Apropos “The rural wage crisis” (May 23), a persistent problem in the economy. We need to take into consideration certain fundamental and transitory factors behind this phenomenon. First, the agricultural real wage and construction (mason) real wage growth rate (about 14 per cent), as a proxy of non-agricultural wage, were showing an upward trend between 2007 and 2013. Both the real wage rates became negative from November 2014 and reached a low 3-4 per cent in 2017-18. We can recall that in 2014-15, food grain production was affected by a drought breakout, and low farm gate prices impacted the wholesale price index, the agricultural or rural wage rate, and eventually, the prosperity of rural workers.
Second, the Mahatma Gandhi National Rural Employment Guarantee (MGNREG), one of the largest national workfare programmes for unskilled rural people, promised to give employment to at least one member per household for 100 man-days. However, that lost momentum after 2013 due to gender discrimination in wage rate, exploitation at the work place, unreasonable delay in payment and leakage. Consequently, workers withdrawing from workfare programmes were compelled to get absorbed in construction work.
Third, by 2011-12 the construction sector, according to the National Sample Survey Employment- Unemployment Rounds, was the largest employer of rural men and women after manufacturing in the rural non-farm segment. That too was hit by the demonetisation drive of 2016. So, migrant rural workers have had to return home in search of livelihoods.
All these had a spiralling effect on the rural wage-price inflation, according to the Reserve Bank of India discussion paper, that may be difficult to unravel without an appropriate policy push.
Kushankur Dey Bhubaneswar
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