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Post at: Jun 28 2022

MGNREGS wages revised

Recent Context

  • THE CENTRE has recently notified fresh wage rates under rural job guarantee programme MGNREGS for financial year 2022-23.
  • The wage rates, notified by Ministry of Rural Development under sub-section (1) of Section 6 of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, will be effective from April 1.

Changes effected in Wages

  • Of the 31 states and UTs, which saw a hike in wages, the maximum 7.14 per cent has been recorded in Goa — from Rs 294 per day in 2021-22 to Rs 315 per day in 2022-23.
  • The lowest increase of 1.77 per cent is in Meghalaya where the new wage rate has been fixed at Rs 230 per day from the existing Rs 226 per day.
  • 21 out of 34 states and Union Territories got less than 5 per cent increase and 10 states got more than 5 per cent hike. 
  • There is no change in the wage rates of three states – Manipur, Mizoram and Tripura.
  • According to the new wage rates, five states and UTs with the highest NREGS wages are Haryana (Rs 331 per day); Goa (315); Kerala (311); Karnataka (309); and Andaman & Nicobar Islands (308). Five states with lowest NREGS wages are Tripura (212); Bihar (210); Jharkhand (210); Chhattisgarh (204); and Madhya Pradesh (204).
  • The NREGS wage rates stands at Rs 213 per day for both Uttar Pradesh and Uttarakhand.
  • The MGNREGA wage rates are fixed according to changes in the CPI-AL (Consumer Price Index-Agriculture Labour), which reflects the increase in the inflation in rural areas.

About MGNREGS

  • The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGS), also known as Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) is Indian legislation enacted on August 25, 2005. 
  • The MGNREGA provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage.
  • The Ministry of Rural Development (MRD), Govt of India is monitoring the entire implementation of this scheme in association with state governments.

Important Facts About MGNREGS

  • MGNREGA guarantees hundred days of wage employment in a financial year, to a rural household whose adult members volunteer to do unskilled manual work.
  • Within 15 days of submitting the application or from the day work is demanded, wage employment will be provided to the applicant.
  • Right to get unemployment allowance in case employment is not provided within fifteen days of submitting the application or from the date when work is sought.
  • Receipt of wages within fifteen days of work done.
  • Variety of permissible works which can be taken up by the Gram Panchayaths.
  • MGNREGA focuses on the economic and social empowerment of women.
  • MGNREGA provides “Green” and “Decent” work.
  • Social Audit of MGNREGA works is mandatory, which lends to accountability and transparency.
  • MGNREGA works address the climate change vulnerability and protect the farmers from such risks and conserve natural resources.
  • The Gram Sabha is the principal forum for wage seekers to raise their voices and make demands.
  • It is the Gram Sabha and the Gram Panchayat which approves the shelf of works under MGNREGA and fix their priority.

Challenges to MGNREGS

  • Ridiculously low wage rate: Currently, MGNREGA wage rates of 17 states are less than the corresponding state minimum wages.
  • Insufficient budget allocation: MGNREGS’s success at the ground level is subject to proper and uninterrupted fund flow to the states. Thrice in the last year and once this year, funds have dried up in states due to lack of “mother sanctions” from the Central government which hampers the work in peak season. Almost every year, more than 80 per cent of funds get exhausted within the first six months.
  • Regular payment delays: The Union Ministry of Rural Development considers wages paid once the FTO (Fund Transfer Order) is signed by the second signatory. However, delays take place even in the processing of signed FTOs, for which the Management Information System (MIS) does not calculate compensation.
  • Workers penalised for administrative lapses: The ministry withholds wage payments for workers of states that do not meet administrative requirements within the stipulated time period (for instance, submission of the previous financial year’s audited fund statements, utilisation certificates, bank reconciliation certificates etc).
  • The banking puzzle: The rural banks are highly de-capacitated in terms of staff and infrastructure and thus always remain hugely crowded. The workers normally have to visit the banks more than once to withdraw their wages. Due to great rush and poor infrastructure, the bank passbooks are not updated in many cases.
  • Faulty MIS data: The increase in corruption and weakening accountability has roots in the excessive dependence of implementation of MGNREGA on technology (real-time MIS being one of them).
  • Non-payment of unemployment allowance: There are a huge number of unemployment allowances being shown in the MIS currently. But inaction from the Central government in ensuring payments of the same has shown that the government wants to use the MIS as per its convenience and is not honouring its own database.
  • Genuine job cards being deleted to meet 100% DBT targets: Genuine job cards are being randomly deleted as there is a huge administrative pressure to meet 100 per cent Direct Benefit Transfer (DBT) implementation targets in MGNREGA.
  • Too much centralisation weakening local governance: A real-time MIS-based implementation and a centralised payment system has further left the  representatives of the Panchayati Raj Institutions with literally no role in implementation, monitoring and grievance redress of MGNREGA schemes. It has become a burden as they hardly have any power to resolve issues or make payments.
  • Administration not honouring local priorities: MGNREGA could be a tool to establish decentralised governance. But, with the administration almost dictating its implementation, it is literally a burden now for the people and especially for the local elected representatives. The governments always use the bottom-up people’s planning strategy to gain political mileage but never honour local priorities while implementing the schemes.

Way forward

  • No matter how good a program is, there is always scope for improvisation. For MGNREGA, the Centre must allocate more funds in the budget since the dearth of funds could lead to halting the work, thus causing the interruption.
  • Also, the laborers must be paid well in time. The entire scheme could be decentralized so as to make the working a lot better.
  • An increase in wages can help in making the scheme more successful. Also, the central government is now trying to include skill development in this scheme so as to increase the skilled labor in rural areas. 

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