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Centre to link MNREGA wages to CPI-Rural for better hike

Expected to add an additional burden of Rs 4,500 crore on the exchequer.

Sanjeeb Mukherjee  |  New Delhi 

Rural, MGNREGA, Employment
For 2017-18 financial year, MGNREGA wages across the country increased by a mere Re 1 per day, per person on an average for most states.

To ensure that wages under reflect a more realistic ground situation, the Central government seems to be in favour of linking them to Price Index-Rural (CPI-R) rather than the current practice of the wages being aligned to CPI-Agricultural Labourers (CPI-AL).

CPI-R has a higher weightage of food items in them particularly cereals, which after the nationwide implementation of the National Food Security Act (NFSA) has remained stagnant at Rs 3 per kg for rice and Rs 1 per kg for coarse cereals sold through ration shops. 

Officials said that because of this stagnancy, CPI-AL has hardly moved in the last few wages as a result of which wages aligned with them have also not risen by much.

In fact, for 2017-18 financial year, wages across the country increased by a mere Re 1 per day, per person on an average for most states.

Moreover, because of being aligned with CPI-AL, wages are lower than the minimum wage fixed in many states, which lead to lower than budgeted person-days of work as workers prefer to work outside the ambit.

Once wages are linked to CPI-Rural, the annual hikes would be more as the weight of food items in the index is less.

For 2017-18, the Central government had budgeted Rs 48,000 crore for assuming an estimated 215 crore person-days of work to be provided during the year. 

A recently appointed panel under a senior official from the ministry of rural development has found that of all the 29 states and seven union territories minimum wages are higher than agricultural wages in 15 states. 

According to an Indian Express report, any upward revision of to align them with minimum wages in all states is expected to cost the exchequer around Rs 4,500 crore extra in 2017-18, while aligning it with CPI-Rural might cost lesser.

The report said that as per a data examined by the panel, minimum wages paid to workers are significantly higher than wages in Karnataka, Punjab, Jharkhand, Uttarakhand, West Bengal, Mizoram, and Andaman and the Nicobar Islands.

The other states where wages fail to match up are Sikkim, Andhra Pradesh, Telangana, Haryana, Madhya Pradesh and Bihar. In Rajasthan and Himachal Pradesh, the minimum wages are marginally higher than wages, the report noted.

The panel has favoured raising the wage rate at par with minimum agricultural wages paid in states where it is lower and retaining it in states where it is on par or even higher. 

The entire exercise is expected to add an additional burden of Rs 4,500 crore on the exchequer. 

Civil society activists have been long demanding revision of wages as the current system, which also is riddled with delays, makes the entire scheme remunerative for workers.

First Published: Mon, July 10 2017. 13:47 IST