Central Panel Says No MGNREGA Pay Hike Needed to Match Minimum Wages

The report saying that there was “no compelling reason to align MGNREGA and states’ minimum wages again”. Wages paid under the Act were last adjusted to meet minimum pay in 2009.

Labourers work on a dried lake to try and revive it under the NREGA at Ibrahimpatnam, on the outskirts of Hyderabad, June 17, 2009.

New Delhi: In its final report, the central panel for the revision of wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has said that there is no need for MGNREGA payment to match minimum wages paid by different states.

Wages paid under the Act were last adjusted to meet minimum wages in 2009 and the report, prepared by the ministry of rural development and submitted to Union minister Narendra Singh Tomar, said that “there is no compelling reason to align MGNREGA and states’ minimum wages again” reported the Indian Express.

In July, the panel had found that MGNREGA wages were lower than the minimum agricultural wages that were paid in 17 states and union territories. An Indian Express report at that time had said that an additional Rs 4,500 crore was needed in the Budget to bring the wages at par.

This year’s Budget allocation for the scheme was Rs 48,000 crore, the lowest ever revision in wages – Re 1 for states such as Assam, Bihar, Jharkhand and Uttar Pradesh, and Rs 2 or Rs 3 in others like Odisha and Tamil Nadu.

A seven-member committee headed by Mahendra Dev, the vice chancellor of the Indira Gandhi Institute of Development Research, had in a 2014 report said that MGNREGA workers needed to be paid at least the minimum agricultural wages, if not more, to be able to meet their basic needs. This report was rejected by the finance ministry but accepted by the rural development ministry, but on the advice of the finance ministry, a new panel was set up under additional secretary Nagesh Singh to study the “financial implications” of the Mahendra Dev panel report.

An official told the Indian Express, “Since 2009, when MGNREGA wages were aligned with the states’ minimum wages, there has been a divergence because several states have arbitrarily increased their minimum wages without following any scientific principles. There is no reason why the Centre should go by that.”

The Mahendra Dev committee report had suggested that the consumer price index for rural, which reflects current consumption patterns, should be made the basis of MGNREGA wage rate revisions, and not consumer price index for agricultural labourers, which is based on 1983 consumption patterns. Officials, however, told the Indian Express that this would not lead to a big difference in the wages of individual labourers’ wages and would needs only a Rs 625 crore increase in Budget allocation.

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