Wednesday, 29 June, 2022
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Ministers’ panel wants to use MGNREGA funds for labour wages in private factories

Led by Union Minister Thawar Chand Gehlot, the panel recommends expanding MGNREGA's ambit to include work in private enterprises such as factories, construction sites.

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New Delhi: A ministerial panel has proposed using the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) funds to provide subsidy to private enterprises to pay the wages of workers, ThePrint has learnt.

The informal group of ministers (GoM) on Employment, led by Social Justice and Empowerment Minister Thawar Chand Gehlot has also recommended that works in private enterprises like factories, construction sites can also be considered as eligible work under the scheme, in a move that will not only redefine MGNREGA but will also require an amendment to the 2005 Act.

The United Progressive Alliance-era scheme currently mandates the provision of 100 days of guaranteed wage employment to every rural household. However, it does not cover work in factories, shops, etc.

Government sources familiar with the matter said if these proposals are accepted, it would mean an expansion of the scope of the rural employment guarantee scheme to cover works in urban and semi-urban areas too, which have a predominance of factories and construction companies.

To incentivise private enterprises to start operation, the GoM has suggested that the wage provided by them should be over and above the MGNREGA wage component. From 1 April, the average MGNREGA wage rate has been increased to Rs 202 per day per worker.

“This (recommendation) means that the NREGA wage component (Rs 202) will be transferred by the states to the respective private enterprises to pay the workers’ salary. It’s a kind of subsidy given to private enterprise to cover up their liquidity crunch. Out of the minimum wage they pay the workers, the government will pass on the NREGA wage,” said a source.

This is being done to spur economic activity, which has come to a standstill after factories shut down because of the nationwide lockdown, said the source.

“Many of the small factories and construction companies have run out of liquidity because of the nearly two month lockdown,” the source added.

The GoM submitted its report to the government this week..


Also read: Govt lockdown package frees farmers from mandi monopoly, strips essentials of stock limits


Criticism over move

The panel’s proposals have already run into rough weather. On Friday, right activists Aruna Roy and Nikhil Dey of the Mazdoor Kisan Shakti Sangathan (MKSS) issued a statement questioning the proposed changes to MGNREGA guidelines.

“We firmly believe that entitlements under MGNREGA as mandated by the law, must be protected and honoured. Any efforts related to expanding the scope of MGNREGA such as increasing the number of days households are entitled to, nature of works that can be permitted under MGNREGA, extension of works in urban areas are necessary issues which need to be provided for in addition to the already legally mandated entitlements, and not instead of them,” the MKSS statement read.

It further said that any attempt to modify guidelines should be done by consulting the statutory Central and State Employment Guarantee Councils, set up under the law to advise and review the implementation of the scheme in the country.

Other proposals

With pressure building up to address livelihood issues arising out of reverse migration of lakhs of migrant workers amid job losses due to the ongoing nationwide lockdown, the GoM has also suggested that workers returning to their villages should be issued job cards so that they could be given work according to their entitlement.

The panel has said that the government should launch a massive plantation programme on roadside and community spaces with convergence of funds, including from MGNREGA, to help provide employment to the unskilled migrant workers.

It has also suggested enrolling households that complete 100 days of work for skill improvement programmes to help them become semi-skilled/skilled workforce.

“This will help them find work outside MGNREGA,” said a second source.

Concerned over the huge number of labour force returning to villages, the government has made MGNREGA the main fulcrum to provide jobs to the migrant workers.

On Thursday, announcing the second tranche of the Covid-19 relief package, Finance Minister Nirmala Sitharaman said the government has continuously provided MGNREGA support to the returning migrant workers and the actual expenditure till date is around Rs 10,000 crore. On 26 March, she had announced an increase in the average MGNREGA wage rate from Rs 182 per day, as part of the Pradhan Mantri Garib Kalyan Yojana.


Also read: Canteens of BSF, CRPF and other central police forces to sell only swadeshi goods: Amit Shah


 

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3 COMMENTS

  1. So, the government pays for the labour’s wages, and the private owner picks up the profit from that labour’s work? Only a Modi minister could propose such a brilliant idea.

  2. “Ministers’ panel wants to use MGNREGA funds for labour wages in private factories”
    Fist it should be in Reliance Factories .Ambani needs the funds.
    If the plan is implemented we know where the funds will end up ultimately

  3. Couldn’t the government make any provision for lost wages from its 20 lakh crs package, that it needs the money allocated to rural jobless. For whom is the package then? And, how stupid are the ministers even to suggest something like this. Villages are going to be inundated with fleeing migrant laborers. If at all MNREGA allottment needs to go up steeply. It’s unfortunate that we have elected these idiots.

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