Representational photo.

NEW DELHI: Thanks to inflation, the Centre has managed to stub the controversy of zero increase in employment wages under the flagship rural job guarantee programme, a source of raging row for last few years.

As new rates come into force from Wednesday, the national average wage stands at Rs 202 per day, which is Rs 20 higher than 2019-20. None of the states has registered zero increase while the lowest hike is Rs 13 and the highest Rs 34.

The welcome change from past years, ironically, has been possible because of a spike in retail inflation for agriculture labourers -- Consumer Price Index ( Agriculture Labour ) —on which MGNREGA wages are indexed for annual revision.

As inflation remained low in past years, the wage revision resulted in negligible hikes, with certain states even clocking zero. In 2019-20, Karnataka , Goa, Kerala , Lakshadweep, Andaman and Nicobar Islands and West Bengal saw no rise in wages. This has been touching off intense criticism from experts and social activists alike for last few years.

Given the anomalous situation, the rural development ministry in 2018 urged the finance ministry to shift the index of wage revision from CPI (AL) to CPI (Rural). An internal committee of the RD ministry had recommended the course, arguing that CPI (AL) was an old basket while CPI (R) better reflected the consumption pattern. Crucially, food items account for considerable weightage under CPI (AL) and their prices have registered a sharp decline in recent times, especially because of the Food Security Act. This has kept wage revision under a check.

However, the finance ministry has been averse to heed the request of the RD ministry, possibly concerned about the burden on exchequer it will entail.

“As the formula for wage revision remained the same, not much was expected in 2020-21 in terms of shift from past years of minuscule or zero hikes. But then rise in inflation came into play,” a top official explained to TOI.

As economic activity has ground to a halt owing to coronavirus crisis, the MGNREGA too remains shut for work. However, there may be a spurt in demand once the lockdown lifts and the desperate poor run to seek employment.

This week, the RD ministry released Rs 4431 crore to states as part of wage and material arrears for this financial year.

The low or zero hikes have been a problem since 2015. In 2018-19, Uttarakhand, Arunachal, Jharkhand and Bihar registered no increase while MP, Gujarat and Maharashtra got a wage hike of Rs 2. In 2017-18, Bihar, Jharkhand, Assam , UP and Uttarakhand got a hike of Rs 01.

This year, Dadra and Nagar Haveli has notched the highest increase of Rs 34, followed by Maharashtra (Rs 32), UP, Uttarakhand, Manipur and Odisha (Rs 19), Kerala and Assam (Rs 20), Rajasthan (Rs 21) and Punjab (Rs 22). Bihar and Jharkhand have an increase of Rs 23.

