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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