How some states reined in unemployment

When nearly all economic activity came to a standstill from March to May, unemployment went down in Odisha. It did so in Tripura and Uttarakhand as well. Odisha saw its workers return. Unemployment should have gone up. Tripura and Uttarakhand do not have industrial setups that could lose migrant workers.
So what did they do right? Since the shifts in worker base were from urban to rural areas, implementation of rural job schemes seems to be the key. “MGNREGA may be one of the reasons for the low unemployment rate in some states,” said economist Dr Sou
mya Kanti Ghosh.
“Though in April only 57% of the projected person days had been generated, in some states — like Andhra, Chhattisgarh, Odisha, Telangana, West Bengal — the ratio is quite high, indicating the effectiveness of MGNREGA in those states.”
Barring Telangana, all these states saw unemployment dip or stay stable from March to May, according to CMIE data. Tripura saw the sharpest unemployment dip, from 29.9% in March to 15.3% in May. It managed to provide work to 85% of its MGNREGS applicants. Its economy has always relied on agriculture and allied activities, which took a hit in April, the harvest season. “But in May, agricultural activities, brick kilns, tea gardens and small trading activity resumed.
Many moved to fishing and poultry farming, which worked well,” a labour official said. In states where migrant workers are returning, and heading for rural areas, too, MGNREGS implementation seems to have made a difference. In Odisha, where unemployment went up from 13.1% in March to 23.8% in April, the rate significantly declined to 9.6% in May.
About 5 lakh migrant workers have returned to the state. “More than 14.5 lakh have been engaged under MGNREGS every day between April and May,” said Rajesh Patil, director of special projects in the Odisha panchayati raj department. In contrast, Jharkhand, where unemployment went up from 8.2% in March to 47.1% in April and further to 59.2% in May, labour engagement schemes have not taken off.
A halt in construction, transport and trade rendered workers in informal sectors jobless,” said Harishwar Dayal, a Jharkhand-based economist. The places the migrant workers left behind saw unemployment dip from April to May. The workforce exodus in Tamil Nadu, which saw the second highest dip in unemployment from April to May (from 49.8% to 33%), drove the numbers down after a sharp spike (from 6.4% in March).