The Hindu : Front Page : Proposal to cut wage rate under job scheme turned down

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Thursday, Jul 06, 2006

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Proposal to cut wage rate under job scheme turned down

Special Correspondent

Finance Minister P. Chidambaram for fixing the maximum wage rate at Rs. 60

NEW DELHI: The Government on Wednesday shot down the Finance Ministry's proposal to effectively lower the wage rates under its flagship employment scheme, the National Rural Employment Guarantee programme.

A high-level meeting, presided over by Prime Minister Manmohan Singh, did not approve Union Finance Minister P. Chidambaram's proposal for fixing the maximum wage rate at Rs. 60 in the States where the minimum wage rates for agricultural labourers were higher than that. The proposal did not seek any change in the States where it was below Rs. 60.

Talking to reporters after the 45-minute meeting at the Prime Minister's residence, Defence Minister Pranab Mukherjee said since the NREG scheme had not been fully operationalised, the Government decided to continue it in the present format. "We will review the proposal once the scheme is fully operationalised."

The scheme would have become unattractive for job seekers in Tamil Nadu, Kerala, Andhra Pradesh, Rajasthan, Punjab and Haryana where the minimum agricultural wages were more than Rs 60.

Union Rural Development Minister Raghvanash Prasad Singh, who opposed the proposal, said people might not opt to work under the scheme in these States thus defeating the central purpose of the Act. Hence, it was decided to leave it to the States to fix the minimum wages for agricultural labour.

Besides Mr. Raghuvansh Prasad Singh, Mr. Chidambaram and Mr. Mukherjee, Deputy Chairperson of Planning Commission Montek Singh Ahluwalia and B.N. Yugantar, member, Planning Commission, attended. Mr. Raghuvansh Prasad Singh said the proposal would have adversely affected the implementation of the scheme in Madhya Pradesh, Maharashtra and the north-eastern States where the wages were below Rs. 60. The proposal could trigger a crisis in the rural areas, pushing up the operational cost of farming.

"This could have triggered an exodus of farm workers to NREGS, which will guarantee them more wages. Secondly, this can also push the demand for higher wages by agricultural labourers and push up cost of farm operation."

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