Message from MGNREGA
Context: The economic impact of the pandemic and the ongoing recovery have exacerbated the duality in the Indian economy.
Impact of Pandemic in Indian Economy
- Large number of small and medium enterprises significantly suffered in the unorganised sector.
- Level of poverty in India have gone up for the first time in decades.
- Dichotomy is clearly visible in the job market.
- Firms in technology sector are facing higher attrition and increasing hiring, while job prospects with lower skills remain weak.
- Higher demand of jobs under MGNREGA: Data shows that scheme has exhausted its budget for the year.
- India is not creating enough jobs in the labour-intensive sectors.
Way Forward
- Higher allocation would be necessary because current year’s allocation has to account last year’s shortfall.
- Need to support households at the bottom of the income pyramid.
- Policy refocuses: Increasing duality in the economy will need greater policy attention.
- Low-skill manufacturing jobs needed to sustain economic growth.
- Boom in tech and tech-enabled businesses is a welcome development. Supportive policies need to be put in place.
- Job creation will need more policy attention than ever: It is necessary for higher economic growth and to maintain social harmony.
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