FM Nirmala Sitharaman’s announcement of wage increase for MNREGA workers misleading

In the light of Covid-19 outbreak, Finance Minister Nirmala Sitharaman announced a slew of financial aid, which included an increase in the minimum MNREGA wage rate to Rs 202 from Rs 182. However, she was misleading the public.

The increase in regular annual wage was announced three days ago, on March 23, by the Rural Development Ministry. The ministry announces this increase annually and even without the outbreak of Covid-19, there would have been this increase in wages. “The Rural Development Ministry had announced it three days ago. It is the adjustment against inflation, so it is simply an indexation. This is to ensure the people can buy the same amount of grains, pulses and other food items in the light of inflation,” explained Nikhil Dey, a social activist, who works with Mazdoor Kishan ShaktiSangthan (MKSS).

The Finance Ministry has even got the announcement wrong. The ministry has erroneously calculated Rs 182 as the average minimum wage, when they should be looking at the notified minimum wage. “Her figure is wrong completely. Wages are given based on the cubic feet of work done in a day. Suppose a full day’s wage in a state is Rs 200 for 10 cubic feet of work, if I do only 8 cubic ft of work, then I’ll get only 80% of the wages. So, the actual amount paid to these workers varies from states to state and person to person as it depends on the volume of work. So, instead of stating that the notified wages will be increased, she opted to announce an increase in average wage, which depends on the volume of work done. So, her premise itself is wrong,” underscored RajendranNarayanan, an assistant professor at AzimPremji University and researcher on accountability of government programmes like MNREGA, Public Distribution Systems and pensions.

Moreover, Dey points out that Sitharaman’scalculations that each family will get Rs 2,000 more because of the Rs 20 increase is incorrect because no worker gets 100 days of work. The maximum they get is 50 days of work. “This is not relief. What she has announced is nothing additional. The calculation is incorrect as it is the incorrect wage rate and incorrect number of days of work,” added Dey.

Pointing out the errors in her plan, Dey said that even though Sitharaman announced that MNREGA with continue with individual work, there will be implementation problems. Enumerating the issues, he said, the worker will have to step out to ask for work, then step out to register themselves, then go to a government office once the work is given to mark attendance, then go for work. “The Rajasthan government has already asked all workers to stay at home and even the Prime Minister has announced a lockdown. So, this will not work,” maintained Dey.

Instead, Dey said, the government should give full wages to all the registered MNREGA workers for these 21 days of lockdown as this is the peak work season for all of them. “They should get full wages for these 21 days. For now, the government should transfer the amount to the banks of these workers as there are more than 10 crore registered MNREGA workers. Government giving them work now is dangerous,” asserted Dey.

However, drawing funds from banks is a problem too. “The number of banks per unit area is very few in India. I think currently it is 14 branches per 1 lakh resident. So even if the amount is transferred, the government will have to find a way to ensure the cash reaches the citizens,” added Narayanan.

Commenting on the other problems with the financial package that Sitharaman announced, Narayanan noted that only small and marginal farmers will benefit from the PM-Kisan scheme. It will not benefit tenant farmers or landless farmers.