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How to reduce food, job insecurity in rural areas – analysis

After the Covid-19 outbreak, 66% of rural households fell short of cash for food. About 40% reduced their food intake. Only 7% of the returnee…

After the Covid-19 outbreak, 66% of rural households fell short of cash for food. About 40% reduced their food intake. Only 7% of the returnee migrants are engaged in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). These are some of the findings of a survey of about 17,000 households in 80 districts (169 blocks) in 11 states, carried out by a coalition of 65 civil society organisations, called Rapid Rural Community Response to Covid-19 (RCRC). This shows that the State has to play a major role to play in reviving and rebuilding the economy.

First, only half received the full entitlement of free rations three times — 42% received this either once or twice; 8% got nothing at all. This situation is stark in backward states such as Odisha, Madhya Pradesh and Jharkhand. Second, 66% reported that they were short of cash for food, and 51% for medicines. This shows the urgent need to revive public systems of service delivery in health and nutrition. Third, 40% of the households surveyed reported that they had reduced food intake — the proportion is higher in Bihar (53%) and Jharkhand (48%).

The cumulative impact of this economic insecurity is resulting in widespread mental health issues. Three quarters (73%) of households expressed fear and anxiety about the future,in the case of Dalits, this was 77%. Three fifths of households (63%) are worried about sustained income and support to the family. More than one third (36%) have disturbed sleeping patterns and 33% are without social interactions.

The fiscal stimulus provided so far is only a fraction of what was announced. Some specific recommendations that emerge from analysing the survey results are the following. One, launch a massive programme to rehabilitate returnee migrants. A significant proportion of the migrant workers were women (18%) and children (26%) – the rest 56% were male migrants. Almost one third of the rural households surveyed had one or more migrant workers (5,257 out of 17,032). Four-fifths of these households (83%) reported that migrants had returned to villages. Surprisingly, only 7% of the returned migrants are currently engaged in MGNREGS work, 28% are working as casual labour, and two-fifths of the households have no gainful work. When will they go back to their destination states or cities like Delhi, Mumbai, Ahmedabad, and Surat? The survey showed that only one per cent migrants have gone back to cities, 58% were hoping to return by November, and 42% were unsure when they would go back. There is now concrete evidence of the urban economy contracting. The government may not have any option other than to launch a massive programme of village entrepreneurship for returnee migrants.

Second, allocate an additional Rs 50,000 crore for MGNREGS. A little less than one third of the households (31%) were engaged in MGNREGS over the last two months, which is a record, even as low participation is reported from Bihar (11%) and Jharkhand (15%). Households were engaged for 10 days a month on an average in the previous two months, with a variation of three to 14 days per month across states, which too is good news. However, it is alarming that 40% of households had not received full payment. There is going to be a huge surge in demand. Almost three-fourths of households (71%) want 15-plus days of MGNREGS work per month, from now on, for the next three months. As the demand for MGNREGS work is going to peak after the kharif season (October onwards), there is definitely a case for increased allocation to be made for the scheme.

Third, extend the free ration scheme for six more months. The current effectiveness of the scheme is around 50%, which needs to be improved. Our survey results showed that in comparison to the Public Distribution System (PDS), the Direct Benefit Transfer (DBT) schemes are far less effective. For example, only 63% women had Jan Dhan Yojana (JDY) accounts, out of which only 45% got Rs 1,500 ie Rs 500 three times.

Four, revive and strengthen public systems of service delivery such as the Integrated Child Development Services (ICDS) and the mid-day meal (MDM) programme along with pension schemes. The areas we are talking about are already those with very poor health and nutrition infrastructure and so if these systems are not revived and strengthened immediately, it will have long term consequences in terms of poor welfare outcomes.

Five, the Reserve Bank of India (RBI) should give a directive to banks to extend a top-up loan of Rs 10,000 crore to Self-help Groups (SHGs), for they have once again emerged as a major support for rural households. Nearly one-fourth of households (22%) were seeking loans through SHGs or Joint Liability Groups (JLGs). Given the exemplary high repayment track record of SHGs, they should be a preferred option over individuals seeking loans from banks. According to National Bank for Agriculture and Rural Development, there are 10 million SHGs, half of whom are linked to banks – five million SHGs with an outstanding of Rs 87,000 crore as on March 31,2019. If a top-up loan of Rs 20,000 per SHG at an average of Rs 2,000 per member, is extended to all these SHGs, it could go a long way in initiating livelihood activities at the SHG level.

It is only if such measures are undertaken on a war-footing can Prime Minister Narendra Modi hope to win the vishwas (trust) of people in rural India.

Binoy Acharya is founder, Unnati

Ved Arya, convenor, RCRC Coalition, and director, Buddha Fellowship Program, SRIJAN

Pratyaya Jagannath, research coordinator, RCRC Coalition, and managing director, KPS India Private Limited

PS Vijayshankar, co-founder, Samaj Pragati Sahyog

The views expressed are personal

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