One of the people said the government was concerned that any sharp increase in wage rates could push inflation to increase inflation and complicate the tasks of fiscal and monetary authorities just as price pressures began to adjust.
The wage rate of NREGS is the benchmark for agricultural/rural wages and significantly affects industrial pay. Therefore, any dramatic increase in these rates can lead to higher production costs for farmers. They say it is certain that higher wages may also stimulate rural consumption.
In a report earlier this month, Congress leader Saptagiri Sankar Ulaka asked the government to raise NREGS wages by at least Rs 400 a day in rural development and Panchayati Raj standing committee earlier this month. It also requires a sharp increase in working days with the current 100 to 150 per year, which may also be unrecognized by the Center. However, the administration may consider a greater review of the effectiveness of the plan, and the House panel requested a national investigation. Niti Aayog is already in the process of evaluating the scheme.
After a recent annual increase of 2-7% in NREGS’s 2025-26 year wages of 2025-26, most states will still pay below Rs 300 per day, while Haryana can only offer up to Rs 400.
Another said: “It will only make sense to consider increasing wage rates (beyond annual rate hikes) after proper research on implementation and effectiveness.”Sinha panel suggestionsIn 2023, a high-level government team led by former Rural Development Minister Amarjeet Sinha was formed to review the NREG to make it more effective, recommending a significant increase in wage rates and budget allocation for the program. The government has not taken action on the report.
The government has budgeted Rs 860,000 crore for the current fiscal plan for the program, the same as in 2024-25.
