, local provision stores with refrigeration for perishable consumables, agriculture-related storage infrastructure and equipment. These CSC can also be used as telemedicine centres for first level testing and care in the fight against COVID-19 at the village level. Depending on the predominant livelihood in the region, agriculture processing or value-add facilities can be developed. The facilities could be government or cooperative owned, but run on revenue-based model-providing cold storage facilities for horticulture produce, milk chilling, agriculture processing, or food processing units.

In summary, what the above examples demonstrate is that it is possible to reduce reliance on public funding beyond the initial grant and create an avenue for further job creation in rural areas without putting undue strain on public finances.

5.9 Income Earning Capacity of SHE and Others Involved in Infrastructure Works

Given the huge requirement for sanitisation, we expect sanitisation workers to earn at least Rs. 11,000–15,000 a month on a sustainable basis without necessarily relying on public funds after the first 100 days of work under MGNREGA. As shown in the table below, based on our assumptions, spending of Rs. 17,088 crores (including Rs. 4428 crores one-time) will be required to train, endow with initial start-up material and employ a new breed of Sanitization and Hygiene Entrepreneurs as well as plumbers, electricians, masons and telemedicine workers in 60,000 villages across the country for a period of 100 days. After this time, these workers should be in a strong position to take on private work in rural as well as in urban areas and earn far more than the subsistence wages under MGNREGA.

Total villages (target)

60,000

     

Per village metrics

SHE-Mistri

SHE-Worker

Plumber

Electrician

Mason

Healthcare (Telemedicine)

Number to be trained

1

100

1

1

1

1

Daily wage (Rs.)

300

200

200

200

200

200

Cost per start-up kit (Rs.)

10,000

7000

7000

7000

7000

7000

Number of days of work (initial)

100

100

100

100

100

100

One-time start-up investment

10,000

700,000

7000

7000

7000

7000

Total wage bill (100 days)

30,000

2,000,000

20,000

20,000

20,000

20,000

Budget (one-time)-Rs.

44,280,000,000

     

Budget (wages for 100 days)-Rs.

126,600,000,000

     

Total budget-Rs.

170,880,000,000

     
  1. The above table does not include material costs for sanitization works

The training would be done by appointed PMCs who would develop an ecosystem for sanitization services and connect these workers with work in rural and urban areas on an ongoing basis.

6 Conclusion and Way Forward

This paper has attempted to quantify the scale of reverse migration India is witnessing in the current times and the action needed to make MGNREGA spending more effective. We also analysed the profile of these migrants and which areas people are migrating back to. The scale of reverse migration and the lack of opportunities in rural India despite enhancements in fund allocation to MGNREGA point to a grim situation. Projects under MGNREGA have had limited completion rate in the past, and the scheme overall has been inadequate in providing the assured minimum days of work to those who need it the most. In the new normal, healthcare, sanitisation and hygiene will have a priority focus. A project management discipline, connecting labour to work opportunities and vice versa and the need for micro-self-employment is the need of the hour. More can be achieved with the same level of public finances if people are connected to and shown the way to private income enhancement opportunities.