It is the first time in more than a decade that the Centre has not released a revised NREGS wage notification in February-March.

Why In News?

The Centre has deferred the annual revision of wage rates under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for the financial year 2026-27.

The VB-G RAM G Act, 2025

It aims to replace MGNREGA with a new framework for providing unskilled wage employment and livelihood support in rural areas. Key proposed changes include:

• Potential increase in guaranteed days up to 125 days.
• Revised fund-sharing pattern, i.e., 90:10 (center:state) for 11 special category states and 60:40 for others.
• Pause in employment guarantee during peak agricultural seasons.
• Emphasis on digital governance and weekly wage payments.

Reasons for Delay in Wage Hike

The primary reason is the impending transition to the new scheme. Officials have stated that wages for 2026-27 will be notified once VB-GRAM comes into force.

This decision aims to align the wage structure with the new legal and administrative framework, avoiding any legal or operational complications during the shift.

Impact on Rural Workers and States

• Workers: Over 7 crore active workers may have to wait longer for a potential wage increase. While current rates continue, the delay comes amid rising rural costs and stagnant real wages in recent years.
• States: The new fund-sharing pattern under VB-G RAM G increases the financial burden on states, especially non-special category ones.
• Scheme Implementation: Temporary month-wise labour budgets are being approved to maintain continuity. However, the transition phase raises concerns about potential administrative delays, pending payments, and reduced worker participation.

Challenges and Concerns

• Fiscal Implications: Shifting cost-sharing could lead to uneven implementation across states with varying fiscal capacities.
• Real Wages: Critics point out that linking revisions solely to CPI-AL has resulted in limited growth in real wages over the years.
• Demand vs Supply: High demand for work persists in many rural pockets, but funding constraints and administrative changes often lead to delays in payments
• Livelihood Security: In a year with acute rural distress, timely wage revision assumes greater significance.

Way Forward

• Expedite the operationalisation of VB-G RAM-G with clear guidelines on wage determination.
• Maintain transparency in wage notifications and protect the legal right to work.
• Strengthen monitoring mechanisms to prevent any dilution of entitlements.
• Address state concerns regarding fund-sharing through adequate central support.

Conclusion

The decision to delay the MGNREGS wage hike until the rollout of VB-G RAM G reflects the Centre’s focus on overhauling the rural employment guarantee architecture.

Source: Indian Express