Executive Summary:
This document addresses concerns regarding the revision of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) wage rates. It clarifies the process for determining wage rates, which transitioned from state-determined minimum wages to a central government system based on the Consumer Price Index for Agricultural Labourers (CPIAL) in FY 2011-12. The wage rates are revised annually, effective from 1st April of each financial year, to compensate for inflation. The wage rate for FY 2025-26 has increased by around 5% average over the last financial year.
Key Points / Main Content:
Wage Rate Determination:
* Initially (until FY 2010-11), MGNREGS wage rates were based on the minimum wage fixed by respective State Governments for agricultural laborers, as per Section 6(2) of the Mahatma Gandhi NREGA, 2005.
* From FY 2011-12, the Central Government determines wage rates using the Consumer Price Index for Agricultural Labourers (CPIAL).
Wage Revision Process:
* The Ministry of Rural Development revises the MGNREGS wage rate every financial year based on changes in the CPIAL.
* CPIAL varies across States/UTs, as notified by the Labour Bureau, Shimla, Ministry of Labour and Employment.
* Wage rates are protected, ensuring that no State/UT receives a wage rate lower than the previous year.
* Revised wage rates are notified and applied from 1st April each financial year.
* The wage rate for FY 2025-26 has increased by around 5% average over the last financial year and around 29% average in the previous 5 financial years.
State Government Flexibility:
* State Governments can supplement the centrally notified wage rate from their own funds.
Impact Analysis:
Central Government (Ministry of Rural Development):
* Impact: Responsible for annual revision of MGNREGS wage rates based on CPIAL and notifying the revised rates. Must ensure wage rates are not lower than the previous year.
* Action Required: Continue to revise wage rates annually based on CPIAL and notify the updated rates by 1st April each financial year.
State Governments:
* Impact: Initially determined wage rates; now have the option to supplement centrally notified rates.
* Action Required: Can provide wages above the centrally notified rate using state funds.
MGNREGS Workers:
* Impact: Wage rates are revised annually to adjust for inflation, potentially affecting their purchasing power.
* Action Required: Be aware of the revised wage rates applicable from 1st April each financial year.
Key Entities Referenced
Shri Gurmeet Singh Meet Hayer: Member of Lok Sabha who asked the question about MGNREGS wage revision.
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS): A rural employment guarantee scheme in India, providing a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage.
Ministry of Rural Development: The Indian government ministry responsible for rural development.
Shri Kamlesh Paswan: Minister of State in the Ministry of Rural Development.
Mahatma Gandhi National Rural Employment Guarantee Act (Mahatma Gandhi NREGA), 2005: The legal framework that establishes the MGNREGS scheme.
Minimum Wages Act, 1948: An Act of Parliament concerning Indian labour law that sets the minimum wages that must be paid to skilled and unskilled labourers.
Consumer Price Index for Agricultural Labourers (CPIAL): An index used to determine wage rates for MGNREGS workers.
Labour Bureau Shimla, Himachal Pradesh: The organization responsible for calculating and notifying the CPIAL for different States/UTs.
GOVERNMENT OF INDIA
MINISTRY OF RURAL DEVELOPMENT
DEPARTMENT OF RURAL DEVELOPMENT
LOK SABHA
UNSTARRED QUESTION NO. 3873
ANSWERED ON 12/08/2025
REVISION OF MGNREGS WAGES
3873. Shri Gurmeet Singh Meet Hayer:
Will the Minister of RURAL DEVELOPMENT be pleased to state:
(a) whether it is true that Mahatma Gandhi National Rural
Employment Guarantee Scheme (MGNREGS) wage rates have
not been consistently revised since 2013 to keep pace with
inflation;
(b) if so, the reasons for the irregular revisions and their impact on
the purchasing power of workers;
(c) whether the Government acknowledges that in real terms,
MGNREGS wages have declined, adversely affecting rural
households dependent on the scheme;
(d) the measures taken to ensure MGNREGS wage rates reflect the
realities of the economy and duly compensate the workers; and
(e) whether the Government is considering a comprehensive review
of wage rates in all States to address disparities and align with
minimum wage standards or working on establishing a better
Index for reference of wage rates?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF RURAL DEVELOPMENT
(SHRI KAMLESH PASWAN)
(a) to (e): As per Section 6 (1) of the Mahatma Gandhi National Rural
Employment Guarantee Act (Mahatma Gandhi NREGA), 2005, the
Central Government may, by notification, specify the wage rate for
its beneficiaries. Further, section 6 (2) of the Act, provides that until
such time a wage rate is fixed by the Central Government in respect
of any area in a State, the minimum wage fixed by the State
Government under section 3 of the Minimum wages Act, 1948 for
Agricultural Laborers shall be considered as the wage rate applicable
to that area. Accordingly, as per provision of Section 6(2) of the Act,
from the inception of the scheme till the financial year 2010-11, the
Page 1 of 2wage rate in Mahatma Gandhi NREGA was determined based on the
minimum wage set by the respective State Governments. However,
from the financial year 2011-12, the Government of India started
determining the wage rates using the Consumer Price Index for
Agricultural labourers (CPI-AL).
To compensate the Mahatma Gandhi NREGA workers against
inflation, the Ministry of Rural Development revises the wage rate
every financial year, based on changes in the Consumer Price Index
for Agricultural Labourers (CPI-AL). The index is different for different
States/UTs as notified by the Labour Bureau Shimla, Ministry of
Labour and Employment. If the calculated wage rate of any State/UT
is coming lower than the wage rate of the previous year, it is being
protected by maintaining the previous year's wage rate. Accordingly,
wage rate of Mahatma Gandhi NREGS workers are being revised
every year since FY 2011-12. The revised notified wage rate is made
applicable from 1st April of each financial year.
Using the present methodology of wage rate calculation, the
central government has notified the wage rate for FY 2025-26 which
has increased by around 5% (average) over the last financial year and
around 29% (average) in the previous 5 financial years. However,
State Governments can provide wages over and above the wage rate
notified by the Central Government from its own sources.
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