Independently, Centre for Monitoring Indian Economy (CMIE) data shows stability in the employment rate at the macro level. This is reassuring. The employment rate rose marginally in May from April due to a small decline in labour participation rate, but a larger fall in unemployment rate. The shift in employment from agriculture to industry (particularly manufacturing) and services in April-May is welcome. Factory output also grew to an eight-month high of 7.1% in April despite a high base, signalling economic recovery.
Nevertheless, containing inflation, which can also be a possible reason for the increase in demand for MGNREGA, is an important task. Rightly, RBI has tightened policy rates, and the assessment of a normal monsoon bodes well to tame food inflation. Farm productivity should rise and investment must flow into infrastructure (building more roads and cold chains) to create more jobs and avert rural distress.