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NREG wages linked to CPI, register hefty hike

Janua ry 10, 2011 2:43:48 P M

Rakesh K Singh | New Delhi

The C entre on Thursday notified a substantial increase in wages under the National Rural Employment Guarantee (NREG) Scheme after taking the C onsumer Price Index for
Agricultural Labourers as the basis for wages under the flagship scheme.

Announcing the decision, Union Rural Development Minister C P Joshi said, “The notification for hike in NREG wages will be effective January 1, 2011, and the increase in
wages will be from 17 to 30 per cent.”

He said the move would benefit 5 crore NREG workers. The C onsumer Price Index for Agricultural Labourers has been taken as the basis for revision of the NREG wages
and would be revised every year, adjusting the index variation.

The base wage under the scheme will remain `100 and will be revised every five years. However, the actual wage will depend upon the C PI-AL. The wage rate revision will
lead to an additional burden of Rs 3,500 crore in the January-March quarter.

The decision, Joshi said, had been taken in view of recommendations by the National Advisory C ouncil, headed by Sonia Gandhi, and consultations within the Rural
Development Ministry and with other Ministries.

On whether there was a rift between the Government and NAC over linkage of NREG wages with inflation, Joshi said the hike had been effected in view of Sonia’s letter in
November to Prime Minister Manmohan Singh seeking linkage of NREG wage with the Minimum Wage Act.

The Rural Development Ministry is awaiting the report of Probir Sen C ommittee, constituted for creation of a separate wage index for NREG, and the increase in wages may
be further hiked if the panel so recommends. “The Sen C ommittee is expected to submit its report…..the (Rural Development) Ministry will consider the report it,” Joshi
added.

“The wage rates have been enhanced on the basis of C PI-AL, calculated on the basis of Rs 100 or actual wage rate, whichever is higher as on April 1, 2009. Linking the
wages under NREG will result in annual revision of wage rates,” Joshi said, adding that the Government would “not lag behind in providing adequate livelihood security to the
poor, downtrodden, SC s and STs”.

The Minister hoped that the new wage rates will go a long way in meeting the requirements of the poor in rural areas.

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