Lok Sabha Question No. 1163 (UNSTARRED), answered on 2025-02-11
Subject: Variation in Wages under MGNREGS
Ministry: RURAL DEVELOPMENT
Asked by: Shri Harish Chandra Meena, Dr. Dharamvira Gandhi, Shri Saptagiri Sankar Ulaka, Ms. Praniti Sushilkumar Shinde

## GOVERNMENT OF INDIA MINISTRY OF RURAL DEVELOPMENT DEPARTMENT OF RURAL DEVELOPMENT

## LOK SABHA

UNSTARRED QUESTION NO. 1163

## ANSWERED ON 11/02/2025

## VARIATION IN WAGES UNDER MGNREGS

1163. MS. PRANITI SUSHILKUMAR SHINDE:

SHRI SAPTAGIRI SANKAR ULAKA:

SHRI HARISH CHANDRA MEENA:

DR. DHARAMVIRA GANDHI:

Will the Minister of RURAL DEVELOPMENT be pleased to state:

- (a) whether the Government has identified the reasons for significant variations in Mahatma Gandhi National Rural Employment  Guarantee  Scheme  (MGNREGS)  wages  across different States including Rajasthan for FY 2024-25, if so, the details thereof and if not, the reasons therefor;
- (b) the  mechanism followed by the Government in allocating the annual budget for MGNREGS;
- (c) the steps being taken to enhance transparency and efficiency in budget allocation for the scheme;
- (d) whether the Government plans to revise the methodology for calculating  MGNREGS wage rates, which are currently based on the Consumer Price Index - Agricultural Labourers (CPI-AL) with a 2010-11 base year; and
- (e) the  process  followed  by  the  Government  during  the  budget allocation for MGNREGS along with the details thereof?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF RURAL DEVELOPMENT (SHRI KAMLESH PASWAN)

(a)&(d): Mahatma  Gandhi  National  Rural  Employment  Guarantee Scheme  (Mahatma  Gandhi  NREGS)  is  a  demand  driven  wage employment  Scheme.  It  provides  fall  back  options  for  livelihood security for rural households when no better employment opportunity is available.

As  per  Section  6  (1)  of  Mahatma  Gandhi  National  Rural Employment  Guarantee  Act  (Mahatma  Gandhi  NREGA),  2005,  the Central Government may by notification,  specify the wage rate for its beneficiaries. Further, section 6 (2) of the Act, provides that until such time a wage rate is fixed by the Central Government in respect of  any  area  in  a  State,  the  minimum  wage  fixed  by  the  State Government under section  3  of  the  Minimum  wages  Act,  1948  for Agricultural Laborers shall be considered as the wage rate applicable  to  that  area.  Accordingly,   as  per  provision  of  Section 6(2)  of  the  Act,  from  the  inception  of  the  scheme  till  the  financial year  2010-11,  the  wage  rate  in  Mahatma  Gandhi  NREGA  was determined on the basis of the minimum wage set by the respective State Governments. However, from the financial year 2011-12, the Government of India started determining the wage rates using the Consumer Price Index for agricultural labour (CPI-AL).

To compensate the Mahatma Gandhi NREGA workers against inflation,  the  Ministry  of  Rural  Development  revises  the  wage  rate every financial year, based on change in Consumer Price Index for Agricultural  Labour  (CPI-AL).  The  index  is  different  for  different States/UTs  as  notified  by  Labour  Bureau  Shimla.  If  the  calculated wage rate of any State/UT is coming lower than the wage rate of previous  year,  it  is  being  protected  by  maintaining  the  previous year's wage rate. The wage rate is made applicable from 1st April of each  financial  year.   The  overall  %  increase  in  wage  rate  for  FY

2024-25 from the FY 2023-24 is about 7 %.

However,  each  State/UT  can  provide  wages  over  and  above the wage rate notified by the Central Government.

(b),  (c)&(e):      With  regard  to  allocation  of  Budget  for  Mahatma Gandhi NREGS it is stated that the projected Budget Estimate (BE) for  the  incoming  financial  year  is  prepared  by  the  Department  of Rural  Development  as  per  the  timeline  fixed  by  the  Ministry  of Finance.  While  preparing  the  BE  for  the  incoming  financial  year, are  taken  into  account  which  include  central releases  so  far,  persondays  generated,  pending  liability  if  any,   of the  previous  financial  year,  average  increase  in  the  wage  rate  as various factors well as material and admin cost over the year.

Once the projected BE is approved by the competent authority, it is shared with the Ministry of Finance for allocation of funds. Based on demand projected by the Ministry and availability of funds,

necessary budgetary allocations are made in the Union Budget. It is stated since Mahatma Gandhi NREGS  is a demand driven Scheme, based  on  the  pace  of  expenditure  and  demand  for  work  on  the ground,  Government  of  India  is  committed  to  make  the  required funds  available.  Accordingly,  based  on  requirements  projected  by the Department of Rural Development,  allocation made at BE stage is  enhanced  in  Revised  Estimate  (RE)/  Final  Estimate  during  the course of the year.

With  regard  to  allocation  of  'Agreed  to  Labour  Budget'  to  the States/Union  Territories,  it  is  stated  that  in  the  October  month  of the  current  financial  year,  States/UTs  are  requested  to  send  the proposal for the annual action plan for incoming financial year after following due process. Based  on the proposal received from States/UTs an Empowered Committee under the Chairpersonship of the Secretary (Rural Development) approves the 'Agreed to Labour Budget'. The Empowered Committee also consists of the Secretary in charge of the Rural Department of States/UTs as a member. This 'Agreed  to  Labour  Budget'  is  an  indicative  number  for  better planning  so  that  work  can  be  provided  against  demand  on  time. During  the  course  of  the  year,  the  'Agreed  to  Labour  Budget'  is revised depending upon demand for employment by enrolled households.

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