'NREGA spiked rural wages only 10%, rest is from MSPs'

'NREGA spiked rural wages only 10%, rest is from MSPs'

Reserve Bank Governor Raghuram Rajan has dismissed the notion that the rural employment guarantee programme is behind the massive spurt in wages in rural areas.

“On the NREGA (National Rural Employment Guarantee Act), there is clearly a lot of sense that this has increased rural wages tremendously. I would argue that clean, trustworthy studies say that the effect was may be 10 per cent," Rajan said.

It is other factors such as rise in minimum support price of food items, better realisations for food commodities in the international markets, shift of labour to the building industry due to a spurt in construction activity, coupled with a gradual withdrawal of women from the workforce due to a myriad of reasons, have caused the spike in wages, Raguram Rajan added.

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