The Parliamentary Standing Committee on Rural Development and Panchayati Raj has recommended raising wage rates at the earliest under the flagship Mahatma Gandhi National Rural Employment Guarantene Scheme (under MGNREG Act). It has also asked the ministry to explore the feasibility of revising the base year and base rate of the MGNREGA wage.

“The Committee once again recommend that Department of Rural Development (DoRD) should take a considered view on the pertinent issue of suitable increase in the wage rates under MGNREGA and increase the wage rates at the earliest for benefitting MGNREGA beneficiaries in a befitting manner,” the panel said in the report tabled in Lok Sabha.

Pointing out that the daily wages paid under the flagship rural employment scheme are inadequate and not in consonance with the rising cost of living, the panel told the government that in order to sort out the issue of lower wage rates, maybe through a revision of base year to a more closer time line along with increase in the base rate from ₹100/day, it can be achieved.

“The Committee find this method of calculation using the base year of 2009-10 obsolete and saturated to yield any desired figure commensurate with the present inflation and increased cost of living,” the report said.

The government notifies the wage rate under MNGREGA using Consumer Price Index for Agricultural Labour (CPI-AL) and by keeping the wage rates thus obtained on April 1, 2009 or ₹100 whichever is more as the base for indexation for the States. Every year, wage rates are revised and notified by addition of incremental value to the base rate on the basis of CPI-AL. According to DoRD, this inflation is being accounted for based on the base rate of 2009.

However States are allowed to provide wage over and above the wage rate notified by the Centre. There are three such states which top-up the wage from their own funds and Odisha pays the highest ₹115/day extra to make the wage at ₹352/day for MGNREGA workers, which is a tad lower than Haryana’s ₹357.

The committee finds the range of wages vary from as little as ₹221 in Madhya Pradesh and Chhattisgarh, ₹224 in Arunachal Pradesh, ₹228 in Bihar and Jharkhand to ₹303 in Punjab and ₹357 in Haryana.

The DoRD in its reply to the panel has said, “As of now, at this point, there is no other mechanism that we are following. Whatever suggestions have been given here in this regard, we will bring them to the notice of the government, examine them and see what best can be done about them.”

Further, it also said, “whether we take CPI-AL or CPI-RL, it does not make much difference. One thing which does make difference is the base rate. That should be revised periodically. But it has not happened. A conscious decision has been taken so far not to do that.”

For protecting the wage against the inflection it has been decided to index the wage rate notified under Mahatma Gandhi NREGA to the Consumer Price Index for Agricultural Labour (CPI-AL) while maintaining the distinction between the notified wage rate under the Mahatma Gandhi NREGA and the minimum wage Act, the government said.

The panel has said that that DoRD should adopt a much more economically viable method in identifying ways and means for the selection of an appropriate index (other than CPI-AL and CPI-RL) which cater to the need of the hour for the positive revision of wage rates under MGNREGA according to the prevailing inflationary trend.