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29th March 2024 (13 Topics)

Revision in MGNREGA Wages & Issue of Wage Disparity


The central government has announced a three to 10 percent increase in wage rate for unskilled workers under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for the financial year 2024-25.

1: Dimension- Issue of disparity in wages under MGNERAGA

  • Last year, the Parliamentary panel had stressed on the need to address the issue of disparity in wages under MGNREGA. It had asked the ministry to explore the possibility of making wages uniform across the country.
  • It said, “Disparity of wages and non-increase in wages commensurately with inflation is perhaps the most discouraging aspect for labourers to undertake MGNREGA works.”
  • The issue of divergence between wage rates under MGNREGA is on account of the fact that the states do not follow a uniform policy of wage revision for minimum agricultural wage. In 2023-24, the lowest wages were in Chhattisgarh and Madhya Pradesh at Rs 221, while the highest was in Haryana at Rs 357.
  • Drawing on inflation data, together with the rural monthly wage index published by the Indian Labour Bureau, the Ministry of Finance has observed negative trends in the purchasing power of rural Indian wages in recent years.
    • Thus, in its Economic Survey 2022-23, the Ministry highlighted a negative growth in real rural wages (that is, rural wages adjusted for inflation) due to elevated inflation between April and November 2022.

2: Dimension- The ‘actual’ outcome of wage disparity

  • Inadequate labour protection:Although people in rural areas are more likely to be in employment than those in urban ones, they also tend to have jobs that can put them at risk of experiencing inadequate labour protection as well as low pay.
  • Insufficient wage to cover inflation: The increase in wage rate may be insufficient to meet the increase in cost of basic goods, which have risen due to spike in inflation in the last few years.
  • Decline in the number of MGNREGA household employment demands:The household employment demand has decreased from 8.05 crore in 2021-22 to 6.20 crore in 2023-24.

Way Forward

The fluctuation in wage rates among States is unjustified. Hence, a uniform wage rate is recommended to end the disparity. Bridging the wage disparity will end the uncertainty among beneficiaries and also serve the larger purpose of welfare of MGNREGA workers. The government should devise a mechanism for notifying a unified wage rate across the country.

Fact Box

Mahatma Gandhi National Rural Employment Guarantee Act

  • The Mahatma Gandhi National Rural Employment Guarantee Act was passed in 2005, and the demand-driven scheme guarantees 100 days of unskilled work per year for every rural household that wants it. 
  • The wage rates are notified annually as mandated in the Act. It is the amount to be paid to unskilled workers per day for the work done under the scheme.
  • Currently, there are close to 14.34 crore active workers under MGNREGS and the average per day rate for unskilled work is around Rs 235 per day, as per the rural development ministry.

Social Protection

  • Social protection is broadly understood as measures to reduce poverty and vulnerability by reducing people's exposure to risks and enhance their capacity to manage those risks, including those associated with unemployment, exclusion, sickness, disability, and old age. 


Q: ‘Poverty Alleviation Programmes in India remain mere show pieces until and unless they are backed by political will’. Discuss with reference to the performance of the major poverty alleviation programmes in India. (UPSC 2017)

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