Context

The wage rates of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) workers for the financial year 2022–23 were notified recently.

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Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

  • MGNREGA is a social security act launched in 2005.
  • The Act was earlier named the “National Rural Employment Guarantee Act”.
  • The mandate of the Act is to provide a minimum of 100 days of guaranteed wage employment in a financial year to every rural household where adult members volunteer to do unskilled manual work.
  • The core objectives of the MGNREGA include:
    • Providing a minimum of 100 days of unskilled manual work as guaranteed employment in a financial year, which results in the creation of productive assets of prescribed quality and durability
    • Secure the livelihood resource base of the poor
    • Ensure social inclusion 
    • Empowering Panchayati Raj Institutions

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MGNREGA Wage Rates

  • According to the sub-section (1) of Section 6 of the MGNREGA, 2005, the Union government fixes the state-wise wage rates for unskilled manual workers, who work under the rural job guarantee scheme.
  • The MGNREGA wage rates are fixed based on the changes in the Consumer Price Index-Agriculture Labour (CPI-AL) which estimates the rise in the inflation levels in the rural areas.

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Wage Rates for FY 2022-23  

  • The wage rate for FY 2022-23 was notified by the Ministry of Rural Development.
  • 21 out of 34 states and Union Territories have got less than a 5% increase and 10 states have received over a 5% increase. 
  • There has been no change in the wage rates for Manipur, Mizoram and Tripura.
  • The highest hike in wage rate was seen in Goa (7.14%).
  • The lowest hike in wage rate was seen in Meghalaya (1.77%).
  • The average increase in wages is between Rs.4 to Rs.21 across the country.
  • After the introduction of the new wage rates: 
    • The states with the highest MGNREGA wages are Haryana (Rs. 331/day), Goa (315), Kerala (311), Karnataka (309) and Andaman & Nicobar Islands (308). 
    • The states with the lowest MGNREGA wages are Tripura (212), Bihar (210), Jharkhand (210), Chhattisgarh (204) and Madhya Pradesh (204).

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Criticism

  • The notification of the wage rate is regarded as arbitrary as it was announced with only three days remaining for the beginning of the next financial year. 
    • The delay in the announcement hinders discussions or debates on the wage rates.
  • The meagre increase in the wage rates has not been proportional to that of inflation and the cost of living in recent years.
  • Critics feel that by announcing very little increase in the wage rates, the government is ignoring the rural employment guarantee programme.
  • The average hike in the wage rates across the states is a meagre 4.25% when compared to the 31% increase in the dearness allowance (DA) for government employees.
  • Also, critics point out that the government revises the DA for its employees twice a year and pays thousands of crores for it but ignores the MGNREGA workers.
  • A lower increase in the wage rate at a time when the country is experiencing an employment crisis will further hinder the growth of the rural economy. 
  • There has been an increase in job loss for millions across the country due to the pandemic and an increase in the instances of reverse migration which has aggravated the pressure on the rural economy; in this context, the meagre or no significant hike in wage rates for MGNREGA works offers no relief.
  • It is criticised that the governments spend more on populist schemes rather than on initiatives that positively impact the labour markets and wage rates.
  • The government has failed to implement the recommendations of various committees such as,
    • Mahendra Dev Committee – bring the MGNREGA wages on par with the state minimum wages.
    • Nagesh Singh Committee – the use of Consumer Price Index-Rural Labourers (CPI-RL) instead of the CPI-AL.
    • Anoop Satpathy Committee – fixing the minimum wages at Rs. 375/day.

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Way forward

  • There should be an increase in the MGNREGA wages, as it will in turn lead to increased rural and urban industrial wages. 
  • The increase in the wage rates will also further increase the rural expenditure and boost the aggregate demand in the economy, which is critical for economic recovery.
  • The government must obey the Supreme Court’s rulings which have repeatedly upheld minimum wages as a fundamental right and equated payment of anything less to the status of “forced labour.” 
  • As the low budgetary allocations and unremunerative wages have pushed several rural workers away from the programme, the government must take immediate actions to address these challenges associated with the initiative.
  • Lastly, the implementation of the MGNREGA should continue as a demand-driven programme as it was intended with the true spirit of guaranteeing jobs to rural households.

Gist of Economic & Political Weekly (EPW) For UPSC IAS Current Affairs Preparation

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