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LATEST NEWS UPDATES | Two minds on job scheme tweak -Basant Kumar Mohanty

Two minds on job scheme tweak -Basant Kumar Mohanty

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published Published on Feb 10, 2015   modified Modified on Feb 10, 2015
-The Telegraph

New Delhi: The finance ministry has favoured a proposal to increase the "material" component in projects under the rural job guarantee scheme to facilitate the creation of durable assets.

The rural development ministry is, however, having second thoughts, although it had proposed the change in the labour-material ratio from 60-40 to 51-49 for projects under the Mahatma Gandhi National Rural Employment Guarantee Act.

The scheme, which seeks to provide 100 days of employment to every rural household a year, had come under criticism for poor asset creation.

Being a labour-intensive programme, projects like desilting of water bodies, embankment works, building of kuchha roads, check dams and watershed projects are undertaken under MGNREGA where the material component is less than 40 per cent.

Construction projects are not undertaken. The proposal to increase the material component is aimed at creating more durable assets like community halls and larger projects for community use.

Although the finance ministry has given its approval, the rural development ministry is not keen to immediately enforce the change in ratio. The reason, sources said, was that the material expenditure on projects was only 27 per cent, far less than the permissible limit.

The sources said the ministry was, therefore, going slow on its own proposal fearing a backlash from political parties and activists.

At a discussion in Parliament's winter session, all parties had criticised the proposal. Activists had said it would encourage involvement of private contractors in MGNREGA projects.

An assessment by a ministry official last August had suggested that about five crore rural households would be affected if the material component was raised to 49 per cent.

Once this is done, the availability of funds to pay wages will dip, leading to creation of fewer jobs. Over 200 crore man-days are now created under the scheme in a year; after the change in ratio, it would come down to about 136 crore man-days a year.

When Nitin Gadkari briefly held additional charge of rural development last year, he had suggested that the change in ratio should be implemented by amending Schedule-I of MGNREGA. His team had then sought the finance ministry's opinion.

The rural development ministry has also sought the finance ministry's opinion on an expert panel's recommendation that the revised MGNREGA baseline wage rate cannot be less than the minimum wage for agricultural labourers in a state.

The MGNREGA baseline rate is likely to be revised in the 2015-16 financial year. In 12 states, it is less than the minimum wage for agricultural labourers as of now.

The panel, headed by Mahendra Dev, has also suggested that the method of calculation of wage revision should be based on the consumer price index for rural labour instead of that for agricultural labour.


The Telegraph, 10 February, 2015, http://www.telegraphindia.com/1150210/jsp/nation/story_2551.jsp#.VNnN5S7xxpA


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