In volte face, Centre to accept minimum wages for NREGA

The Centre is set to accept ‘minimum wages’ under the job guarantee scheme, apprehensive that taking such action later, on the possible directives of the Supreme Court, would show it as reluctant to give higher wages to the poor. Rural development ministry will soon seek Cabinet approval to make wages of MGNREGA at par with Minimum Wages Act prevailing in states. It marks a government volte face after it moved the apex court against a Karnataka High Court ruling that wages under the job scheme could not be less than minimum wage rate fixed under MW Act. At the core of the dispute is a provision in MGNREG Act (clause 6-1) which empowers the Centre to notify wages, irrespective of the MW Act. The provision, in essence, states that the job scheme was not bound by the “floor remuneration” to be paid to workers, a fact disputed by social activists. While a harried government feared the Karnataka HC order would increase the cost of the central scheme manifold, many including RD minister Jairam Ramesh felt that challenging the HC order would be seen as denying higher wages to the poor. It would be politically counter productive. The initial reaction, not encouraging, in the apex court seems to have nudged the Centre to be proactive in bringing the MGNREGA in sync with MW Act. It is feared that a negative verdict could leave the Centre stranded, having to bear higher costs of the job scheme without the credit of giving increased wages. However, the Centre may be playing a little game to guard against arbitrary hikes in minimum wages by states to extract more money from Delhi. It has proposed to amend clause 6-1 to read that while Centre would notify the wages, it would ensure that “the first time” these wages are not less than MW Act. At the same time, it wants to tweak the clause about funding pattern. Instead of committing the Centre to “meet the cost of amount required for payment of wages”, the RD ministry wants it to read that Centre would meet the cost of wages as determined by the Centre (under 6-1) It means that after ensuring that wages fixed are not less than MW Act, the Centre would be at liberty to not hike the wages even if states revised their minimum wages. It would deter the states from assuming that hike in MW Act would automatically fetch them total reimbursement of wage outgo under MGNREGA.