Increasing the number of workdays under the government’s flagship jobs scheme would be one of the most effective ways to help the poor recover from the COVID-19 pandemic’s negative impact on the economy, Nobel laureate Abhijit Banerjee told NDTV.
“That (transferring large amount of cash to the poor) would really be a better idea. The government must ensure employment under MGNREGA. It must be increased from 100 to 150 days,” Banerjee told the news channel.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) guarantees at least 100 days of employment in a financial year to unskilled rural households at a pre-determined minimum wage rate.
The scheme, rolled out by the Congress-led United Progressive Alliance (UPA) government in 2006, is said to have provided work to the lakhs of individuals who moved back to their hometowns and villages after having lost employment in urban areas during the initial months of the COVID-19 pandemic.
Out of 7.18 crore households that availed of work under the rural job guarantee scheme from April 1, 2020, to March 26, 2021, over 60.80 lakh households had completed 100 days of employment.
Of these 60.80 lakh households, 10.20 lakh were from Rajasthan, followed by 7.42 lakh from Uttar Pradesh and 6.88 lakh from Andhra Pradesh.
In June 2020, Rajasthan Chief Minister Ashok Gehlot has asked Prime Minister Narendra Modi to increase the employment limit under the scheme to 200 days amid the pandemic.
In January 2021, the Uttarakhand government announced that the number of working days under the MGNREGA would be increased from 100 to 150 days. Then chief minister Trivendra Singh Rawat said that the state government would bear the cost of the increase in the days.
Banerjee also said the government policy think tank NITI Aayog Vice Chairman Rajiv Kumar's assessment that direct cash handouts to the poor do not increase demand is a wrong way to look at the problem. “See, if you are going to tell the poor that it is the last help they are getting, then they are actually going to save it. That's why I talk about assurance and MGNREGA.”
“The people who have gone below the poverty line (since the pandemic started) were actually the people who were just above the poverty line earlier... It's surely something that isn't good news, but it won't take much for them to go back to normal. I think the real question lies with the revival of the economy,” Banerjee told the news channel, adding that the employment situation may improve if sectors such as manufacturing, construction, and hotels – where unskilled labourers are employed – revived quickly.
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