A government-appointed panel is learnt to have suggested that the wage rate under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) should be revised to bring it on a par with the prevailing market rate.

The market wage rate has no legal sanctity and it is determined based on demand and supply. In most states, it is higher than the minimum wage and the MGNREGA wage. The MGNREGA wage rate, which is revised on the basis of the Consumer Price Index for Agricultural Labourers (CPIAL), is less than the minimum wage in half the states. The NREGA rate in individual states is fixed on the basis of inflation.

The ministry of rural development (MoRD) had set up a committee last year under its former secretary, Amarjeet Sinha, to study the reasons for the low demand for MGNREGA work in northern states like Bihar and Uttar Pradesh and suggest measures on how these states can better utilise the scheme to provide employment and stop migration.

Committee sources said the panel found the MGNREGA wage rate was lower than the prevailing market rate in the northern states, and suggested that they should be made the same. The report has been submitted to the MoRD, which is yet to make it public.

Earlier, a committee set up under economist Mahendra Dev had suggested aligning the NREGA wage rate with the state minimum wage. However, the government has not implemented it since it adds to its spending.

An activist who did not wish to be named said it was impractical to implement the recommendation of the Sinha committee since there was no formula for determining the market wage.

“There is no definition for market wage. Linking the MGNREGA rate to the market rate would be impractical since the market rate is never notified. It would be a challenge to determine this wage,” he said.

A.R. Sindhu, Citu general secretary, said market wage was not a legal term. The ideal thing to do is to link the MGNREGA wage rate with the minimum wage rate of the respective state, she said.

“The market wage rate may go up and down. It has no legal sanctity. Minimum wage is legally accepted terminology and there are laid-down criteria for its determination,” Sindhu said.

The MGNREGA provides up to 100 days’ work to every rural family in a year. According to the MGNREGA, workers raise their demand for work to the gram panchayat office. In every gram panchayat, there is a Gram Rojgar Sevak who is supposed to receive the applications and coordinate with the sarpanch and the panchayat secretary
for planning work in the locality and provide jobs to applicants within 15 days of the demand.

But the uptake in northern states is poor because people are not sensitised about the programme and demands for work are not registered in many cases, Sindhu said. She said the government gave a lot of importance to water-related work. Though projects on individual land are allowed, community work is given greater priority. Sindhu said the types of work should be increased.