MGNREGS expects record spending as demonetisation drives demand

Spending under the flagship Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) could touch a record Rs 58,000 crore in 2016-17. Even after accounting of dues from last year, it is still among the highest outlays, since its inception in 2006.

Reinforced by recent reports of a sharp-pick up in sowing of the winter crop, a decent monsoon has ensured that agriculture is on the mend. This implies that demand for work should be less than that in a drought year. 

Proper analysis of MGNREGS data shows that states like Maharashtra, which are reeling under the impact of drought, are experiencing an upsurge in demand for labour, as states like Bihar and Punjab are also witnessing a major hike in demand for work after their drained out workforce left in the wake of a lack of income source, post demonetisation.

Meanwhile, MGNREGS was created as a safety net for the rural sector. It guarantees 100 days of employment a year, especially in between the two main crop seasons, for one member of every rural household.