MGNREGS Wages Lag Behind Rising Cost of Living

  • December 18, 2024
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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MGNREGS Wages Lag Behind Rising Cost of Living

Sub : Polity

Sec: Legislation in news

Why in News

  • A Parliamentary Committee has recently raised concerns regarding the inadequacy of wages paid under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Key Findings of the Parliamentary Panel:

  • The current wages paid under MGNREGS are not commensurate with the rising cost of living.
  • The panel highlighted that these low wages fail to provide sufficient financial support to workers.
  • Insufficient wages and delays in payments discourage participation in the scheme and push workers to migrate in search of better-paying opportunities.
  • In the financial year 2024–25, MGNREGS wages saw an average increase of ₹28 per day across India.
  • Haryana offers the highest daily wage under MGNREGS at ₹374, while Arunachal Pradesh and Nagaland provide the lowest, at ₹234.
  • The base rate for wage fixation under MGNREGS has remained unchanged since the scheme’s inception.
  • The Government of India uses the Consumer Price Index for Agricultural Labour (CPI-AL) to notify wage rates. However, the indexation process relies on outdated benchmarks, with the base rate fixed at either ₹100 or the rate as of April 1, 2019, whichever is higher.

Recommendations by the Panel

  • The panel has strongly recommended linking MGNREGS wages to a national inflation index that better reflects the cost of living.
  • A periodic revision of the base rate for wage fixation is essential to ensure that the scheme remains relevant and effective in combating rural unemployment.
  • Addressing delays in wage payments is critical to maintaining the credibility of the scheme and ensuring worker satisfaction.

MGNREGA:

  • The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), passed in 2005, guarantees the “right to work” for rural citizens by providing 100 days of unskilled manual labor annually to an eligible household.

Eligibility Criteria

  • Citizenship: Must be an Indian citizen.
  • Age Requirement: Minimum age is 18 years.
  • Rural Residence: Applicant must belong to a rural household.
  • Willingness for Unskilled Work: Must agree to undertake unskilled manual labour.

Employment Guarantees

  • 100 Days of Work: Assures 100 days of employment at government-mandated wages.
  • Unemployment Allowance: If work is not assigned within 15 days, an unemployment allowance is provided.
  • Proximity of Work: Employment is offered within 5 km of the applicant’s residence.
  • Travel Allowance: Provided if the worksite is beyond 5 km.
  • Working Conditions: Includes basic amenities, medical facilities, and compensation for injuries.

Administrative Framework

  • Gram Sabhas suggest and oversee at least 50% of the works.
  • Section 17 mandates social audits to ensure accountability and transparency.
  • Citizens and community groups actively participate in audits of MGNREGA projects.

Achievements

  • Employment Generation: A vital safety net for rural workers during economic downturns.
  • Women Empowerment: Over 50% of MGNREGA workers are women, boosting their participation in the labor force.
  • Reduction in Migration: Provides rural employment, reducing the need for migration to urban areas.
  • Mazdoor Kisan Shakti Sangathan (MKSS): Played a crucial role in advocating for the right to work.
  • Jean Drèze: Development economist who contributed significantly to the conceptualization and design of the Act.

Consumer Price Index (CPI):

  • CPI measures the changes in the price level of a basket of consumer goods and services purchased by households over time.
  • It reflects inflation by showing how prices vary for essential goods and services.
  • Types of CPI in India:
  1. CPI for Industrial Workers (CPI-IW): For industrial labourers.
  2. CPI for Agricultural Labourers (CPI-AL): For agricultural workers.
  3. CPI for Rural Labourers (CPI-RL): For rural non-agricultural workers.
  4. CPI Combined: For urban and rural consumers.
  • Base Year: The latest base year is 2012 for CPI.

CPI-AL (Consumer Price Index for Agricultural Labourers):

  • A sub-category of CPI, specifically tracking the price changes of goods and services consumed by agricultural labour households.
  • Measures the cost of living for agricultural workers and serves as a benchmark for determining wages in schemes like MGNREGA.
  • Includes food items, clothing, housing, fuel, light, and other services.
  • Used to set rural wages and analyse inflationary trends affecting rural India.
Polity