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Govt increases wages for NREGS

Dropped the idea of changing formula for its flagship rural jobs programme

Policy Pulse
Publish Date: Mar 23 2016 12:11PM | Updated Date: Mar 23 2016 3:18PM

Govt increases wages for NREGS

 The government has dropped the idea of changing the wage calculation formula for its flagship rural jobs programme but has increased the wages about 6% for 2016-17. It has increased allocation to the Mahatma Gandhi National Rural Employment Guarantee Scheme 4% to Rs 38,500 crore for 2016-17 compared to that in the current fiscal. 

The scheme would have required an additional Rs 2,000 crore had the wages been increased as per the recommendations of the Mahendra Dev Committee, which favoured calculation of wages on the basis of the Consumer Price Index-rural instead of CPI-agriculture labour. 
CPI-rural — a more recent index compared to CPI-agricultural labour and rural labour — would protect workers from inflation taking into account the price changes for the entire rural population of the country, the committee said. Officials said the rural development ministry, which was considering the committee's recommendations, has decided to study the matter further after the finance ministry raised several questions. 
Many states have complained that wages paid under the scheme fall below the minimum wages for agriculture labour as notified by the state governments and sought revision. Minimum wages differ widely from state to state. 
Allocations under MGNREGA in the coming fiscal will be used for creating at least five lakh farm pond and dug wells in rainfed areas and 10 lakh compost pits for organic manure production. The demand for work under the scheme increased due to deficient monsoon rainfall in various states, with person-day work in the second quarter reaching 45.88 crore and 46.2 crore in the third quarter of the current fiscal.