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NEWS ALERTS | Forget minimum wages, MGNREGA workers not even receiving notified wages in many states
Forget minimum wages, MGNREGA workers not even receiving notified wages in many states

Forget minimum wages, MGNREGA workers not even receiving notified wages in many states

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published Published on May 31, 2022   modified Modified on Jun 2, 2022

Every year in the month of either February or March, the Ministry of Rural Development (MoRD) announces the notified MGNREGA wage rates (i.e., notified daily wage rates for MGNREGA workers) for various states and Union Territories (UTs) for the upcoming financial year. The MGNREGA rates are notified every year based on the increase in Consumer Price Index for Agricultural Labourers (CPI-AL).

Like the previous years, in 2021 too, experts and civil society organisations (CSOs) expressed their dismay over the meagre rise in the notified wage rates. The notified MGNREGA wages for various states/ UTs in 2021-22, released by the Union Government on 15th March, 2021, faced criticism from civil society activists. According to a press release by NREGA Sangharsh Morcha (a network of social activists working on MGNREGA workers' rights) dated 18th March, 2021, the increase in notified MGNREGA wage rates for FY 2021-22 was extremely meagre. There was no increase in Kerala’s notified MGNREGA wage rate in comparison to FY 2020-21. The state of Rajasthan’s notified wage rate increased by just Re 1 between FYs 2020-21 and 2021-22. In fact, for 24 states, the increase in the MGNREGA wage rate was less than 5 percent.

Another press release by NREGA Sangharsh Morcha dated 1st April, 2018 clearly mentioned that the notified wage rates did not increase for some of the poorest states of the country i.e., Bihar, Jharkhand and Uttar Pradesh. For 27 states and Union Territories, the notified MGNREGA wage rates were lower than the corresponding minimum wages for unskilled agricultural labourers.

It should be noted that the actual MGNREGA wages are paid for piece rate work with fixed Schedule of Rates (SoRs) for work, which is measured and only then payment is made (please click here to access the Nagesh Singh Committee draft report on alignment of MGNREGA wages with minimum agricultural wages, submitted to the MoRD in July, 2017). A MGNREGA worker is expected to perform an 8-hour work day with 7 hours of work and one hour of rest.

The Inclusive Media for Change team has made an attempt in this news alert to see whether the average wage paid to the MGNREGA workers as per measurement pattern was at par with the notified wage rate for such workers in a state for a particular year. From the nominal wages paid to MGNREGA workers as per measurement pattern in various months, the average annual nominal MGNREGA wage rate is calculated for a state in a particular financial year. The 29 states chosen for the final analysis are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Punjab, Rajasthan, Sikkim, Tamil Nadu, Telangana, Tripura, Uttar Pradesh, Uttarakhand and West Bengal. The data on wages paid to MGNREGA workers as per measurement pattern is available from 2014-15 onwards on MIS-MGNREGA website. The data from R7.2.1 (i.e., Average wage paid pattern during the year) have been used. The analysis covers the FYs 2014-15, 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22. 

For Himachal Pradesh, the average of the notified wage rates in Scheduled Areas and non-Scheduled Areas have been calculated for each of the years from FY 2014-15 to FY 2021-22. The calculated average wage rate has been considered as the notified wage rate for Himachal Pradesh in this news alert.  

For Sikkim, the average of the notified wage rates in Sikkim and Sikkim (3 Gram Panchayats named Gnathang, Lachung and Lachen) have been calculated for 2020-21 and 2021-22. The calculated average wage rate has been considered as the notified wage rate for Sikkim during those two years.
  
Are the MGNREGA workers getting the notified wage rates?

In the FY 2021-22, the gaps between notified wage rate and the average wage rate paid as per measurement pattern were negative in 3 states, positive in 19 states and zero in 7 states. The notified MGNREGA wage rate was greater than the average wage rate paid as per measurement pattern by a significant margin in Andhra Pradesh (Rs. 32.4), Chhattisgarh (Rs. 10.6), Gujarat (Rs. 19.40), Himachal Pradesh (Rs. 26.4), Madhya Pradesh (Rs. 7.5), Maharashtra (Rs. 9.1), Odisha (Rs. 5.60), Punjab (Rs. 5.90), Rajasthan (Rs. 37.1), Sikkim (Rs. 51.7), Tamil Nadu (Rs. 60.0), Telangana (Rs. 66.20), Tripura (Rs. 21.30), and West Bengal (Rs. 10.40).

