Increase in NREGA wages just 1 or 2 rupees in some states, as Central allocation for rural job scheme declines

Protest by NREGA workers in Delhi on Sept 11

In a shocking revelation on the implementation of the National Rural Employment Guarantee Act (NREGA), the apex body which represents organizations working on the rural job scheme, NREGA Sangharsh Morcha, has said that NREGA budgets, which reached a peak of 0.6% in 2009-10 (as a proportion of GDP), declined steadily to 0.3% in 2015-16 and 2016-17.
This year (2017-18), the analysis, prepared by top development economist Jean Dreze, says that the "NREGA budget is grossly inadequate – while half of the financial year is left, 75 per cent of the funds allocated for this year has already been spent with no indication from the Ministry of Finance of any supplementary budget."
"The impact of underfunding is evident in the low level of NREGA employment generation: about 46 days per employed household over the past five years, or just 10-15 days per rural household", the analysis, based on official documents, says, adding, "During the same period, only about 8.5 per cent of all households that participated in NREGA were able to access 100 days of work."

Nominal wages vs real wages

Wanting the Government of India to allocate "as much budget as required to ensure that there is work on demand for all rural households, up to 100 days, without wage arrears", the analysis says, "NREGA wages have been held constant in real terms since 2009: the Central government is just raising them each year in line with the price level, that too based on an outdated price index (the Consumer Price Index for Agricultural Labourers, CPIAL)."
"In the last two years, NREGA wages have increased by as little as one rupee per day in some states. Further, NREGA wages are below state minimum wages in many states, a wholly illegal situation", the analysis points out, regretting, "In 2015, the Mahendra Dev committee advised re-setting NREGA wages in line with state minimum wages, but this recommendation was rejected by the Finance Ministry."
"More recently, the issue of NREGA wages was re-examined by another committee of the Ministry of Rural Development, chaired by its Additional Secretary. The committee recommends that NREGA wages should continue to be held constant in real terms, on the odd grounds that this is a 'scientific' approach! If this happens, the entire programme is likely to fade away as workers lose interest", the analysis reveals.

NREGA allocation as % of GDP 

"Even based on the Ministry’s incomplete method of calculation of wage delays, barely half of all NREGA wage payments were made on time (i.e. within 15 days) in the past five years", Dreze says, adding, of over 90 lakh wage payments made in 2016-17 in a random sample of 3,446 Gram Panchayats across ten states, "only 21 per cent of the wage payments were actually made on time."
"NREGA workers are entitled to compensation in the event of delayed wage payments, at the rate of 0.05% per day. Even this paltry compensation, however, is not paid", the analysis notes, adding, reasons include the Management Information System (MIS) calculates delays only up to the fund transfer order, reflecting slow bank payments", adding, worse, the block-level Programme Officers are authorized to “reject the compensation payments calculated by the MIS."
The analysis continues, "Illegal conditionalities are often attached to NREGA entitlements. Employment is made conditional on having an Aadhaar number, correctly seeded into one’s bank account. Last year, the Ministry briefly disallowed demand registration in the MIS for households whose photograph was not uploaded on their electronic Job Card. Under pressure to Swachh Bharat Mission targets, many officials even deny NREGA work to households without toilets."