MGNREGA wages are not in consonance with the rising cost of living, says parliamentary panel 

The Standing Committee on Rural Development has said the base rate of wages needs to be revised; the method of calculation using the base year of 2009-2010 is ‘obsolete and saturated’

A parliamentary panel made a strong case for increasing wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), arguing that the current wages were not in “consonance with the rising cost of living”, and urged the government to link it with an index commensurate with national inflation.

The committee that tabled its report on Tuesday (December 17, 2024) in both Houses of Parliament studied the wages paid under the programme since 2008. The Ministry of Rural Development in its submission to the panel argued that MGNREGA works are a “last resort” and a fallback option for workers. But the panel in its report noted that wages of such “nominal nature”, along with delayed payment, “only discourage them [workers] and propel them to migrate and seek work in areas giving better remuneration”.

Also read:Explained | The funding and demand for MGNREGA

In the financial year 2024-25, the average MGNREGA wage increased across India by ₹28 per day. In absolute terms, Haryana pays the maximum wage of ₹374 per day. The lowest MGNREGA wage is paid in Arunachal Pradesh and Nagaland, at ₹234 per day. 

The Rural Development Ministry announced the MGNREGA wage increase for the financial year 2023-24 on March 24, 2023. The wage increase ranged from 2%-10%.

The panel also noted with dismay that since inception of MGNREGA, the base rate for fixation of wages has remained unrevised. The Government of India notifies the wage rate under MGNREGA using Consumer Price Index for Agricultural Labour (CPI-AL), and by keeping the wage rates thus obtained on April 1, 2019 or ₹100, whichever is more, as the base for indexation for the States. Every year, wage rates are revised and notified by the addition of incremental value to the base rate on the basis of CPI-AL. “The Committee found this method of calculation using the base year of 2009-2010 obsolete and saturated,” the panel noted. 

The Ministry of Rural Development did not provide any concrete response to the panel’s question, and recommendation on revising the base rate. “Remaining silent on such a significant recommendation and bypassing it without giving specific reply undermines the sustained efforts being undertaken for the betterment of MGNREGA scheme,” the panel said. 

Published - December 17, 2024 06:57 pm IST