States to pay additional NREGS bill: Plan panel

Planning Commission said states would have to bear additional payment towards the National Rural Employment Guarantee Scheme (NREGS) beyond the amount prescribed by the Centre to match minimum wages.

“If the state’s minimum wages are below or close to that (prescribed under NREGS), then it is not a problem. But if you are a rich state that can afford very high minimum wages, the central government reimbursement will be limited,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters.

Under NREGS, a worker is entitled to Rs 100 per day for minimum of 100 days in a year. Later, it was decided to link the payment to inflation. In the revised structure (after linking it to inflation), the wages under NREGA will go up by 17 to 30 per cent on the base of Rs 100 for the present, a move that will benefit 50 million people. However, under the Minimum Wages Act, the wages are fixed by the states and these vary from state to state.

Ahluwalia said if the minimum wage in a state is higher than compensation prescribed under NREGS, the state should bear the additional burden.