How falling rural incomes will hurt festive demand
NEW DELHI : Following an uneven monsoon, demand for work under the national rural jobs scheme has soared, while farm revenues have been hit by crop losses and export curbs. Will a dent to rural incomes take the sheen off festive season demand? Mint explores. The Mahatma Gandhi National Rural Employment Guarantee scheme (MGNREGS) promises 100 days of work in a year to every rural family.
Between July and September, demand for these jobs was 15% higher than last year (2022-23), and 29% higher when compared with the pre-pandemic year (2019-20). Millions of rural families chasing low-paying jobs means a short supply of regular jobs, or a likely hit to household earnings. Rising dependence on a safety net scheme is a sign of distress.
Demand for MGNREGS jobs hit record highs after the covid-19 lockdown was announced in March 2020. Retail prices of cereals, pulses and vegetables in August were higher by 12%, 13% and 26%, respectively, year-on-year. But this does not mean farmers are earning more.
Prices are on a rise following repeated crop losses due to freak weather—damage to wheat due to heat wave and untimely rains, and lower anticipated rice harvest due to deficit rains. Prices of pulses are rising due to less area planted by farmers and a coming shortage due to drought in major growing states. Tomato prices shot up in July and August due to lower production and damage due to excess rains—but only a handful of lucky farmers benefited.
The south-west monsoon, a lifeline for rural India, recorded a deficit of 6% compared to the 50-year-average. But the spread of monsoon over time and across regions was uneven. Several states were hit by a drought while others battled floods and extreme rains.
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