In the FY 2020-21, the gaps between notified wage rate and the average wage rate paid as per measurement pattern were negative in 4 states, positive in 19 states and zero in 6 states. The notified MGNREGA wage rate was greater than the average wage rate paid as per measurement pattern by a significant margin in Andhra Pradesh (Rs. 10.92), Chhattisgarh (Rs. 8.83), Gujarat (Rs. 21.58), Himachal Pradesh (Rs. 26.08), Madhya Pradesh (Rs. 11.17), Maharashtra (Rs. 10.08), Punjab (Rs. 5.08), Rajasthan (Rs. 46.50), Sikkim (Rs. 49.58), Tamil Nadu (Rs. 62.67), Telangana (Rs. 57.42), Tripura (Rs. 18.33), and West Bengal (Rs. 9.83).

In the FY 2019-20, the gaps between notified wage rate and the average wage rate paid as per measurement pattern were negative in 3 states, positive in 19 states and zero in 7 states. The notified MGNREGA wage rate was greater than the average wage rate paid as per measurement pattern by a significant margin in Andhra Pradesh (Rs. 7.83), Chhattisgarh (Rs. 6.92), Gujarat (Rs. 16.0), Himachal Pradesh (Rs. 23.75), Madhya Pradesh (Rs. 8.58), Rajasthan (Rs. 48.75), Tamil Nadu (Rs. 55.83), Telangana (Rs. 39.58), Tripura (Rs. 12.50), and West Bengal (Rs. 10.08).

In the FY 2018-19, the gaps between notified wage rate and the average wage rate paid as per measurement pattern were negative in 4 states, positive in 17 states and zero in 8 states. The notified MGNREGA wage rate was greater than the average wage rate paid as per measurement pattern by a significant margin in Andhra Pradesh (Rs. 7.25), Gujarat (Rs. 17.00), Himachal Pradesh (Rs. 24.25), Madhya Pradesh (Rs. 5.50), Maharashtra (Rs. 5.33), Punjab (Rs. 6.08), Rajasthan (Rs. 51.67), Tamil Nadu (Rs. 50.67), Telangana (Rs. 39.92), Tripura (Rs. 10.08), and West Bengal (Rs. 15.33).

In the FY 2017-18, the gaps between notified wage rate and the average wage rate paid as per measurement pattern were negative in 6 states, positive in 18 states and zero in 5 states. The notified MGNREGA wage rate was higher than the average wage rate paid as per measurement pattern by a significant margin in Andhra Pradesh (Rs. 34.17), Gujarat (Rs. 11.67), Himachal Pradesh (Rs. 24.83), Madhya Pradesh (Rs. 6.17), Maharashtra (Rs. 8.33), Punjab (Rs. 6.08), Rajasthan (Rs. 50.0), Tamil Nadu (Rs. 47.33), Telangana (Rs. 46.58), Tripura (Rs. 7.67), and West Bengal (Rs. 9.17).

In the FY 2016-17, the gaps between notified wage rate and the average wage rate paid as per measurement pattern were negative in 5 states, positive in 16 states and zero in 8 states. The notified MGNREGA wage rate was higher than the average wage rate paid as per measurement pattern by a significant margin in Andhra Pradesh (Rs. 48.08), Gujarat (Rs. 15.42), Himachal Pradesh (Rs. 22.33), Madhya Pradesh (Rs. 10.08), Rajasthan (Rs. 49.83), Tamil Nadu (Rs. 62.0), Telangana (Rs. 47.58), and Tripura (Rs. 7.00).

In the FY 2015-16, the gaps between notified wage rate and the average wage rate paid as per measurement pattern were negative in 6 states, positive in 19 states and zero in 4 states. The notified MGNREGA wage rate was higher than the average wage rate paid as per measurement pattern by a significant margin in Andhra Pradesh (Rs. 48.33), Chhattisgarh (Rs. 5.33), Gujarat (Rs. 20.17), Himachal Pradesh (Rs. 21.75), Madhya Pradesh (Rs. 8.50), Rajasthan (Rs. 53.50), Tamil Nadu (Rs. 49.33), Telangana (Rs. 50.92), and Tripura (Rs. 8.42).

In the FY 2014-15, the gaps between notified wage rate and the average wage rate paid as per measurement pattern were negative in 5 states, positive in 21 states and zero in 3 states. The notified MGNREGA wage rate was greater than the average wage rate paid as per measurement pattern by a significant margin in Andhra Pradesh (Rs.47.75), Gujarat (Rs. 16.25), Himachal Pradesh (Rs. 20.17), Madhya Pradesh (Rs. 6.83), Mizoram (Rs. 70.83), Rajasthan (Rs. 47.92), and Tamil Nadu (Rs. 41.67).

