The government has decided to cap at Rs 100 daily wage given to workers under the National Rural Employment Guarantee Act (NREGA) .

This implies that the Centre will reimburse only up to a maximum of Rs 100 as daily wage per person under NREGA to states.

A notification to this effect will be issued shortly. At present, 90% of NREGA cost is reimbursed by the central government through rural development ministry.

Finance minister Pranab Mukherjee in his Budget speech had promised to provide a wage of Rs 100 a day as an entitlement under NREGA. In a notification issues on January 1, 2009, the government had specified that it would pay states the minimum wage rate for agricultural labourers under the Minimum Wages Act, 1948.

Subsequently, many states, including Karnataka, Andhra Pradesh, Punjab, West Bengal, Madhya Pradesh, Tripura and Himachal Pradesh revised their minimum wage rate for agricultural labourers and asked the rural development ministry to amend the notification to bring parity with their revised wage.

Official sources said this led to a situation where the wage rate notified under NREGA stipulations became less than the minimum wage rate for agricultural labourers as notified under Minimum Wages Act in these states. “We will reimburse up to Rs 100 as daily wage to states. If any state wants to give more, it has to do so from their own budget,” a rural development ministry official told FE.

However, the official clarified that the decision would not affect states which already had their minimum wage rates for agricultural labourers above Rs 100 .

... contd.