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Sreelatha Menon: NREGA vs Minimum Wages Act

Last week, NAC gave a wake-up call to the government on the need to pay minimum wages under NREGA

Sreelatha Menon  |  New Delhi 

Can the government break its own laws? That seems to be the case when it comes to minimum wages in the National Rural Employment Guarantee Scheme (NREGS), which makes the government the employer of the world’s largest workforce of close to 35 million job-card holders.

In 19 states, the workers are getting less than the minimum wages in their areas, with the rural development ministry and the labour ministry looking the other way.

The National Advisory Council, headed by Sonia Gandhi, the president of the ruling party, last week recommended that minimum wages be paid to NREGS workers. This brings the government in direct conflict with NAC.

The rural development ministry froze the minimum wage for NREGS at Rs 100 two years ago and has not bothered to revise it annually by indexing it to the consumer price index for agricultural workers (CPI-AL), as prescribed by its own committee on wages, headed by Jean Dreze.

Will NAC recommendation wake up the government to the violation it has overlooked so far?

The employment guarantee Act is in conflict with the Minimum Wages Act as NREGS wages are fixed by the Centre and minimum wages in most states are much higher than that. As the Centre has fixed Rs 100 as the NREGS wage, the states, with the exception of Goa, are not feeling obliged to pay more.

The implementation of NAC’s recommendation could mean that either the states’ laws apply or the Centre revises the minimum NREGS wage.

At present, there is no parity between the two rates. If the NREGS wage is Rs 100 in Rajasthan, the minimum wage in the state is Rs 135. In Kerala, the minimum wage is Rs 175, while NREGS pays Rs 120.

According to Additional Solicitor General Indira Jaisingh, any payment below the minimum wage is forced labour. So, the government is violating its own law for its largest employment-generation scheme.

The rural development ministry now has the option of issuing a notification saying the states can enforce their minimum wages for NREGS or defreeze the Rs 100 wage it had prescribed and link it to CPI-AL.

The ministry had asked a committee headed by Pronab Sen under the Ministry of Statistics and Programme Implementation to fix a NREGS minimum wage indexed to CPI-AL. Five months have passed and the panel is yet to give a report.

The Dreze committee on wages had sought an amendment to the employment guarantee Act as there was a possibility of it clashing with the Minimum Wages Act.

Section 6 (1) of the National Rural Employment Guarantee Act says the Centre can specify wage rates for this Act. The states can make variations but not go below the minimum rate specified by the Centre. This could mean violation of the Minimum Wages Act in many states, as is happening now. However, Section 6 (2) says agricultural wages should be paid till a separate rate is fixed. As long as state wages are paid, there is no conflict. But after the Centre fixed the rate, first at Rs 80 and then at Rs 100, the gap with minimum wages has been growing in the states.

NAC, as in the matter of food security, stops with a broad recommendation and does not suggest the ways it can be put into practice. While recommending food subsidies, it does not say how leakages can be plugged and food production can be increased. So with NREGS.

It does not say if the employment guarantee Act should be amended to ensure that minimum wages are paid or whether the Centre should defreeze its wage and index it to CPI-AL or just let the Centre mandate whatever the state rates are.

Anyway, the more important question is whether the government of India wants to follow its own laws.

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First Published: Sun, October 31 2010. 00:11 IST