In each of the years from FY 2014-15 to FY 2021-22, the notified MGNREGA wage rate on an average was greater than the average wage rate paid at the aggregate level.

Please click here to access the data related to the analysis by Inclusive Media for Change.

A similar exercise carried out by Accountability Initiative and Centre for Policy Research in various years has also found that the actual wages paid remained below the notified wage rates for most states (please click here and here to access)

According to Vijay Ram S, who is a researcher with People’s Action for Employment Guarantee (PAEG), a group dedicated to research, advocacy and public intervention in the domain of MGNREGA, "the main reason for this is that the MGNREGA wages paid per day is calculated by the State Governments using local authorities based on the fixed quota of work that has been completed on that particular day. Lower than the notified wage rates are paid in some cases because workers are unable to complete this quota. But the major causes are either the quota that is fixed is too much to be completed within a workday or the local government functionaries want only to show that the quota has not been completed. This could be happening to save money either at the local or the State Government levels, given the declining amount of funds being sanctioned for MGNREGA, and to extend the number of days of work provided. A crucial reason why the average MGNREGA wage rates have to be increased and have to be on par with the minimum wages is because the wages that the workers receive will increase at least relatively to the average wages they are receiving at present."

He also cautioned Inclusive Media for Change that "the average wage rate listed in the MIS report R7.1.2 (i.e., Outlays and Outcomes) is the most accurate average wage rate (i.e., Average wage per persondays). It is calculated on the basis of per 8 hours of work, and not as a function of the number of workers and persondays of work. One can notice that the final figures in R7.1.2 (i.e., Outlays and Outcomes) are slightly different from the corresponding figures of R7.2.1 (i.e., Average wage paid pattern during the year), as the latter doesn't adjust for differences in the number of days in each month."

The background story behind the wage policy change over the years

A document prepared by the MoRD tells us that the job guarantee scheme has dual provisions relating to wage payments -- while section 6(1) of the MGNREGA provides for the Union Government to notify the wage rate, Section 6(2) of the Act allows for the State Governments to notify the wage rate. The Union Government is responsible for meeting the full cost of wages of unskilled workers employed under the programme.

Up till 2009, Section 6(2) was implemented wherein the minimum wage was fixed by the State Government as per Section 3 of the Minimum Wages Act, 1948 for unskilled agricultural labourers. This used to be notified as the MGNREGA wage rate in the respective states. 

From 1st January, 2009 onwards, Section 6(1) of the MGNREG Act has been applied with the Union Government revising the notified MGNREGA wage rates for all states annually (as said earlier). Following this, from 1st January, 2011, the notified MGNREGA wage rates have been indexed to the CPI-AL. The revisions done annually are based on this index.

Anything higher than the wage rate notified by the Union Government is to be paid by the State Governments from their own budget. So, if a State Government notifies a higher wage rate in comparison to the one notified by the Union Government under Section 6(1), then the difference in wage rate is to be paid by the State Government. There are several such states who opt for this method depending on the parity with state minimum wage legislations and requirement for extra support in terms of enhanced wages in times of drought.

The State Government is responsible for linking the wages, without any gender bias, with the quantity of work done. The wages shall be paid, fixed after time and motion studies for various types of work and different seasons, and revised periodically. The SoRs of wages for various unskilled labourers is fixed so that an adult person who has worked for eight hours, which includes an hour of rest, will earn a wage equal to the stipulated wage rate. 

According to a primer prepared by Social and Political Research Foundation (https://sprf.in/), a solution-oriented think tank based in New Delhi, a straightforward reading of the Section 6(1) of the MGNREG Act conveys that the Union Government can fix MGNREGA wage rate, which is lower than the minimum wage prescribed for the area by a State Government.  

The Prof. S Mahendra Dev Committee final report on MGNREGA wage rate indexation, submitted to the MoRD in 2014, had recommended that the MGNREGA wage rate should not be lower than the minimum wage prescribed by the State Government for unskilled agricultural labourers. However, the Nagesh Singh Committee draft report on alignment of MGNREGA wages with minimum agricultural wages, submitted to the MoRD in July, 2017, opined that "there is no compelling argument for convergence of minimum wages for agricultural labour and wages notified for MGNREGA workers in view of the differences in activities performed by these two set of workers which have been enumerated above." Justifying the divergence of the MGNREGA rates with the minimum wage rate, it gave three following reasons --

There exists a difference in the duration of time put in by farm workers (9 hours, which includes 1 hour of rest) and the duration of work by MGNREGA workers (8 hours, which includes 1 hour of rest)

The SoRs for minimum wage of agricultural labourers vary widely across states; and 

The MGNREGA wage rates are strictly enforced, although the minimum wages are not done so everywhere.   

