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LATEST NEWS UPDATES | Centre May Match NREGA Payouts With Minimum Wages in States by Devika Banerji

Centre May Match NREGA Payouts With Minimum Wages in States by Devika Banerji

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published Published on Oct 17, 2011   modified Modified on Oct 17, 2011

The Centre is likely to raise remuneration under its rural job guarantee scheme and align it with the notified minimum wages of states following a court order last month. 

Millions of workers enrolled under the government’s Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) are entitled . 100 a day for a minimum of 100 days of work in a year. Despite the wage now being linked to the consumer price index, it is less than the notified minimum wages in six states. The Karnataka HC on September 23 directed the central government to bring these wages on a par with the minimum wages applicable in the states. 

“We are finding a way out without having to challenge the high court order. Personally, I have always been in favour of equating NREGA wage with minimum wage,” Rural Development Minister Jairam Ramesh told ET. 

The rural development ministry will consult the ministries of law and finance to gauge the ramifications of the order. 

According to the rural development ministry, aligning NREGA wages to the minimum wages in the six states (Andhra Pradesh, Rajasthan, Kerala, Karnataka, Mizoram and Goa) will cost the exchequer about . 1,800 cr. 

While it is likely to agree to wage parity, it wants checks on arbitrary increase in minimum wages by states. 

“We have to find a way of ensuring that there are no arbitrary increases in minimum wages by states,” Ramesh added. 

This is the second instance of a high court questioning the wage disparity. In July 2009, the Andhra Pradesh High Court had said payment below the minimum wage rate of states was unconstitutional. 

The issue was raised again in 2010 by the Sonia Gandhi-led National Advisory Council and the chief ministers of Andhra Pradesh and Rajasthan, the two states that have high demand for work under the social sector programme. They urged the prime minister to make payment of minimum wages mandatory under NREGA. However, the finance ministry opposed this citing limited resources. It was backed by the rural development ministry, which said the Centre would have to fund any arbitrary increase in minimum wages by states if the two rates were linked. 

Under Section 6(2) of NREGA, the rural development ministry was, prior to January 2009, paying agricultural wages of various states for the scheme. However, in 2009 it decided to have its own wage rate under sec 6(1) stating that NREGA and state wages are “statutorily delinked”.

The Times of India, 15 October, 2011, http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD/2011/10/15&PageLabel=8&Entity


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