Supreme Court upholds verdict matching NREGA pay with state wages

NEW DELHI: The Supreme Court has refused to stay a recent Karnataka High Court verdict that has said the central government is liable to pay higher wages under the country’s flagship rural employment programme in tandem with that of the state minimum wage rate. It has further asked the government to find a way to end the disparity between the wages paid under Mahatma Gandhi National Rural Employment Act (MGNREGA) and state mandated rates under the Minimum Wages Act.

The move might mean an additional outgo of around Rs 900 crore in the current financial year from the central government to six states which have a minimum wage rate that is higher than the MGNREGA rate. The Karnataka High Court had in September directed the central government to match the wages under MGNREGA with the state’s minimum wage rates.

The central government had however decided to file a Special Leave Petition to the SC contesting the order. The SC, however, stayedthe order on the payment of arrears prior to the Karnataka high court order providing the central government some relief. The Court stated that non-payment of minimum wages under the scheme is tantamount to forced labour.

It had further strongly urged the Solicitor General to harmonise the MGNREGA wage rates with minimum wages in a manner in which the state Minimum Wages Act is respected. The court also said that the matter should not be treated in an adversarial manner and asked the government to resolve the issue in a consultative manner.

Earlier rural development minister Jairam Ramesh had favoured softening the central government’s stance by complying with the KHC order while suggesting an amendment to create a special wage rate for MGNREGA under the Minimum Wages Act to tackle the issue on a long term basis.

Ramesh, however met opposition from the Finance Ministry and the Law Ministry and on the insistence of PM Manmohan Singh had to file the SLP. The six states with disparate wage rates are Andhra Pradesh , Rajasthan, Kerala, Karnataka , Mizoram and Goa.