Work demand and employment provided under Mahatma Gandhi National Rural Employment Guarantee scheme fell to its lowest since the outbreak of the Covid-19 pandemic as recovery gained ground with hiring picking up across sectors.

Data showed that work generated under the scheme fell by 10.9% in September to 23.47 crore person days compared to 26.36 crore person days in September 2020. Sequentially also, work generated under the scheme stood eased. In August work generated stood at 27.61 crore person days.

Demand for work fell by 8.3% last month to touch its lowest at 2.86 crore persons in the last 17 months.

But work provided under the scheme continued to be higher than the pre-covid levels. Households that benefited under the scheme in September 2019 stood at 1.20 crore while the persondays work generated was 14.6 crore.

Data from the Centre for Monitoring Indian Economy also corroborated the trend. It showed that s 8.5 million additional jobs were created in September with 76.5% or 6.5 million created in rural India across non-farm sectors. While agriculture absorbed an additional 0.55 million during the month, the remaining six million were absorbed in non-farm rural jobs, largely construction and manufacturing, it said.

Labour expert KR Shyam Sundar said the substantial decline in Mgnrega jobs in September was on the expected lines.

“With the pick-up in economic activity as seen from several indicators, it is expected that demand for work under Mgnrega will fall as the latter is the fallback option,” he said.

Sundar, however, cautioned that it may be too premature to draw a medium-term conclusion from monthly data, saying that the fluctuations in demand and supply should narrow down for the labour market to stabilise.

The Centre has till date released Rs 60,611.87 crore under the scheme, which is 83.02% of the Rs 73,000 crore allocated for the scheme for 2021-22. The budgeted allocation for 2021-22, however, is 34.52% lower than the revised estimate of Rs 1,11,500 crore in 2020-21, when additional Rs 40,000 crore were given under the scheme to meet the surge in demand for work under Mgnrega following mass scale reverse migration and loss of jobs following the outbreak of the pandemic.