Imbalance...

Article;
Revise pay under minimum wages act MNREGA every 5-years.

Comment;

MGNREGS has created shortage of unskilled labor in the construction which has pushed up wages and prices in the realty sector... Both the construction and MGNREGS mostly consume unskilled labor… But, MGNREGS provide minimum wages and the private construction sector has no such limitation… The construction sector is giving higher wages to lure labor which has created a wage-price spiral resulting in higher inflation; moreover rural wages too saw an increase, and, is too responsible for higher demand and inflation due to supply-mismanagement… This year too we had a good monsoon which may will result in higher rural demand, especially for food and fuel and prices will increase, and, wages will follow, in the construction too… Therefore constrained by the supply side we have no rescue against prices rise until we control demand in the short-run and improve supply side in the long-run… We know prices in the construction in INDIA too have seen the higher side… why…? …because wage cost has increased… Therefore we need to constrain demand in the construction which is creating wages, demand, and, inflation… To control inflation we need to discourage demand for houses, not much… but only to discourage too much divergence between the nominal and real prices which is also to say in an indirect way to reduce inflation… I think the RBI needs to reduce demand to supply in the construction by increasing interest rate… Over-supply in one sector and under-supply in the second (imbalance)…