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LATEST NEWS UPDATES | Rural wage blow looms -Basant Kumar Mohanty

Rural wage blow looms -Basant Kumar Mohanty

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published Published on Mar 15, 2018   modified Modified on Mar 15, 2018
-The Telegraph

New Delhi: The national rural job scheme is set to witness the lowest wage revision since the project was launched.

The Union finance ministry is learnt to have rejected a proposal to change the formula for revising the wage rate for 2018-19 under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for 2018-19.

The rates in 10 states, including Bihar, Jharkhand, Uttar Pradesh and Uttarakhand, are expected to remain unchanged, sources said.

In most other states, the rate of increment is expected to be lower than that of the previous years, sources said.

Nearly 10 million rural workers are card holders under the scheme which provides for up to 100 days of unskilled work in a year. The rural development ministry bears the entire wage bill and 60 per cent of the material cost for any project taken up under the scheme.

Since 2008, the wage rate was being revised on basis of the Consumer Price Index -Agricultural Labourer (CPI-AL).

However, following the recommendations of two committees, the rural development ministry had sought the approval of the finance ministry to link the wage rate to CPI-Rural for the respective state.

Under the CPI-AL, higher weightage is given to food prices while the CPI-Rural gives higher weightage to clothing, education, transport and communication.

The CPI-AL for December is compared to that of the same month in the previous year and the change is taken as the index.

In December, since crops are harvested, vegetable prices usually rule low, official sources said. The CPI-AL change in 2017 is negative in 10 states in 2017.

But the rural development ministry had issued a notification earlier saying that the MGNREGA wage rate could not be less than the previous year. Hence the government has to honour the wage rate of last year.

The average for the whole year is taken as the index for the CPI-Rural, which gives less weightage to food prices. The CPI-Rural index is on the positive side in all the states, the sources said.

If the CPI-Rural index is followed, the rural development ministry will have to spend an additional Rs 1,400 crore on the wage bill.

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The Telegraph, 15 March, 2018, https://www.telegraphindia.com/india/rural-wage-blow-looms-215813


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