Inflation index reset: Wages under key govt schemes to rise

CPI-AL and CPI-RL are released by the labour bureau, a wing under the Union labour ministry.

The government’s decision to revise the base year to 2018-2019 from 1986-87 and expansion of the consumption basket for consumer price index for agricultural and rural labourers (CPI-AL and CPI-RL) is likely to result in upward revisions in nominal terms of the wages for millions of workers under MG-NREGS, Anganwadi and Asha schemes from September onwards.

Sources in the labour ministry said that the new index with the new base year and the revised consumption basket will be launched “latest by the first week of September”.

CPI-AL and CPI-RL are released by the labour bureau, a wing under the Union labour ministry.

The All-India CPI-AL and CPI-RL for June this year increased by eight points each on year. According to a labour ministry statement, the major contribution towards the rise came from food mainly due to rise in prices of pulses, vegetables & fruits, onion, meat goat, fish, mustard oil and gur, etc.

“The revamped index will have wider consumption basket, number of markets covered will be increased to give more representation in the country, redundant items in the basket will be deleted and those which are more relevant as of today will be included,” the official said.

“In all probability, there will be an upward revision in their wages,” he said. Wages under MG-NREGS have been revised upward by Rs 20 from April 1, 2020, to Rs 202 per day.

The present series is compiled for 20 states and All India. Monthly price data collected from 600 villages spread over 20 states are used in the compilation of these indices. The sample of 600 villages is staggered over four weeks of a month with a fourth of the sample covered every week.

“The updatation of the base year will make the index more realistic and more appropriately capture the current price level for rural and agricultural labour. As a result of this, the wages of these workers might see an upward revision,” Partha Pratim Mitra, former principal labour and employment advisor of the Union ministry of labour, said.

A person is treated as an agricultural labourer if he or she follows one or more of the agricultural occupations in the capacity of a labourer on hire, whether paid in cash or kind or partly in cash and partly in kind.

A rural labourer is defined as one who does manual work in rural areas in agricultural and non-agricultural occupations in return for wages in cash or kind, or partly in cash and partly in kind.