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The Wages of Discontent by Aruna Roy and Nikhil Dey


The Union government is reneging on its legal obligation to pay minimum wages, even to the most deprived sections of the population, in the implementation of the Mahatma Gandhi National Rural Employment Guarantee Scheme.

If anyone wants to study the capacity of India's policymakers to turn a progressive piece of legislation upside down, the wage policy under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a good place to start. It has been used to blatantly violate and undermine the Minimum Wages Act, 1948 — one of the few means of protection for India's vast and exploited unorganised sector. The right to minimum wages has been recognised as a fundamental right by the Supreme Court of India, which has held non-payment of minimum wages to be a violation of Article 23 and therefore declared it to be “forced labour.”

In January 2009, the Ministry of Rural Development (MoRD) of the Government of India delinked MGNREGA wages from “minimum wages” through a notification, under Section 6(1) of the MGNREGA. This fundamentally undermined the sanctity of the Minimum Wages Act for all workers in India. Questions of (un)constitutionality have been considered and ignored, responsibilities passed from one government to the other, and fiscal concerns invoked to override fundamental, human rights and issues of morality and ethics.

Perhaps, even the limited success of the MGNREGA was too unpalatable for the few people who have steadily cornered most of the resources for themselves since Independence. Entrenched vested interests are adept at using their power and skill to entangle any potential or real benefits to the poor in a web of bureaucratic subterfuge.

The MGNREGA had proved its critics wrong in important ways. It had raised the earning capacity of the rural workforce. This happened without a budgetary emergency or fiscal collapse, as many economists had wildly predicted. In fact, the Act was seen as being responsible for shielding large parts of rural India from the ill-effects of the economic downturn. Even in places where the Act was not implemented very well, it had facilitated the capacity of workers to demand minimum wages from all employers, including feudal landlords and contractors. People asserted their right to work on an MGNREGA work site, rather than accept a lower wage. In fact, it is now clear that even more than the bogey of budgetary collapse, it is the impact on the availability of cheap labour that is the concern of the powers that influence policy.

An MoRD notification of January 1, 2009 capped MGNREGA wages at Rs. 100, and froze minimum wages in States where it was higher than Rs. 100 a day. The Government of India thus made it clear that it disregarded any responsibility to pay minimum wages. There had been disputes on the issue of minimum wages from the time of the drafting of the Act. Neo-liberal economists said there was a need for “a minimum below the minimum.” One of the “safety measures” that had been inserted by policymakers was the “non-obstante” clause that asserted: “Notwithstanding anything contained in the Minimum Wages Act 1948, the Central Government may, by notification specify the wage rate for the purposes of this Act.” Officials in the MoRD took the view that this allowed them to fix any wage rate, and State governments could pay what they could “afford.”

In Rajasthan the minimum actually functioned as a maximum, and now, even the maximum is below the “minimum wage.” Supposedly the humpty dumpty (non-obstante) clause would continue to protect the Minimum Wages Act. If all this sounds like complicated double-speak, it is. For instance, it allows the government to “legally” justify the payment of Rs. 1 a day to 99 workers in Tonk district. In this world of deliberate make-believe, technical is above legal, and legal above constitutional.

The Supreme Court held in 1983 that “where a person provides labour or service to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the meaning of the words ‘forced labour' and attracts the condemnation of Article 23… if anything less than the minimum wage is paid to him, he can complain of violation of his fundamental right under Article 23 and ask the Court to direct payment of the minimum wage to him so that the breach of Article 23 may be abated.”

The January 1, 2009 notification was discussed in the MoRD on July 10, 2009 and the Labour Department recorded its view thus: “Minimum Wages Act, 1948 guarantees minimum wages to workers and there cannot be a wage rate less than the minimum wage rate in any circumstances.” This was simply ignored, with the financial adviser in the MoRD asserting that “the wage rate notified under section 6(1) is independent of Minimum Wages Act 1948.”

Labour groups took the non-payment of minimum wages to the Andhra Pradesh High Court, which suspended the January 1, 2009 notification of the MoRD. The Andhra Pradesh government was ordered to pay the notified minimum wage of the State. The Central government reviewed the matter in a meeting and decided to pass the burden on to the States. The financial adviser and the Additional Secretary stated: “Our stand with the Andhra Pradesh Government should be that while the State Government is obliged to pay the minimum wages as notified by it, the GoI shall reimburse the amount to the extent permissible under Section 6(1) of MGNREGA.”

The States say they do not have the money to pay, and believe they should be provided 100 per cent of the wage component by the Central government, as Section 22 (1) of the MGNREGA says the Central government shall meet the cost of... (a) the amount required for payment of wages for unskilled manual work under the scheme;” Since the Central government refuses to pay beyond its notified wage rate, the States have passed the burden on to the workers. In Andhra Pradesh, as in Kerala, Bihar, Himachal Pradesh, Karnataka, Jharkhand, Chhattisgarh, and now Rajasthan, MGNREGA workers are being paid less than the minimum wage by the respective governments. The Andhra Pradesh government wrote to the MoRD on August 12, 2009 pointing out that the State and Central governments “face the risk of contempt of court,” but this fell on deaf ears.

Additional Solicitor General Indira Jaising provided a legal opinion to a wage committee set up by the Central Employment Guarantee Council on Section 6(1), which was unequivocal: “The non-obstante clause in sub section (1) of Section 6 by itself will not enable the Central Government to fix a wage rate at a rate lower than what is provided under the Minimum Wages Act. The payment of wage below minimum wage would amount to forced labour.” Based on this the committee made an emergency recommendation that under no circumstances should the provisions of the Minimum Wages Act be overridden and that the notification under Section 6(1) of the Act should be withdrawn. The Ministry responded thus: “This is not feasible. The wage rates fixed under Section 6 (1) of the Act are distinct from the minimum wages. The provisions of the Act have to be respected.” The MoRD obviously does not see the need to pay the same level of respect to the Minimum Wages Act, the High Courts, the Supreme Court, and the Constitution of India.

The irony is that the Minimum Wages Act is being snuffed out by a showpiece legislation that is purportedly designed to liberate people from poverty and exploitation. The wage policy of the MoRD is, consequently, crippling the twin objectives of the MGNREGA — to provide 100 days of work a year with non-exploitative wages.

Keeping a drowning population's nose just above the water might be the government's concept of economic growth with a human(e) face. While the poor have to be subsumed by the financial crunch, the ineffective “steel frame” continues to get its dearness allowance of 10 per cent for six months, without batting an eyelid.

This hypocrisy must end. The country has to make up its mind whether the gloss will justify injustice and inequality. The writing on the wall is clear — insensitivity and continual erosion of basic rights will lead to conflict and violence. Both the MGNREGA and the Minimum Wages Act are “minimum measures,” where one needs to be used to strengthen the other.

At a time when claims are being made to the status of an economic superpower, the government has no moral or logical grounds to deny the obligation to the payment of minimum wages to the most deprived.

(Aruna Roy and Nikhil Dey are social activists who work in Rajasthan. They are at arunaroy@gmail.com and nikhildey@gmail.com)