Wages of NREGS hiked by 6%

The Union government has proposed to hike the wages of NREGS workers by 6%. They have dropped the new wage calculation formula.

Flash points

• The government appointed a committee to revise the wage calculation formula for the MGNREGA workers
• According to the new recommendations, the wages will be calculated on CPI-rural index
• The current scheme of wages is based on the agricultural labour index
• It is said by officials that the new scheme will help the workers to combat with the spiking prices due to inflation
• However this will cost an additional 2000 crore rupees for the government
• Hence hey have dropped the new wage scheme and hiked the wages by 6%

MGNREGA Scheme

• This scheme was started by the UPA government in 2005 to provide work to the unemployed households of rural areas
• The NDA government increased the working days from 100 to 150
• They allotted 38,500 crores this fiscal for MGNREGA
• However the drawback of this scheme is the varying minimum wages in different states
• For example in Kerala it is 500 and in states like Bihar it is below 170
• The new wages scheme might have brought the differences closer
• But the finance ministry sought further clarification and currently proposed a mere hike of 6%

Points to Know

• MGNREGA – Started in April,2006 in 200 districts
• It is the largest rural employment scheme in the world
• Committee to revise wages headed by Mahendra Dev