Latest news with #NationalRuralEmploymentGuaranteeAct
Mint
15-07-2025
- Business
- Mint
India's rural recovery: Don't count on it just yet
Nikhil Gupta Several data points make a case for optimism but there are also signs of the revival losing strength. Investors would still need to watch the rural sector for a few months before they can get a clear picture of its performance. There are at least five indicators that suggest fading rural strength in the country. Gift this article In the last two quarters of 2024-25, India's rural sector posted a solid recovery. Based on various official macroeconomic indicators, our in-house analysis suggests a four-year high growth in India's rural sector during the period. This came as a huge relief to the economy and market participants, as an improving rural sector offset a weakening urban sector (based on another set of indicators). In the last two quarters of 2024-25, India's rural sector posted a solid recovery. Based on various official macroeconomic indicators, our in-house analysis suggests a four-year high growth in India's rural sector during the period. This came as a huge relief to the economy and market participants, as an improving rural sector offset a weakening urban sector (based on another set of indicators). This improvement in the second half of 2024-25 has fuelled expectations that the rural sector is on the mend and set to grow faster in 2025-26, supporting overall consumption growth. Also Read: Pour resources into rural India for a manufacturing boom The early onset of the southwest monsoon in India and a 9% surplus in June rainfall have strengthened this optimism. With good rains so far, the live storage in 161 reservoirs was 36.4% of their total capacity at the end of June, compared to 20.3% a year earlier and almost 50% higher than the long-term average (i.e. 10-year period) by end-June. In fact, the current reservoir levels are the highest at the end of June for any year in the 21st century. More importantly, agricultural real wages grew at a six-year high of 3.4% from a year earlier in the fourth quarter of 2024-25, following an average decline of 0.3% in the previous three years. This pick-up continued in April as well, which recorded a seven-and-a-half-year-high real growth of 4.8%. Although non-agricultural rural wages have also increased in recent quarters, their improvement is not as strong as in agricultural wages. Can rural wages maintain this momentum for at least a few more quarters? Wages under the National Rural Employment Guarantee Act (NREGA)—which seem to be one of the leading indicators of agricultural wages—are already growing at a slower pace. Real wages under NREGA grew 6.6% year-on-year in the fourth quarter of 2024-25, marking the fastest growth in a decade. This growth has slowed to 5.6% in the first quarter of 2025-26, which is still strong but a concern. We had seen this pattern of inverted V-shaped growth in NREGA real wages during the pandemic and then in early 2023-24, but it petered out quickly in both instances. It remains to be seen if this time will be different. There is no doubt that an improvement in rural wages is a highly welcome and very encouraging indicator. The good news, however, ends there. There are at least five other indicators that suggest fading rural strength in the country. First, farming's terms-of-trade, which compares output price inflation with input inflation (excluding labour) for the agricultural sector estimated from the wholesale price index and thus gives us an idea of profit margins, declined for the second consecutive month in May. Agricultural input inflation started rising beginning February, while output inflation started declining from April, leading to a fall in the farm sector's terms-of-trade in the last two months. Notably, it improved for 22 consecutive months before that. What wages are for farm workers, terms-of-trade represent for agricultural producers. Second, the sale or availability of fertilizer (production plus imports) also contracted for the second consecutive month in May, marking the worst contraction of 14.3% year-on-year in 15 months, and that too on a weak base. Fertilizer sales fell 10% year-on-year during the first two months of fiscal 2025-26, after declining 0.6% in the corresponding period last year. Third, rural spending of the central government—including by the Union ministries of agriculture and farmers' welfare, rural development, panchayati raj and drinking water and sanitation—fell 13.9% year-on-year in real terms during April-May, following contractions in the previous two years (2023-24 and 2024-25). Excluding the fertilizer subsidy, it declined faster in the first two months of 2025-26. Fourth, two-wheeler sales declined 7.6% year-on-year in April-May, the fourth decline in seven months after 30 consecutive months of growth. Recent data suggests that these sales remained weak in June as well. Lastly, after rising in January and March when compared with the year-ago levels, work demanded under NREGA—an indicator of financial stress in rural India—fell in April. This was a relief because NREGA work demand had declined during the January-March period in each of the last three years. However, it grew by 1.1% year-on-year in May 2025 and then 3.7% in June. This rise has come notwithstanding excess rainfall and an early onset of this year's monsoon. Not surprisingly then, the central government has already released ₹ 37,500 crore in the first quarter of 2025-26, accounting for 44% of its annual target of ₹ 86,000 crore for NREGA spending. What does all this mean? The purpose of this argument is to caution investors on the rural sector's strength. Better wage growth and a plentiful monsoon are definitely positive for the sector. However, there are several other pieces of economic data pointing to a fading of the recovery in India's rural economy. Therefore, it is still early days and a firm conclusion on the health of India's rural sector can be drawn only after a few months. The author is India economist and executive director at CLSA India and the author of 'The Eight Per Cent Solution'. Topics You May Be Interested In
The Hindu
10-07-2025
- Business
- The Hindu
Relief for 3.5 lakh contractors in State as Centre releases ₹180 crore NREGA dues
In a major relief to nearly 3.5 lakh small-scale contracts in Andhra Pradesh, the Central Government has released ₹180 crore towards pending bills under the National Rural Employment Guarantee Act (NREGA) for works executed between 2014 and 2019. Union Minister of State for Rural Development Dr. Pemmasani Chandra Sekhar announced release of the amount on Thursday, stating that the dues had been withheld for years due to alleged political vendetta by the previous State government. 'Despite completion of works, the earlier government froze payments, even modifying software systems to block contractor bills. No payments were made for six years,' he said. The current NDA-led coalition government coordinated with the central and State Rural Development departments, revived the old software, and successfully reopened over 3.5 lakh out of 4.3 lakh work records. Additionally, State matching funds have also been allocated, and officials have been instructed to ensure all outstanding dues are paid within 30 days.
