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Rural distress and demand up, NREG gets lowest wage hike for 2019-2020

With effect from April 1, rural NREG labourers in six states and Union territories will see no annual increase in their daily wages this financial year while workers in another 15 states will get a daily wage hike of between Re 1 and Rs 5.

Written by Shalini Nair | New Delhi | Updated: March 29, 2019 10:26:30 am
NREG labourers, farmer wages, nreg wages dip, nreg lowest wage hike, rural economy, rural distress, agrarian crisis, rural wage, india news, Mahatma Gandhi National Rural Employment Guarantee Act As on March 28, NREG numbers for this financial year had reached 257 crore person-days as against 233 crore last year. (File photo)

For the year 2019-20, the Ministry of Rural Development notified state-wise wages for unskilled manual workers under the Mahatma Gandhi National Rural Employment Guarantee Act which translate to a 2.16 per cent average annual hike — the lowest ever. So with effect from April 1, rural NREG labourers in six states and Union territories will see no annual increase in their daily wages this financial year while workers in another 15 states will get a daily wage hike of between Re 1 and Rs 5.

Daily wages will remain unchanged in states such as Karnataka, Kerala and West Bengal while it will increase by Re 1 in Himachal Pradesh and Punjab and Rs 2 in Madhya Pradesh and Chhattisgarh.

Average wage hikes have been going down over the last few years. For 2018-19, it was 2.9 per cent and in the two preceding years it was 2.7 per cent and 5.7 per cent increase respectively. But the lowest hike comes when, reflecting rural distress, NREG registered the highest number of person-days of work since 2010-11.

As on March 28, NREG numbers for this financial year had reached 257 crore person-days as against 233 crore last year. Jharkhand and Bihar continue to have the lowest NREG wages at Rs 171 a day followed by Madhya Pradesh and Chhattisgarh at Rs 176 a day. The highest wages would be in the states of Haryana at Rs 284 a day and in Kerala at Rs 271 daily.

The continued low wage hike is the outcome of the Finance Ministry’s rejection of the expert Mahendra Dev panel report that recommended bringing NREG wages on par with the minimum state agricultural wages and then indexing it to Consumer Protection Price (Rural) for annual revision. Dev is the Director of the Indira Gandhi Institute of Development Research.

The panel had said that the existing practice of linking it to Consumer Price Index for Agricultural Labour is outdated as it’s based on the consumption pattern of 1983 while CPI-Rural reflects a more recent and robust consumption pattern of rural households.

After the Mahendra Dev report was junked, the MoRD instituted a second committee under Additional Secretary Nagesh Singh. This panel did not insist on aligning the base NREG wages with minimum wages but ruled that the annual wage revision must be linked to CPI-Rural.

However, this recommendation, too, was rejected by the Finance Ministry.

The scheme, launched in 2006, guarantees 100 days of paid work to anyone who demands for it in rural India at the wage rate notified by the Centre. The number of days can be extended to 150 in times of drought or flood to compensate for the loss of farm income.

Releasing her party’s manifesto on Wednesday, Trinamool Congress’s chief Mamata Banerjee promised doubling of NREG wages and increasing the work days to 200 a year. NREG is expected to figure prominently in the manifesto that will be unveiled by the Congress on April 2.

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