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Thee National Rural Employment Guarantee Act, (NREGA) was notified on September 7, 2005.


The objective of the Act is to enhance livelihood security in rural areas by providing at least 100 days of
guaranteed wage employment in a financial year to every household whose adult members volunteer to do
unskilled manual work.

¬ . Strong social safety net for the vulnerable groups by providing a fall-back employment source, when
other employment alternatives are scarce or inadequate
¬ . Growth engine for sustainable development of an agricultural economy. Through the process of
providing employment on works that address causes of chronic poverty such as drought, deforestation and
soil erosion, the Act seeks to strengthen the natural resource base of rural livelihood and create durable
assets in rural areas. effectively implemented, NREGA has the potential to transform the geography of
¬. Empowerment of rural poor through the processes of a rights-based Law
¬. New ways of doing business, as a model of governance reform anchored on the principles of
transparency and grass root democracy.

¬Thus, NREGA fosters conditions for inclusive growth ranging from basic wage security and recharging
rural economy to a transformative empowerment process of democracy

The Act was notified in 200 districts in the first phase with effect from February 2nd 2006 and then
extended to additional 130 districts in the financial year 2007-2008 (113 districts were notified with effect
from April 1st 2007, and 17 districts in UP were notified with effect from May 15 th 2007). The remaining
districts have been notified under the NREGA with effect from April 1, 2008. Thus NREGA covers the
entire country with the exception of districts that have a hundred percent urban population.


1. Adult members of a rural household, willing to do unskilled manual work, may apply for
registration in writing or orally to the local Gram Panchayat
2. The Gram Panchayat after due verification will issue a Job Card. The Job Card will bear the
photograph of all adult members of the household willing to work under NREGA and is free of cost
3. The Job Card should be issued within 15 days of application.
4. A Job Card holder may submit a written application for employment to the Gram Panchayat, stating
the time and duration for which work is sought. The minimum days of employment have to be at
least fourteen.
5. The Gram Panchayat will issue a dated receipt of the written application for employment, against
which the guarantee of providing employment within 15 days operates.
6. Employment will be given within 15 days of application for work, if it is not then daily
unemployment allowance as per the Act, has to be paid liability of payment of unemployment
allowance is of the States.
7. Work should ordinarily be provided within 5 km radius of the village. In case work is provided
beyond 5 km, extra wages of 10% are payable to meet additional transportation and living expenses
8. Wages are to be paid according to the Minimum Wages Act 1948 for agricultural labourers in the
State, unless the Centre notifies a wage rate which will not be less than Rs. 60/ per day. Equal wages
will be provided to both men and women.
9. Wages are to be paid according to piece rate or daily rate. Disbursement of wages has to be done on
weekly basis and not beyond a fortnight in any case.
10. At least one-third beneficiaries shall be women who have registered and requested work under the
11. Work site facilities such as crèche, drinking water, shade have to be provided
12. The shelf of projects for a village will be recommended by the gram sabha and approved by the
zilla panchayat.
13. At least 50% of works will be allotted to Gram Panchayats for execution
14. Permissible works predominantly include water and soil conservation, afforestation and land
development works
15. A 60:40 wage and material ratio has to be maintained. No contractors and machinery is allowed
16. The Central Government bears the 100 percent wage cost of unskilled manual labour and 75 percent
of the material cost including the wages of skilled and semi skilled workers.
17. Social Audit has to be done by the Gram Sabha.
18. Grievance redressal mechanisms have to be put in place for ensuring a responsive implementation
19. All accounts and records relating to the Scheme should be available for public scrutiny.

RESEARCH PROBLEM--->The Scope of the Research is based on the Comparative study of

Minimum Wages (in different states) for unskilled labour, described under Ministry of labour and
Employment & Minimum Wages scheduled in MGNREGA Scheme.

Over objective of research is to compare the wage rate of unskilled labour between MNREGA, Unorganised
labour market and the government labour wage policies, so as to focus on the low payment in MGNERAGA
are getting as compared to others. Also to suggest why factors like Cost Of Living Index should also be
considered while fixing the minimum wages for MGNREGA.

