Tackling Rural Economic Distress

Context: There is an urgent need to strengthen the Public Distribution System (PDS) and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Accounting hunger and distress in India

• Hunger Watch’ report: Compared pre-lockdown situation last year to the situation in October 2020 to assess the impact of nationwide lockdown.
  • In October 2020, 27% of respondents had no income, 40% of respondents’ nutritional quality of food had become “much worse”, and 46% of respondents had to skip one meal at least once.
• Data by the Stranded Workers Action Network: For 81% of people, work had mostly stopped since April 15, 2021, and 76% of workers are short of food and cash and require immediate support.
• Migrant crisis: Migrant workers and the rural poor have been facing great distress over the past one year and the crisis for food and work is only going to intensify further.

Way forward: Strengthen PDS and the MGNREGS

• Expand PDS: To include all eligible households as about 100 million people are excluded from ration distribution system owing to a dated database based on 2011 Census.
  • Extend free food grains programme to a year: This is a rational demand on backdrop of record rice and wheat procurement last year, which is way more than current requirements.
• Revise and raise MGNREGS allocation: 2021-22 Central allocation for MGNREGS is Rs 38,500 crore less than last year’s revised estimate.
  • Even if 1 crore opt out of the scheme, accounting 75-80 days of employment in the year for 6.5 crore families (7.56 crore households in 2020-21) amounts to Rs 1.3 lakh crore at the current rate.
  • Hike wages at least 10%: Further pushing the estimated expenditure to Rs 1.4 lakh crore.

Conclusion: Considering the gravity of the situation, Union government should prioritise food and work for all and start making policy reforms right away.