Labour shortage, wage hike hits Indian industry hard: Ficci

NEW DELHI: Government's flagship rural job guarantee scheme, MGNREGA, has led to labour shortages for the industry resulting in increased wage costs and hampering production, Ficci said today.

The chamber, which has done a survey on the impact of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on the industry and the farm sector, has suggested that the scheme should be stopped during the peak agricultural season.

Besides, "the work done in industrial units can also be considered for coverage under MGNREGA. This will be particularly useful in areas where there is heavy concentration of industrial activity," Ficci said.

Its survey found that the wages have risen by more than 10 per cent. Also, the extent of "potential loss" due to labour scarcity has been pegged at 10 per cent, majority of those who participated in the survey said.

Earlier, Agriculture Minister Sharad Pawar, had written to Prime Minister Manmohan Singh suggesting that the MGNREGA scheme be suspended during the peak agricultural season.

However, the nodal Rural Development Ministry does not seem inclined to these proposals.

Under the Rs 40,000-crore scheme, a minimum of 100 days work is guaranteed under law for the rural labourer at a daily rated to be fixed by the individual states, but not less than Rs 60 per day.

The survey drew responses from about 10 associations and over 100 firms spread across sectors like leather, textiles, handicrafts, gems, jewellery and construction.