Press Esc to close
Thursday 21 September 2017
News updated at 1:30 AM IST

Sticky wages

Last updated: 17 January, 2011

'The real value of the wage has eroded over the years.'

The government’s decision to link the wages paid under the National Rural Employment Guarantee Scheme (NREGS) to inflation is the second best option, after it rejected the demand to pay statutory minimum wages to workers under the scheme. The demand to pay minimum wages to the workers had been made by UPA chairperson Sonia Gandhi in a letter to Prime Minister Manmohan Singh. It was based on a considered view that emerged in the National Advisory Council. But the prime minister has rejected it, mainly because it would involve much greater expenditure than the government feels it can bear. However, the illegality of the government itself violating the Minimum Wages Act is too obvious to be missed. The argument that minimum wages vary from state to state and the Centre has no control over them is not a good enough reason to deny the right of the worker.

However, the decision to link the wages to the consumer price index will go some length in insulating workers’ wages from the impact of inflation. Ever since the launch of the scheme in 2005 the remuneration has remained fixed at Rs 100. The real value of the wage has eroded over the years and this has affected the appeal and usefulness of the scheme as such. The indexation has come into effect from January 1 and has resulted in increasing workers’ wages by 17 to 30 per cent. The government, at present, spends over Rs 40,000 crore on the scheme and the expenditure will now go up by another Rs 3,500 crore. Fiscal prudence demands that the additional expenditure be made up through savings or other means.

The flagship programme of the UPA government has helped millions of workers in rural areas to find work for 100 days in a year. It has served as an economic safety net but needs to be implemented better in many parts of the country. Though there are safeguards like mandatory payments through banks or post offices, limits on administrative costs and the need to publish the details of expenditure and works undertaken, there are problems like fudging of records, delayed payments and wastage of funds. It is also not always ensured that the works undertaken are useful and productive. With improvement in implementation, the new remuneration scheme, which involves revision of wages every year, can ensure that the workers derive full and real benefit from the programme.

Go to Top

Photo Gallery
A man is rescued from a collapsed building in the Condesa neighborhood of Mexico City after an...

A man is rescued from a collapsed building in the Condesa neighborhood of Mexico City after an...

A car sits crushed from a building felled by a 7.1 earthquake, in Jojutla, Morelos state, Mexico...

A car sits crushed from a building felled by a 7.1 earthquake, in Jojutla, Morelos state, Mexico...

U.N. : President Emmanuel Macron of France addresses the 72nd session of the United Nations...

U.N. : President Emmanuel Macron of France addresses the 72nd session of the United Nations...

People walk by a fallen tree off the shore of Sainte-Anne on the French Caribbean island of...

People walk by a fallen tree off the shore of Sainte-Anne on the French Caribbean island of...

The arms, bullets and other items recovered by the BSF from the two Pakistani infiltrators who...

The arms, bullets and other items recovered by the BSF from the two Pakistani infiltrators who...

An Anganwadi worker faints during a protest in favour of their demands, at Residency Road in...

An Anganwadi worker faints during a protest in favour of their demands, at Residency Road in...

A delivery boy pushes his bicycle through a water-logged street after heavy rains at...

A delivery boy pushes his bicycle through a water-logged street after heavy rains at...

The wall of Kohalgaon dam which collapsed during the trial run and inundated nearby areas of a...

The wall of Kohalgaon dam which collapsed during the trial run and inundated nearby areas of a...

Joe Acaba, left, the first astronaut of Puerto Rican heritage, talks during an interview with...

Joe Acaba, left, the first astronaut of Puerto Rican heritage, talks during an interview with...

U.S. President Donald Trump addresses the 72nd United Nations General Assembly at U.N. headquarters

U.S. President Donald Trump addresses the 72nd United Nations General Assembly at U.N. headquarters

Like us on Facebook

Copyright 2017, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523
Powered by Yodasoft Technologies Pvt. Ltd.