The budget announcement of a minimum wage of Rs 100 in the National Rural Employment Guarantee Scheme (NREGS) is welcome provided it is a minimum and not a maximum wage. Rajasthan, for instance, has been giving Rs 100 for two years and Haryana pays more. So the Centre should not give these states funds to suffice payment of Rs 100 rates. The Congress manifesto in the last election had said that the minimum NREGS wages would be linked to the consumer price index.
That is very important. If they do so, it may also settle the issue of NREGS wages for all times. It would not then necessitate a periodic revision of the wage. A future wage would be equivalent to what Rs 100 fetches you today. That is how you link it to Consumer Price Index. There is also the issue of NREGS competing with farm wages. This linkage would again see to it that wages are realistic. Convergence with other schemes as promised by the budget can be fine provided it is other schemes which merge with the NREGS and not the other way round.