NREGA effect: Minimum wages rise across states

As the National Rural Employment Guarantee Programme (NREGA) is extended to all districts of the country, surprising findings have emerged about the effect of the programme on the minimum wages being paid in various states.

According to a study undertaken by the Ministry of Rural Development, minimum wages have increased in real and indirect terms in almost all states in India.

For example, Uttar Pradesh has seen minimum wages soar from Rs 58 to Rs 100, Arunachal Pradesh from Rs 55 to 65, Himachal Pradesh from Rs 65 to Rs 75, Karnataka from Rs 62.50 to Rs 74, Orissa from Rs 55 to Rs 70, and more spectacularly Maharashtra from Rs 47 to Rs 72 per day.

These increases have occurred not just in terms of cash amounts but also in reduced expected outcomes from wage labourers.

"Earlier targets for expected volume of earth removed have been reduced to quantities between nearly half and one third," said a ministry official.

That is, if a wage labourer had to remove earth of upto 2.5 cubic feet, these have now been reduced to just two feet or even as less as 1.3 feet in various states.

"Under NREGA, there are no provisions for contractors to undertake works, so many states did time and motion studies at work sites and determined the outcomes, which were lower compared to expected outcomes in other works. This has meant a rise in income," said the ministry official.

Targets for women too have been revised, with women getting the same wage as men for 15 per cent less outcome. "This too is a direct result of the time and motion studies," said the official.

The study also notes the farmers who have to pay commensurate wages for agricultural labour are not too happy with this.

"Agricultural labour wages have also gone up because of competitive wage markets, so input costs for farmers have increased," say ministry officials.