According to minimum wage profile, provided by ministry of labour and employment (under minimum
wages act 1948)
¬ As of now there is no uniform and comprehensive wage policy for all sectors of the economy in India.
Wages in the organised sector are determined through negotiations and settlements between employer and
employees. In unorganised sector, where labour is vulnerable to exploitation, due to illiteracy and having no
effective bargaining power, minimum rates of wages are fixed/ revised both by Central and State
Governments in the scheduled employments falling under their respective jurisdictions under the provisions
of the Minimum Wages Act,1948

The National Minimum Wage has been considered at various fora in the past. However, State/UT
Governments are not unanimous on the need of a National Minimum Wage as socioeconomic conditions
vary from state to state, region to region and also from industry to industry due to different geographical,
topographical and agro-climatic factors.

For example the Minimum wages to be provided for Skilled, Semiskilled & Unskilled labor

For the construction & maintenance of dam, embankments, irrigation

projects, sinking of wells and tanks in respective states are


(In Rs.) (In Rs.)
Skilled Labor- 184.72 149.58

Semiskilled Labor- 166.41 140.73

Unskilled Labor- 145.98 131.88

AN UNSKILLED LABOUR IN UNORGANISED SECTOR -Rs. 150 to Rs.180 (a day for the same work)

AN UNSKILLED LABOUR UNDER MNREGA ACT---------Rs. 100 (a day for the same work)

On 1st Jan. 2009 central government has issued a notification where state governments are allowed
to raise wages upto Rs. 100/= per day (if they were less than that on June 2009). This new policy effectively
activates section 6(1) of the act, which involves a potential, if not actual overwriting the minimum wages act
Independent social auditors doing research on NREGA had also been asking for indexing
the wages on the basis of Inflation, Farm wage Index, CPIAL(consumer price Index for agricultural
labours) and CLI (cost of living Index).The reason behind this is that there is a vast diversity in cost of
living across various socio-geographical and various economic areas of the country, which may result in
variation in cost of living accordingly.

* The Labour Bureau has switched over to the new series of CPI Numbers for
Agricultural Labourers on base 1986- 87=100 replacing the old series (1960-61=100)
w.e.f. November, 1995. In order to maintain the continuity of index numbers series for
Agricultural Labourers the linking factor for all-India General Index has been derived at
5.89 @ Figures estimated on the basis of linking factor for percentage variation. The
index for the month of November, 1995 on old base was 1414 Source: Labour Bureau,

For example the transportation cost for 5km. in a motor vechile in hilly regions of Uttaranchal where as
the cost for the same distance in U.P. is Rs.5. This variation may alter the cost of living if a index is made
on this basis.

A working group on wages for NREGA workers set up under central employment guarantee
council under economist and council member JEAM DREZE has said that wages should be linked
to consumer prise index for agricultural labour( CPIAL) with April 2009 as base so that the real
value of wage is at least Rs.100 per day as April 2009 prises.As long as MGNREGA wage rate are set
by the central govt., they should be promptly revised upwards every six months, or at most every 12 months
in line with CPIAL.

The incentives MNREGA provides have not been able to counter the gigantic impacts on Neo-
liberal policies in the labour market. There also has been a parallel rise in unemployment which has created
a growing reserve of cheap and unorganized labour that can be used as per market terms and

Accordingly MNREGA is meant to improve rural people purchasing power, primarily semi or
unskilled workers irrespective of their positioning above or below poverty line
But the big question is how the objectives of MNREGA can be achieved in view of variations in cost of
living in different states as the wage rate under MNREGA is Uniform at Rs. 100 only, that is too less
than the wages prevalent in unorganized sector.

Researchers has suggested:-

1Flexibility in terms of payment to workers under MGNERAGA vis-à-vis to area specific
cost of living and expenditure pattern.
3Minimum wages should be fixed according to minimum wages act 1948
5If we are on- to unskilled agricultural labour under MGNREGA, wages should be indexed
with CPIAL of that particular state.

1The Wages could also be linkerd with CLI of each states and fixed accordingly
3The central/ state govt. should revise some min. wage on base of Inflation at least every six
month or a year.
5If worker demands so, he can barter his value of wage to food grains (like done in
Antroday Ann Yogna). For this process PDS could be of great help.