Govt considering revision of minimum wage under MGNREGS

Wages under the central government’s flagship Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) may be revised to meet the minimum wages set by individual state governments. The two wage rates are usually updated in tandem, but some states have increased their minimum wages with an eye on the general elections next year.

The government is considering the first such revision since 2009. The daily wage under the MGNREGS ranges between Rs 168 in Bihar to Rs 280 in Haryana. However, the Bihar government hiked the minimum wage by 41 percent to Rs 237 in April 2018. Haryana did likewise. The disparity is causing logistical difficulties to authorities as the central government’s employment scheme is a key driver of growth in rural areas.

The quantum of the hike in the minimum wage under the MGNREGS is likely to be discussed by a high-level committee of chief ministers, headed by Madhya Pradesh chief minister Shivraj Singh Chauhan, according to a report in The Economic Times. The incongruence between the two rates came up at a regional conference of the Niti Aayog. The The central government’s policy think tank is reportedly setting out a roadmap for linking agricultural growth to the MGNREGA.

The revision to wages under the MGNREGS has been on the anvil since the last four years. During this time, the government set up two committees under Prof Mahendra Dev in 2013, and later, Nagesh Singh in 2016. The former recommended that the setting of MGNREGS wages be aligned to the minimum wage of individual states or the consumer price index for agricultural labourers (CPI-AL). It suggested the higher of the two be considered the benchmark for state-wise MGNREGS wages.

The second committee set up with Nagesh Singh as its head, said it was not imperative that the two wages be equalized. It pegged the financial burden of aligning the two at Rs 4,500 crore. The treasury will also be set back by an additional Rs 2,5000 crore every year if the index of calculation is shifted from CPI-Agriculture to CPI-Rural. A total of Rs 55,000 crore was allocated for payouts to the MNREGS in 2018-19.

The MGNREGS was launched by the UPA government in 2006 to tackle the problem of rural unemployment. The scheme, which comes under the purview of the Rural Development Ministry, assures employment to beneficiaries hailing from rural households for a minimum of 100 days every year to do unskilled manual labour. Since its inception, 2,637 crore person-days have been generated at a gross expense of Rs 4,76,718 crore.