India Today
13-06-2025
- Business
- India Today
No end to NREGA famine
Much labour has been spent on this debate—never settled, it's gasping for capital too. Left marooned by New Delhi 40 months ago, West Bengal has had to dig into its own scanty coffers to keep work afloat under the National Rural Employment Guarantee Act (NREGA). It's nearly not enough for the state's 138 million active job card holders. Consider the figures. Since March 2022, when the Centre suspended NREGA funds citing irregularities, Bengal has managed to create only 809.6 million person days—barely double the 364.3 million achieved in a single 'normal' year just before. Indeed, in FY22, it was also able to give work to 11.2 million individuals.
Time of India
05-06-2025
- Time of India
SIT formed for 7.3 crore NREGA scam in Bharuch
Surat: After Dahod and other districts in Gujarat, a scam in the National Rural Employment Guarantee Act (NREGA) scheme has been uncovered in Bharuch district. An official of the Bharuch district rural development agency (DRDA), Pratik Chaudhary, filed an FIR at Bharuch A Division police station against two firms that are registered in Veraval, and the govt officials concerned, for a scam worth Rs 7.30 crore. Tired of too many ads? go ad free now Police have invoked charges of cheating, forgery and criminal conspiracy. Bharuch SP Mayur Chavda formed a special investigation team (SIT) under DySP Dr Anil Sisara to probe the matter. The persons accused are the proprietors of the two firms, Piyush Nukani of Murlidhar Enterprise, and Jodha Sabhad of Jalaram Enterprise; and govt servants in three talukas — Jambusar, Amod and Hansot. The FIR alleges that the accused produced inflated bills to carry out a Rs 7.30 crore scam in works under the scheme at more than 56 villages. It states that the accused did not use quarry spoil as specified in the tender or the metal that they had mentioned in the bills. Teams formed by the district development officer (DDO) first checked 11 works to confirm the scam. Teams later found that the same scam took place in 56 villages of Hansot, Jambusar and Amod. In most cases, the accused produced forged bills to get paid. They did not use the materials specified by the govt in the standard operating procedure (SOP). Both firms conspired with the govt officials to perpetrate the scam. Both firms were only responsible for supplying material. They conspired with the officials to get money meant for unemployed people from the NREGA scheme. They did not employ these unemployed persons as required by the scheme and completed road projects and other works to illegally obtain govt funds. This scam had been going on in these three talukas of Bharuch since January 2023. The FIR was filed on May 30, after which an SIT was formed on June 4 under the supervision of Dr Anil Sisara. The SIT included 11 policemen, including an inspector, sub-inspector, assistant sub-inspector, and constables. The SIT has started its work and has taken statements from 30 people so far. The SIT has also called govt officials and employees for their statements. Officials are likely to visit all 56 villages where the scam took place.
The Hindu
05-06-2025
- General
- The Hindu
‘Strict action will be taken against officials failing to implement NREGA effectively'
Effective implementation of the National Rural Employment Guarantee Act (NREGA) is crucial for public welfare and any negligence or failure will be dealt with sternly, said Chief Executive Officer (CEO) of the Raichur Zilla Panchayat Rahul Tukaram Pandve. Chairing an ad hoc committee meeting on NREGA on Wednesday at the Zilla Panchayat office in Raichur, the CEO emphasised that taluk-level ad hoc committees must initiate strict action against those found neglecting their duties or failing to ensure proper implementation of the scheme. The CEO noted that 558 cases are under review across the district and said that details of actions taken should be incorporated into the Action Taken Report (ATR) to facilitate further steps. 'With the onset of monsoon, importance should be given to ensuring the operation of clean drinking water units in rural areas. The officials must inspect the units and take immediate corrective action wherever deficiencies are found. PDOs (Panchayat Development Officers) must strictly to maintain clean water supply and sanitation during the rainy season,' he said. He further advised that preventive measures such as maintaining cleanliness in every village must be undertaken to ensure purity of drinking water. The CEO also mentioned that social audits for the projects undertaken during the 2024-25 financial year began on June 2. He directed the social audit teams to submit all relevant NREGA and 15th Finance Commission project documents and records without fail the same day. Zilla Panchayat Planning Director Sharanabasavaraj Kesaratti was, among others, present at the meeting.
