Charges that NREGA has pushed up agricultural wages fails to account for changing productivity
In the debate over the costs and benefits of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), one of the most controversial and unsettled issues is its effect on agricultural labour market. Last year, Union agriculture minister Sharad Pawar even went to the extent of recommending a 50% subsidy to farmers in wage costs due to increases in real (inflation-adjusted) agricultural wages, linking the increase in wages to MGNREGA. The resounding echo in the academic circles also seems to support the idea of a rise in real casual labourer wages due to MGNREGA, with estimates ranging from 4% to 8% (Berg et al 2012, Azam 2012, Imbert and Papp 2012).
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