What are the Reasons Behind Government Linking MNREGA Wages to Inflation?

The Government of India will link wages under the employment guarantee law with inflation that threatens rising food prices but resist the need to combine them with lower wages.

The minimum wage under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) will increase between 17% and 30%. 100 per day from January 1. This will require an additional expenditure of Rs 3,500 million in the current year for Agricultural workers. This is the main and most important objective of the Government Linking MNREGA Wages To Inflation. The industry fears that the move will lead to higher wages for workers and that workers will fall sharply, while economists fear prices.

What is MGNREGA?

The most accurate answer to what is MGNREGA is that it was established with the aim of “enhancing the security of livelihoods in rural areas by giving at least a hundred days of guaranteed employment in the financial year, throughout the home whose senior members volunteer to do unskilled craftsmanship”. Rental must be provided within 5 km from where the applicant resides, and a minimum wage should be paid. If the job is not provided within fifteen days of application, applicants are eligible for the unemployment benefit. Thus, employment under MGNREGA is a legal right.

MGNREGA will be mainly used for gram panchayats (GPs). Contractor involvement is prohibited. Jobs that require a lot of labour, such as building water harvesting infrastructure, drought prevention and flood control, are preferred.

In addition to providing economic security and creating rural resources, NREGA can help protect the environment, empower rural women, reduce rural and urban migration and promote social equity, among others.

History of MGNREGA :

MGNREGA was proposed by the former Prime Minister of India P.V. Narasimha Rao in 1991, After a few sessions, the action was finally approved by Parliament, and implementation began in 625 Indian states. On the basis of this basic experience, NREGA has been introduced in all regions since April 1, 2008. The Indian Government has called this action “the largest and most ambitious program for public safety and public works in the world.” The World Bank coined the term ‘outstanding role model for rural development in relation to MGNREGA.

Government Linking MNREGA Wages To Inflation :

On September 18, 2019, the Institute decided to invest additional money in the main Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) by linking wages under the Act to the revised inflation index, which will be reviewed annually. Implementation of the Program and the Department of Labour have begun the process of revising consumer prices in rural areas (CPI-R) and agricultural workers (CPI-AL). The index is used to determine minimum wages and those for the Government’s rural development program. Under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

Objectives of the Government Linking MNREGA Wages To Inflation :

The main objectives of the Government in Linking MNREGA Wages To Inflation are to address the economic downturn, increasing wages, thereby increasing purchasing power and revitalising rural demand.

What is the need for the Government Linking MNREGA Wages To Inflation?

Following are the reasons for What is the need for the Government Linking MNREGA Wages To Inflation?

Wage Gap: MGNREGA’s national average wage is 178.44 per day, less than half the Rs.375 minimum wage per day recommended by the Department of Labor. According to a recent Periodic Labor Force study, men’s market earnings were higher than MGNREGA earnings by 74% in 2017-18, and for women, the gap was 21%.

Major Changes in Rural Uses Pattern Over Time: The CPI-AL utilisation basket (which determines MGNREGA wage reviews) has not been reviewed for more than three decades, and patterns of rural use have changed significantly since then.

Spending on Less in Food: Food items make up more than two-thirds of the CPI-AL used a basket, but rural workers today spend a very small percentage of their money on subsidised food, as well as a growing amount on health education and transportation costs.

Conclusion 

The new change will look at major changes in the spending basket over the past three decades and could lead to a review of MGNREGA wage increases and lower wages to be determined under the Remuneration Code which will be very beneficial for rural people. If it meets the objective of the Government Linking MNREGA Wages To Inflation, The minimum wage under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) will increase between 17% and 30% by 100 rs per day.