lok-sabha-elections

Updated: Mar 26, 2019 10:16 IST

The Centre has sought the Election Commission’s (EC) approval to increase wages paid under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) programme, a decision that could benefit roughly 118 million active workers.

Senior government officials added that the wage hike, in sync with the Consumer Price Index agricultural (CPI-AL), is expected to be in the range of 2% to 5% of the current rate.The average growth in CPI-AL in the quarters ending June, September and December in this financial year has been 2%, 1.8% and 1.3% respectively. “We have applied to the EC for its permission to revise the rates. We expect to get the EC’s approval in a day or two. We are otherwise ready to roll out the new rates from April 1,” said a senior rural ministry official, asking not to be named.

The Election Commission’s model code of conduct is in force since March 10 — the day the schedule for the general elections was announced.

The code prohibits any move by the government that could potentially sway voters.

But there is precedence for changing the MGNREGA?rate during election season. Last year, the EC allowed it while Karnataka elections were underway, but put strict curbs that included a ban on publicising the decision.

In its appeal to the EC, the Centre argued that the MGNREGA programme is ongoing and the increase would not amount to a policy change, since such wage revisions are a standard practice every year.

Last year, the election watchdog asked the government to ensure “absolutely no publicity” is given to the wage revision and “no political functionary shall make any reference” to it.

Experts have maintained that stagnation of rural wages is one of the key reasons behind the latest rural crisis. In January 2018, wage growth slowed to a three-year low of 3.09%. In March, rural wage growth (men) for both farm and non-farm labour was 3.53%. But since rural consumer inflation was higher at 4.4%, this meant real wages (income minus inflation) were negative.

While the rural ministry hopes to roll out the new rates without any hassle, another proposal — to shift the index from “CPI agricultural” to “CPI rural” to allow higher wage revision — would have to wait till the new government is formed.

“We had earlier discussed a proposal for changing the index but now, there is no scope for any immediate change. After the new government comes in, we hope there would be a notification in this regard,” said the senior rural development ministry official quoted above.

On January 7, minister of state for rural development Ram Kripal Yadav informed Parliament that a committee under a former rural development additional secretary was formed to study, among other things, the appropriate index for revising MGNREGA wages. The committee recommended using CPI-rural instead of CPI-AL index.

Food items have a far higher weight in CPI-AL (69%), and since food prices are currently low with many states supplying heavily subsidised food items, MGNREGA?wage revisions have also remained low. The CPI rural would allow higher weightage to non-food items — food and beverages have a weight of 54% in CPI-RURAL — and thereby allows the centre to revise wages at a higher rate.