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LATEST NEWS UPDATES | Job scheme boosts rural household income 74% by Sandip Das

Job scheme boosts rural household income 74% by Sandip Das

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published Published on Aug 10, 2010   modified Modified on Aug 10, 2010


The employment guarantee scheme has resulted in a big spurt in not only wages but also household income in the rural areas, an analysis of the data since the beginning of the programme in 2006-07 show. While rural wages have risen 38% since 2006-07, household income saw a 74% increase in the four years up to 2009-10.

This is despite the fact that just 13% of the 5 crore beneficiary families worked for 100 days or more under the scheme in last fiscal.

According to a rural development ministry official, the average daily wage paid under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) increased from Rs 65 in 2006-7 to Rs 90 at present, a stiff increase of more than 38%.

Correspondingly, average household annual income has increased from Rs 2,795 in 2006-07 to Rs 3,150 in 2007-08 and to Rs 4,860 in 2009-10 under this flagship programme of the UPA government. As per the ministry data, the national average for number of days of employment availed under the mega job guarantee programme has increased from 42 days during 2007-8 to 54 days during 2009-10.

The government renamed National Rural Employment Guarantee Act (NREGA) to MGNREGA in October 2009, four years after NREGA was introduced. The job guarantee scheme has already provided an average 24 person days per family this fiscal which is going to increase during the next few months after sowing of kharif crop is completed.

“This has definitely provided additional income to rural households, which in turn has increased their purchasing power,” Ramesh Chand, director, National Centre for Agricultural Economics and Policy Research (NCAP), told FE.

This comes at a time when the UPA government is grappling with rise in food inflation, which had led to rise in price of essential agricultural commodities.

However, many analysts have stated that due to rise in MGNREA wage, the agricultural wage rates in various parts of the country has also increased significantly since the launch of the mega programme in February 2006.

“Due to MGNREGA, rural landless laborers are given fair agricultural daily wage,” rural development minister CP Joshi said

Echoing similar view, PK Joshi, director of Hyderabad-based National Academy of Agricultural Research Management (NAARM) said while agricultural input costs have increased because of higher wage given under job guarantee scheme, “it has given a boost to rural economy on a whole.”

In a notification issued in January 1, 2009, the government had specified that it would pay states the minimum wage rate for agricultural labourers under Minimum Wages Act, 1948 prevailing at the states in December 2008.

Subsequently, many states, including Karnataka, Andhra Pradesh, Punjab, West Bengal, Madhya Pradesh, Tripura and Himachal Pradesh, revised their minimum wage rate for agricultural labourers and asked the rural development ministry to amend the notification to bring out parity with their revised wage.

During the presentation of union budget in February last year, finance ministry Pranab Mukherjee had announced a cap of Rs 100 as daily wage under MGNREA.

“The cap of Rs 100 as daily wage would stop states from further hiking agricultural wage rate and help in fiscal planning,” the rural development ministry official had earlier said.

With the prices of essential commodities rising, the government is considering a proposal to link the wage payment under MGNREGA to consumer price index..Since its launch in 2006, the government has allocated more than Rs 50,000 crore for implementation of MGNREGA.


The Financial Express, 9 August, 2010, http://www.financialexpress.com/news/Job-scheme-boosts-rural-household-income-74-/657757/


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