NREGA wages to be tied to inflation

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  • Published 6.01.11

New Delhi, Jan. 5: Prime Minister Manmohan Singh has asked the rural development ministry to develop an index for fixing and revising wages under rural job scheme NREGA.

The move follows a letter from Sonia Gandhi requesting Singh to find a way to ensure workers under the scheme are paid the minimum wages across the country.

The minimum wages in several states, such as Rajasthan, Andhra Pradesh, Chhattisgarh, Jharkhand, Bihar and Karnataka, are now higher than Rs 100, the rate notified by the Centre for the scheme.

Till the new index is worked out, wages under the scheme will be tied to inflation as measured by the consumer price index for agricultural labourers. “The order will be effective from January 1, 2011,” said a source in the ministry, which oversees the scheme.

In his letter dated December 31 to Sonia, the Prime Minister wrote: “It has been decided to index the wage rate notified under NREGA to the consumer price index for agricultural labourers while maintaining the distinction between the notified wage rates under the NREGA and the Minimum Wages Act.”

Singh said a committee under the chairmanship of economist Pronab Sen had been formed to devise an NREGA wage index.

“However, till such time a satisfactory index is proposed by the committee and accepted by the government, the NREGA wage rates would continue to be indexed with the consumer price index for agricultural labour. I am confident that the above mechanism would appropriately address the concern of protecting the real wages of NREGA workers from inflation,” Singh said in his letter.

The Sonia-headed National Advisory Council had in a meeting on October 23 last year endorsed the proposal that workers under the scheme need to be paid at rates specified under the Minimum Wages Act, 1948.

“Workers in 19 states are being denied minimum wages under the NREGA scheme,” said Harsh Mander, a member of the council.