House panel seeks parity between NREGA, minimum state wages

NEW DELHI: A parliamentary panel has asked the Centre to bring parity between wages under the rural employment guarantee programme and those given by states for agricultural labour under the Minimum Wages Act.

The recommendation of the panel, headed by BJP leader Sumitra Mahajan, comes as a shot in the arm for the rural development ministry’s proposal to link wages under the rural employment programme and the minimum wages notified by the state.

Currently, wages under the MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) is linked to the consumer price index. However, it is less than the minimum wage set by the state government for agricultural labour in eight states.

The Congress is ruling or part of the government in five of these—Andhra Pradesh, Jharkhand, Kerala, Mizoram and Arunachal Pradesh. The other three states are Bihar, Madhya Pradesh and West Bengal. Bringing NREGA wage rates on a par with minimum wage rates in these states will cost the Centre approximatelyn Rs 2,000 crore more every year. The issue is also pending before the Supreme Court.

In April last year, the apex court had asked the solicitor general to discuss the issue with the petitioners and “amicably resolve the matter respecting the law of minimum wages”.

The compromise worked out by the rural development minister Jairam Ramesh links MGNREGA wage rates to minimum wages while at the same time cushioning the Centre from arbitrary hikes in the minimum wage rate by state governments.

The central government had been reluctant to link wages under MGNREGA with the Minimum Wage Act as it is apprehensive that states will arbitrarily increase the minimum wage rate. Uttar Pradesh, for instance, raised minimum wage for agricultural labour four times in 2008 from Rs 58 to Rs 100, while Gujarat has revised it only once since the enactment of the rural employment scheme.

The government has also maintained that work under MGNREGA provides a host of other benefits to the workers, which is otherwise not available to agricultural labour. “Benefits” include employment within radius of 5 km — if workers travel beyond that, then they are eligible for an additional 10% — free medical treatment for injury and hospitalisation.