Govt should widen MGNREGA, launch urban employment guarantee scheme: Jayati Ghosh

India is ready to see rafts of announcements in the upcoming Union Budget 2022-2023. While presenting the budget on February 1; Finance Minister Nirmala Sitharaman will try to pull various levers of the economy to revive the demand. 

But well-known economist and Professor of Economics at the University of Massachusetts Amherst, Jayati Ghosh believes that more funding in Mahatma Gandhi National Rural Employment Guarantee Scheme and launching a new urban employment guarantee scheme can revive the demand and be a game-changer. 

“My suggestion is to dramatically increase the allocation for MGNREGA and also increase it to 250 days per household, make sure that everybody who is asking for that gets it, the money reaches the state governments and that the wages are paid on time. The government has already spent all the money that they had committed for the whole year by December, and then they needed another 27,000. They are starving this program of funds; it is a lifeline. It's essential,” says Ghosh in an exclusive interview with Business Today. 

Last year, Jayati Ghosh was named among 20 prominent personalities appointed by the United Nations (UN) to a high-level advisory board that was supposed to provide recommendations for the UN Secretary-General to respond to the current and future socio-economic challenges in the post-COVID-19 world. 

 

Ghosh believes that having an urban employment guarantee scheme is a must as of now. 

“Now, there are six states that have already started pilots, but state governments don't have the money. So, start an urban Employment Guarantee programme, there are templates, you can begin with pilots, but put it out there because you have to increase people's purchasing power,” she adds. 

According to her, the dramatic increase in the universal pension is the need of the hour and in the upcoming budget, there should be some announcements on this front. 

“It embarrasses me to even give you the number that is currently being paid as universal pension which was Rs 200 rupees for about 15 years and was eventually raised to 500 rupees. What can you do with 500 rupees today? I think half of the minimum wage should be paid as universal pension. That is what many governments do. Nepal does it, but let us even say that you can't do the minimum wage, at least give 3,000 a month 4,000 a month,” she notes. 

Ghosh, former professor of economics at Jawahar Lal Nehru University says that these steps, if taken, will have a multiplier effect on the economy. 

Throwing light on India’s fiscal response to the pandemic, she states, “India is the outlier. We are the outlier among BRICS, we are outlier amongst G20. We are the outlier among all middle-income countries. Outlier not in a good way.” 

Paving the way forward, Ghosh suggests the government should triple the health spending. “We are one of the lowest spenders in the world on public health. Nobody abroad believes me when I say that the central government spends 0.3 per cent, and the centre and states together spend 1 per cent. It must be 10 per cent. We need to triple public health spending now.”

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