The Telegraph
Tuesday , July 22 , 2014
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Panel moots wage rejig

New Delhi, July 21: A government panel has suggested revision in MGNREGA payments by tying them to the minimum wage rates in a move that could benefit Bengal and 11 other states where the proposed benchmark is higher.

Wage rates under the rural job scheme cannot be less than the minimum wage for agricultural labourers of the state, said the panel of experts headed by economics professor Mahendra Dev. The panel was set up last year during the term of the Congress-led UPA, which had started the scheme in 2006 and pitched it as its signature welfare plan.

“The baseline for MNREGA wage indexation from 2014 may be the current minimum wage rate for unskilled agricultural labourers fixed by the states under the Minimum Wages Act or the current MGNREGA wage rate, whichever is higher,” the panel said in its report recently.

The Centre had revised the job scheme rates this February based on changes in the consumer price index for agricultural labourers (CPI-AL) to which the payments have been tied since 2008.

The rates were initially based on the minimum wage rate but the UPA government modified it saying consumer prices were the best gauge to measure changes in cost of living.

After the change this February, the MGNREGA rate in Bengal went up from Rs 151 to Rs 169. If the panel’s suggestion is accepted, it should rise to Rs 193 —the state’s minimum wage for this category of labourers.

Other states that could benefit from the recommendation include Bihar, Jharkhand, Andhra Pradesh, Punjab, Rajasthan, Sikkim, Uttarakhand and Goa.

The expert panel has also suggested that future NREGA revisions be based on the consumer price index for rural labourers (CPI-RL), which it said was a broader gauge.

Activist Nikhil Dey, a panel member, urged the Centre to implement the suggestions without delay. “We expect the government to implement the recommendations and give benefits to workers who are paid less than the minimum wages.”

At the same time, Dey conceded the scheme could lose its appeal in some states as existing NREGA workers could switch to other activities after the parity in wages. “Since the minimum wage is high, the MGNREGA projects may suffer in certain states.”

Minimum wages are fixed by states and the UPA government had earlier argued that linking the job scheme payments to them could hit workers in states that fail to periodically increase their rates for labourers.