India's Rural Employment Guarantee Scheme VB-G RAM G Act Comes into Effect, Boosting National Average Wage Rate

Wage rates were revised across the country on Wednesday as the The Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act came into effect. The national average has increased to Rs 327.4 per day under the new rural employment guarantee scheme. “We have discussed in detail what steps need to be taken. People from all states have expressed their commitment to implementing it so that labourers can get proper work…if any labourer needs work, they should not have to remain without work even for an hour, we have deliberated on all these aspects,” Union Minister Shivraj Singh Chouhan had assured ahead of implementation. According to the Ministry of Rural Development, the revised wage rates will take effect across all 34 states, union territories and wage regions from July 1. The Indian government sees the VB-G RAM G Act as a strengthened framework for rural employment, livelihood security and sustainable village development. It improves the minimum wage limit and hopes to ensure that ‘no eligible individual remains without work for even a single day’. The Centre also made an interim allocation of Rs 95,692.31 crore to the states and UTs for the nationwide rollout of the new scheme. This is intended to ensure “uninterrupted implementation, timely wage payments and seamless transition from the very first day”. “The Government has ensured a smooth transition to the new framework. Ongoing works will continue without interruption, while existing e-KYC verified job cards will remain valid until the issuance of the new Gramin Rozgar Guarantee Cards, ensuring uninterrupted access to employment and timely payment of wages,” a PIB press note adds. According to the Ministry, a new interim base wage rate of Rs 300 per day has been introduced to ensure that there is no notified wage below that level under the program. The government said the average increase in wage rates across the country is over 10%. A PTI report noted that 21 states have been brought up to the new rate. Others including Uttar Pradesh, Bihar, Jharkhand, West Bengal and Assam will see wage increases in the range of 15% to 25%. Arunachal Pradesh and Nagaland will see the highest percentage increase of nearly 24.5%. The government said the revised wage structure has been designed to ensure that the greatest gains accrue to states that historically had lower wage rates. It added that states with higher existing wage rates have also received upward revisions, with Haryana having a notified wage rate of Rs 409, Goa Rs 406, Kerala Rs 401 and Sikkim’s high-altitude gram panchayats Rs 450 per day. The VB-G RAM G Act was passed by Parliament and therefore mandatorily applicable to all states. But it has been met with resistance from Opposition-ruled states — with some passing resolutions and taking cabinet decisions to reject the legislation ahead of its rollout. States such as Karnataka and Punjab had been vocal in their initial resistance, and even moved the Supreme Court over the repeal of MNREGA. They argue that the new law ‘unfairly’ shifts costs to states by requiring them to bear 40% of the expenditure. The earlier had seen the Centre funding the wages of beneficiaries.