Govt issues clarification on wage-material ratio under NREGA projects

NEW DELHI: Keeping his promise to focus on creating durable assets under the UPA's flagship rural employment guarantee programme, rural development minister Jairam Ramesh has made changes to the programme's guidelines.


In a letter sent to all chief ministers, Ramesh announced a clarification to the operational guidelines of the Mahatma Gandhi National Rural Employment Guarantee Act, which would allow for use of funds to create durable assets.

The clarification relates to the wage material ratio set out in the 2013 guidelines.

It states that the ratio of wage costs to material costs should not be less than the minimum norm of 60:40 set out in the Act. "The 60:40 ratio for wage and material costs should be maintained at gram panchayat level for all works to be taken up by the gram panchayat and for works to be taken by all other agencies it should be maintained at the Block/Intermediate Panchayat level," the guidelines states.

"I have asked the ministry to issue a clarification that the wage material ratio shall be maintained at the gram panchayat level for 50% of the works that are to be mandatorily taken up at the gram panchayat level. For all other works, the wage material ratio needs to be maintained at the block level," the minister wrote.

This would allow for the aggregation of funds earmarked for works taken up under the rural employment scheme by agencies other than the gram panchayat and would include intermediate panchayats, district panchayats and line departments of the state government.

"This clarification would allow you to take up durable works that support the livelihoods of the most backward areas," Ramesh wrote to the chief ministers. Depending on the approved labour budgets for the year, states will have anywhere from 102 crore to nearly 1,500 crore which they can use for creating durable assets at the block level.