Stay rejected on high court order

The Supreme Court on Monday refused to stay the Karnataka High Court ruling of September 23 that the Centre must pay the legal minimum wage set by each state to those hired under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Since each state has its own calculation, the Centre would have to take into account the minimum wage in each state while making allocations for the flagship scheme. The additional burden, though, would only be around Rs 1,000 crore a year, as minimum wages exceed those of the MGNREGS in only four states, said activist Nikhil De, who has been demanding that the minimum wage law bind the scheme. The apex court, however, did not uphold the HC ruling that arrears in this regard be also paid to the workers, after Union Solicitor General Rohinton Nariman argued it would have hugely adverse financial consequences. The petition is an appeal by the Union ministry of rural development  against the HC ruling.

The bench of judges Cyriac Joseph and Gyan Sudha Misra indicated to Nariman the matter not be taken up in an adversarial manner. It was legislation meant to benefit the poor, they noted. The judges went on to issue notices to all the parties; the next hearing would be after three weeks.

The Centre has the option of implementing the HC verdict as it stands, or proceed to amend the Minimum Wages Act to exempt the MGNREGS from its purview. Or, to fix an appropriate minimum wage by central legislation, something which doesn';t exist at present. Two years before, it had already issued a notification under the NREG Act, to fix the wage there by executive order and freezing it at that level, regardless of state minimum wages. There was also a provision in the 2005 law enacting the scheme, which the Centre argued before the HC would override the minimum wage ambit.

PAY CHECK
	StateStates’ minimum wage (Rs)	Wages under MGNREGA (Rs)
Karnataka	133	125
Rajasthan	135	119
Andhra Pradesh	169-112

121 Punjab154.4153 Jharkhand127120 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

The HC rejected both pleas. And said non-payment of minimum wages also violated at least two articles (14, on equality before law, and 23, on protection of humans against traffic and forced labour). It had also referred to a similar case brought before the SC earlier, where the apex court had ruled, “The state cannot under the guise of helping... affected persons extract work of utility and value from them without paying the minimum wage.”

A similar ruling was given by the Andhra HC two years ago, upholding payment of minimum wages to MGNREGS workers. Union rural development minister Jairam Ramesh had said till a few weeks earlier that he was in favour of going along with what the HC had said. Later, the ministry reverted to its original position, allegedly under pressure from the Prime Minister’s Office, and chose to file a petition against the HC verdict.

Economist Pronab Sen has argued for states being made responsible for paying the minimum wages under the MGNREGS. However, he also noted the Act would need to be amended for this.