Abysmal Wage Rates for MGNREGA in FY 2022–23

The wage rates of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) workers for financial year 2022–23 were notified on 28 March 2022. The notification of the wage rate has been extremely arbitrary, with only three days remaining for the beginning of the next financial year. Such a delay prevents any discussion or debate regarding the wage rates or their adequacy. This is a continuation of the government’s assault on MGNREGA workers’ rights. The hike ranges from a meagre `4 to utmost `21 for various states and union territories. And workers of three states (Manipur, Mizoram, and Tripura) will have to be content with no hike at all. The average increase in the MGNREGA wage rates across the country is a measly 4.25%. Whereas, central government employees and pensioners get a dearness allowance of 31%, costing `9,544.5 crore to the exchequer each year. While the government revises the dearness allowance twice a year and pays thousands of crores for it, it systematically ignores MGNREGA workers.

An increase in the MGNREGA wages, since it is a base wage, will also lead to upward pressure on rural and subsequently urban industrial wages. In times of the current economic distress, it will also increase rural expenditure, leading to a boost in aggregate demand in the economy, which is crucial for its recovery. For 27 states and union territories, the MGNREGA wage rate is less than the corresponding minimum wage for agriculture, condemning the workers to another year of bonded labour. The difference is greatest in Karnataka (despite having the highest percentage increase in wage rate) where the MGNREGA wage rate is only 70% of the state minimum wage for agriculture. This ratio is around 70% for a number of states such as Jharkhand, Odisha, Bihar, and Himachal Pradesh. The total average difference between the MGNREGA and the minimum wage rates for the country comes out to be around 20%.