The rationale for minimum wages, and in its absence, better notified wages 

Despite recommendations of government-appointed committees to link MGNREGA wages with state minimum wages (by the Mahendra Dev Committee) and to index the wage rate to Consumer Price Index - Rural (CPI-R) instead of Consumer Price Index – Agricultural Labourers (CPI-AL) (by the Nagesh Singh Committee), or Rs. 375 per day as of July 2018 as recommended by the Anoop Satpathy Committee, the Union Government has not implemented them, says a joint press release by NREGA Sangharsh Morcha network and People’s Action for Employment Guarantee (PAEG) dated 31st March, 2022. Despite these recommendations, the meagre increase in MGNREGA wage rates has not been proportional to the increase in consumer price inflation in rural areas and the rise in cost of living during the past few years.

According to the joint press note dated 31st March, 2022, an increase in MGNREGA wages, since it is a base wage, will also lead to an upward pressure on rural and subsequently urban industrial wages. A major hike in the notified MGNREGA wage rate for a state is likely to enhance rural expenditure, leading to an increase in aggregate demand in the economy, which is crucial for its recovery.

An exercise done (please click here and here to access) by Inclusive Media for Change earlier found that in 2020-21, the growth (over previous year) in average daily wage rates in real terms for rural agricultural labourers (male only) was negative in Andhra Pradesh, Bihar, Gujarat, Haryana, Himachal Pradesh, Kerala, Meghalaya, Punjab, Tamil Nadu, Tripura, and West Bengal. Uttar Pradesh experienced zero percent growth rate. In the same year, the growth (over previous year) in average daily wage rates in real terms for rural non-agricultural labourers (male only) was negative in Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh, Kerala, Meghalaya, Punjab, Tamil Nadu, Tripura, Uttar Pradesh, and West Bengal. In 2020-21, the growth (over previous year) in average daily wage rates in real terms for rural construction workers (male only) was negative in Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Kerala, Maharashtra, Manipur, Odisha, Punjab, Rajasthan, Tamil Nadu, Tripura, Uttar Pradesh, and West Bengal. Jammu and Kashmir faced zero percent growth rate.

[Inclusive Media for Change is grateful to NREGA Sangharsh Manch for providing the data on notified MGNREGA wage rates (for various states) of past years.]

References: 

Average MGNREGA wage paid as per measurement pattern, Various years, Management Information System (MIS), Ministry of Rural Development (MoRD), please click here to access    

Notified MGNREGA Wage Rates FY 2021-22, Ministry of Rural Development (MoRD), please click here to access

Notified MGNREGA Wage Rates FY 2020-21, MoRD, please click here to access

Notified MGNREGA Wage Rates FY 2019-20, MoRD, please click here to access

Notified MGNREGA Wage Rates FY 2018-19, MoRD, please click here to access

Notified MGNREGA Wage Rates FY 2017-18, MoRD, please click here to access

Notified MGNREGA Wage Rates FY 2016-17, MoRD, please click here to access

Notified MGNREGA Wage Rates FY 2015-16, MoRD, please click here to access

Notified MGNREGA Wage Rates FY 2014-15, MoRD, please click here to access

Nagesh Singh Committee draft report on alignment of MGNREGA wages with minimum agricultural wages, submitted to the Ministry of Rural Development in July, 2017, please click here to access 

Prof. S Mahendra Dev Committee final report on MGNREGA wage rate indexation, submitted to the Ministry of Rural Development in 2014, please click here to access  

Report of the Expert Committee on Determining the Methodology for Fixing the National Minimum Wage, Ministry of Labour and Employment, January 2019, please click here to access

MGNREGA 2005: The journey of a decade, Ministry of Rural Development, please click here to access

MGNREGA: A Primer, prepared by Apurav Maggu, Siddharth Seem and Anhad Hundal, Published in April 2019, Social and Political Research Foundation, please click here to access

Budget Briefs on MGNREGS, prepared by Accountability Initiative and Centre for Policy Research, various years, please click here and here to access

Joint Press Note released by NREGA Sangharsh Morcha network and People’s Action for Employment Guarantee (PAEG) dated 31st March, 2022, please click here and here to access  

Press release by NREGA Sangharsh Morcha dated 18th March, 2021, please click here and here to access  

Press release by NREGA Sangharsh Morcha dated 1st April, 2018, please click here and here to access 

News alert: Real wage rates of the rural workers hardly increased during the last 6 years, Inclusive Media for Change, Published on 11th March, 2022, please click here to access


Image Courtesy: MKSS India



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