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MGNREGA pegged to inflation
Why in news?
- Due to slump in rural demand and a slowdown in the rural economy, center is to link wages under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to an updated inflation index, which will be revised annually.
More in news
- Recently, the Ministry of Statistics and Programme Implementation and the Labour Bureau informed the Rural Development Ministry that they had begun work to update the consumer price indices for rural areas (CPI-R) and agricultural labourers (CPI-AL) respectively.
- What the Govt has to say
(1) The consumption basket of CPI-AL [which determines MGNREGA wage revisions] has not been updated for more than three decades.
(2) But the rural consumption patterns have changed drastically by this time.
(3) The court directed the Union of India and the Jammu and Kashmir government to file their responses to petitions.
(4) Increased wages based on updated inflation indices might result in 10% higher government expenditure on the scheme.
(5) Wage rate revisions are notified at the beginning of a financial year, but the Ministry is trying implement it during the current year as part of a stimulus package to counter the ongoing slowdown.
- Concerns raised
(1) Whether the move will be sufficient to revive demand without increasing the scheme’s base pay rates, which are far below market rates in most States.
(2) According to the latest Periodic Labour Force Survey, market wages for men were higher than MGNREGA wages by 74% in 2017-18,while for women, there was a 21% gap.
(3) Even with existing wages, the scheme is running out of funds due to an increased demand for work.
(4) Last week, the RD Ministry asked the Finance Ministry for an additional supplementary grant of ₹15,000-₹20,000 crore.
- The MGNREGA received a budgetary allocation of Rs. 60,000 crore this year, of which more than 75% has already been released by the Centre even before the halfway point of the year.
- Droughts and floods in several States led to increased demand for work in the early part of the year.
Source
The Hindu