Dear PM Modi, please pull the plug on MGNREGA

Over the last one and half decade MGNREGA has been quick fix solution for people looking for unemployment
But the scope of finding a skilled based job through MGNREGA is extremely less as it is mainly focussed towards providing unskilled employment
In order to make way for skilled employment, the scheme needs to be done away with

India just received its highest Foreign Direct Investment (FDI) in history. Investors are pouring money into India’s economy as they have high hopes for its potential. But, the companies are constantly finding it tough to get a skilled workforce. If someone has to pinpoint a single reason for the skill deficit, then it will be MGNREGA. The time has come for PM Modi to pull the plug on the scheme.

MGNREGA-A quick fix solution to long term problem

MGNREGA was introduced by the Manmohan Singh government in 2005. It provides assurity of 100 days of employment to at least 1 member of a particular family. To make it accessible and less tedious, the job has to be within 5 km of the beneficiary’s house. To encourage female work force participation, one third of jobs under the scheme are reserved for women. Apparently, the scheme is mainly designed to provide utility to unskilled labour force.

Catering to unskilled population has proved to be an Achilles heel for it. People benefitting under MGNREGA initially found it easy and life-changing for them. However, within 2 employment cycles, they started to realise that other than a slight change in their financial condition, the scheme is designed to make them dependent on governments of the day. In the name of infrastructure creation, all they are asked is to either dig a pit or fill it. There is no skill required to do these kinds of work. At best, workers used to be involved in construction projects.

MGNREGA cannot generate skill based jobs

Slowly, the unskilled nature of the scheme reached top notch authorities. Even PM Modi addressed the concern and efforts were brought in to add skill based jobs to the horizon of jobs available under MGNREGA. In the Financial Year of 2015-16, the Modi Government started the Livelihoods in Full Employment (LIFE) project. Under this initiative, the government started to provide training to eligible MGNREGA workers aged 15-35. 5 years later, the government announced that it would allocate MGNREGA funds for hiring specialised manpower on natural resource management, coordination and monitoring of projects.

But, when you have 62 percent of the population desperately searching for jobs, then these kinds of solutions only turn out to be a drop in the ocean. India is currently bombarded with offers of companies willing to invest in its growth story. These companies have their respective domains of operation, some like Intel are looking for Indian employees who are expert in Silicon chip manufacturing, while software companies are looking for expert coders. Similarly, other companies have their own requirements as well.

People prefer short term benefits

The demand for workforce is there, a large amount of youth are ever ready to get employed, but unfortunately they do not have skills required for catering to these companies’ needs. Currently, 54 percent of Indians are below 25 years of age. It simply means that they have ample time to learn new skills and join respective domains of their workforce. But, employment statistics elaborate a totally different story.

In April 2022, 37.05 percent of Indians eligible to join the workforce were officially employed. But, for the country’s economy most of these figures can be termed as disguised unemployment, albeit with paid wages. These jobs did contribute to economic well-being but they did not bring in much aggregate economic output. Simply because, more than 23 million families would still prefer their earning member to have an unskilled MGNREGA job rather than a new skilled based job, which would require a bit of investment in time.

India has a huge skill deficit

It is not that the government has not taken steps to bridge the skill gap between industry demand and available expertise. The Modi government has in fact founded a special ministry called the Ministry of Skill Development and Entrepreneurship for this purpose. Currently headed by Dharmendra Pradhan, the Ministry runs organisations like National Skill Development Corporation (NSDC) and National Skill Development Agency (NSDA). NSDC is particularly important as its duty is to involve the private sector and arrange funding for training 50 crore youth by the end of 2022. To expedite the process NSDC came up with innovative initiatives like ‘Impact Bonds’.

However, the progress has been extremely slow. According to the Skills India report, only 45.9 percent of our workforce can be called skilled, which is in fact lower than 46.2 percent by 2020. Apparently, MGNREGA can be said to have a big role in it. Upskilling requires a few months of process, during which the risk of unemployment looms large. People avoid it and choose for the safer option of unskilled employment under MGNREGA.

When it was announced, MGNREGA was a quick fix solution to tame the negative emotions around unemployment figures in the country. For the next few years, it remained a tumour, but now it is a cancer eating up India’s reserves of Young population. It needs to be done away with as soon as possible.