Finance ministry asked for clarification

Oct 18, 2010 - Amit Agnihotri |

New Delhi

Under pressure from civil society groups to increase the wages of the MGNREGA workers, the rural development ministry has sought clarification from the finance ministry on the issue. Sources said following queries from the Pronab Sen Committee, set up by the government to create a separate index for MGNREGA wages, the rural development ministry has asked the finance ministry to clarify two points.
The rural development ministry wants to know if the wage hike would be on an all-India basis or would be state-specific. The ministry also wants to know whether the declaration of the new wage rate would be a one-time exercise or it would apply for all times to come. “We have sought the opinion of the department of expenditure under the finance ministry as the issue has financial implications,” said a senior official in the rural development ministry.
Though the move seems to be a positive one towards hiking the MGNREGA wages, currently at Rs 100 per day, the official could not clarify by what percentage the wages may actually go up. “Let us wait for the Pronab Sen panel recommendation,” said an official. Following finance minister Pranab Mukherjee’s statement in 2009 to provide real wages to MGNREGA workers, members of civil society groups including NAC member Aruna Roy and development economist Jean Dreze have been pushing the case.
The two asked the rural development ministry link the MGNREGA wages with the Consumer Price Index for Agricultural Labourers (CPIAL).
The activists argued that high inflation in the past one-and-a-half year has been eating into the income of the poor and it should be factored in the MGNREGA wages so that the real value of the wage is at least Rs 100 per day at 2009 prices.
“As long as MGNREGA wage rate is set by the Central government, it should be promptly revised upwards every six months,” the activists added.

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