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LATEST NEWS UPDATES | HC: NREGS wages can’t be less than minimum wages by Ravish Tiwari

HC: NREGS wages can’t be less than minimum wages by Ravish Tiwari

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published Published on Oct 7, 2011   modified Modified on Oct 7, 2011

After firefighting the controversy over poverty line cut-off, the Congress-led UPA government may find itself in trouble on the matter of NREGS wages.

In a judgment late last month, the Karnataka High Court ruled that wages under the UPA’s flagship rural job guarantee scheme “shall not be” less than the minimum wages fixed by state governments under the Minimum Wages (MW) Act.

The decision will re-open the tussle between Sonia Gandhi-led National Advisory Council (NAC) and the government over linking NREGS wages with the Minimum Wages Act. The debate had been put to rest in January this year after the government decided to bypass the NAC suggestion to link the two.

“...the power exercisable by the Central government under Section 6(1) of (NREG) Act 2005 to notify the wage rate shall be in such manner that the wage rate notified shall not be less than than minimum wages fixed by the state government under Section 3 of MW Act, 1948, for agricultural labourers applicable to that area,” reads the high court order.

By a 2009 notification, the Rural Development Ministry had fixed NREGS wages in Karnataka at Rs 82 a day as against Rs 119.42 minimum wages fixed by the state government.

A petitioner had moved the Karnataka High Court seeking to declare Section 6(1) of the NREGA empowering the Centre to notify the wage rate as unconstitutional, and seeking quashing of the Centre’s notification fixing the wage at Rs 82 a day.

The high court decision will also cast its shadow on the fiscal situation, with the court ordering that arrears be paid to NREGS workers in Karnataka since January 2009. If the same is replicated across the country, total arrear burden could amount to Rs 3,500 crore as per a rough estimate by the Rural Development Ministry.

It was in December last year that Prime Minister Manmohan Singh had written to Sonia asserting that the government had decided to delink wages under the NREGS and MW Act. Both the Rural Development Ministry then under C P Joshi and the Finance Ministry under Pranab Mukherjee had been in favour of delinking.

Subsequently, the Rural Development Ministry had decided to revise the NREGS wages to a minimum floor level of Rs 100 a day, as promised by the Congress in its manifesto during the 2009 general election. It had also decided to index NREGS wages with the consumer price index revised every year.

Despite this, the revised NREGS wages fell short of minimum wages prevailing in a clutch of states such as Kerala, Andhra Pradesh, Karnataka and Rajasthan. Currently, for example, while the NREGS wage for Karnataka is Rs 125, the minimum wage in the state is Rs 134.

Incidentally, a petition similar to Karnataka’s is pending in the Andhra Pradesh High Court.

While the government has three months to appeal against the Karnataka High Court decision in the Supreme Court, former NAC member Jairam Ramesh who is now at the helm of the Rural Development Ministry is not likely to act in a hurry.

“A solution without appeal is preferable. It has to be a political decision with fiscal implications in mind,” a cryptic Ramesh told The Indian Express on Tuesday.

The Indian Express, 5 October, 2011, http://www.indianexpress.com/news/hc-nregs-wages-cant-be-less-than-minimum-wages/855928/


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