IN THE lowest wage hike under the Mahatma Gandhi National Rural Employment Scheme, the Centre has increased wages by an average of just 2.7 per cent this financial year.
In some states like Assam, Bihar, Jharkhand, Uttar Pradesh and Uttarakhand, the increase in daily wages under MGNREGA from April 1 is just Re 1. It is Rs 2 in drought-affected Tamil Nadu and Odisha, and Rs 3 in Andhra Pradesh and Telangana.
After the revision, the states with the lowest wages are Jharkhand and Bihar, where workers will now get Rs 168 (up from Rs 167) per day. Haryana has the highest wages, up from Rs 259 last year to Rs 277.
Last financial year, the overall wage increase was slightly higher at 5.7 per cent.
Earlier, the finance ministry rejected the recommendations of an expert committee set up by the rural development ministry, which sought a fair revision of MGNREGA wages to bring them on par with the minimum wages paid to unskilled agricultural workers in the states.
“This ministry is of the considered opinion that the proposal for change in the base wage rate is not advisable at this stage,” the finance ministry said in its reply.
In its report, the seven-member expert committee — headed by S Mahendra Dev, Vice-Chancellor of Indira Gandhi Institute of Development Research — made two essential recommendations: the baseline for MGNREGA indexation should be the current minimum wage fixed by the state for unskilled agricultural workers; the Consumer Price Index for Rural (CPI-Rural), which reflects the current consumption pattern of rural households, should be the basis for revising MGNREGA wage rates, and not CPI for Agricultural Labourers, which is based on the consumption pattern of 1983.
But the finance ministry asked the rural development ministry to “undertake other steps to streamline the implementation of MGNREGA”, such as swift approval of projects, social audit and inventory of assets created. Moreover, to understand the “financial implications” of the report’s recommendations, the ministry directed the rural development ministry to set up another committee.
A spokesperson for the finance ministry said the demand would have huge implications on the exchequer. “Moreover, nowhere does the MGNREGA legislation mandate that minimum wages have to be paid; the government can fix the wage rate. Also, if the MGNREGA wages are increased steeply, people will move towards MGNREGA and there won’t be enough labourers willing to do agricultural work,” said the official.
“As per the finance ministry’s directions, we have constituted another committee under Additional Secretary Nagesh Singh. The panel will hold its first meeting next month,” said an official of the rural development ministry.
As a result of the growing divergence between MGNREGA wages notified by the Centre and the minimum wage as revised by the states, MGNREGA wages are way below the state’s minimum agricultural wage in over half the states. In several others, it is only marginally higher.
For instance, the minimum daily wage as well as the MGNREGA wage was Rs 120 in Bihar in 2011. Today, the minimum wage in the state has increased to Rs 232 per day, while MGNREGA wage is only Rs 168.
“It is the right of workers to get minimum wage so as to meet their basic needs. Courts in several states also advocated minimum wage. We have also held that the new CPI (Rural) should be used instead of the CPI (Agricultural Labourers), which has a base of mid-1980s, as workers’ wages should be higher each year in comparison with consumer price index,” Dev told The indian Express.
Meanwhile, Jharkhand Chief Secretary Rajbala Verma has written a letter to the rural development ministry stating that he is “disappointed” by the Re 1 wage hike. The letter mentions that while “the average national real wage of the country has risen by more than 20 per cent in the last 10 years, the increase for MGNREGA workers has only been 4.7 per cent in the corresponding period”.
Jharkhand, which has the highest out-migration according to the Economic Survey of India 2017, has the lowest MGNREGA wage — Rs 168 per day, way below its minimum agricultural wage of Rs 224 per day.