Context:
Parliamentary Standing Committee on Rural Development and Panchayati Raj tabled a report raising serious concerns about the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) wage rates.
Determination of MGNREGA Wage Rates:
- Legal Provisions (Section 6 of MGNREGA Act) – The Centre can notify wage rates, ensuring they are not below ₹60, irrespective of the Minimum Wages Act, 1948 (MWA).
- Until notified by the Centre, states’ minimum agricultural wages are applicable.
- Background –
- Between 2005 and 2009, MGNREGA wages matched states’ minimum agricultural wages.
- In 2009, MGNREGA wages were capped at ₹100, diverging from minimum wages and violating MWA.
- Since 2011-12, wages are indexed to the Consumer Price Index for Agricultural Labourers (CPI-AL), but the outdated base year (2009) limits its effectiveness.
Issues with MGNREGA Wage Rates:
- Divergence from Minimum Wage – MGNREGA wages are often lower than states’ minimum agricultural wages.
- Disparities Across States – Wage rates differ significantly across states.
- Poor Inflation Indexation – Indexation to CPI-AL (specific to agricultural households) instead of broader CPI-Rural fails to capture comprehensive inflation patterns.
- Retaining the outdated base year of 2009 exacerbates wage inadequacy.
- Ignored Committee Recommendations – Expert committee suggestions have not been implemented effectively:
- Mahendra Dev Committee (2014): Proposed wages ≥ state minimum wage and indexed to CPI-R with a 2014 base year.
- Nagesh Singh Committee (2017): Advocated shifting indexation to CPI-R and delinking wages from state minimum wages.
- Anoop Satpathy Committee (2019): Recommended a National Floor Wage of ₹375/day (at July 2018 prices).
- Constitutional Concerns – Paying below minimum wage may violate Article 23 (prohibition of forced labor), as highlighted in the Sanjit Roy vs State of Rajasthan (1983) judgment.
Source: IE
Previous Year Question
Among the following who are eligible to benefit from the “Mahatma Gandhi National Rural Employment Guarantee Act”?
[UPSC Civil Services Exam – 2011 Prelims]
(a) Adult members of only the scheduled caste and scheduled tribe households
(b) Adult members of below poverty line (BPL) households
(c) Adult members of households of all backward communities
(d) Adult members of any household
Answer: (d)