Volume 28 - Issue 03 :: Jan. 29-Feb. 11, 2011
from the publishers of THE HINDU

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Wages of tokenism


The revised daily wage for NREGS workers is still lower than the minimum wages paid in several States.


PRIME MINISTER MANMOHAN Singh and UPA chairperson Sonia Gandhi at Mahatma Gandhi NREGA Sammelan 2010 , in New Delhi in February 2010. Wages of NREGA workers were revised after Sonia Gandhi brought the matter to the Prime Minister's attention.

A CONTROVERSY seems to have surfaced between the Prime Minister's Office and the National Advisory Council (NAC) on the issue of wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The NAC has been arguing for some time that there should be parity between wages under the National Rural Employment Guarantee Scheme (NREGS) and the minimum wage paid in the States. In some States, the minimum wage is much higher than the ceiling of Rs.100 prescribed under the NREGS.

Apart from the NAC, agricultural workers' organisations and political parties, including the Left parties, have objected to the existing daily wage under the NREGA. The demand for a revision has become strident now given the rise in prices of essential commodities and basic food items. Social audits conducted in the States have also highlighted complaints raised by labourers about the measly disbursement and also diversion of the sanctioned amount.

The present brouhaha began following a communication from NAC head and United Progressive Alliance (UPA) chairperson Sonia Gandhi to Prime Minister Manmohan Singh on November 11 last year. She wrote that workers under the NREGS were being paid less than the statutory minimum wage. Additional Solicitor General Indira Jaising held that the payment of wages below the minimum wage would amount to forced labour.

In his reply, the Prime Minister explained that the wage rate fixed by the government could be indexed to inflation and not to the Minimum Wages Act of 1948.

The UPA government then came up with a new structure whereby wages under the NREGA would go up from 17 to 30 per cent, keeping Rs. 100 as the base wage and linking it to the Consumer Price Index. The revised wages came into effect on January 1 this year. Even this is not adequate to meet the inflation and is still less than the minimum wages paid in several States, critics argue.

Rural Development Minister C.P. Joshi said that the revision was effected after detailed discussions. His Ministry's suggestion to double the number of days and link the wages to the annual inflation rate was ignored.

Joshi said the Ministry was looking forward to the report of the committee headed by Pranab Sen, Secretary in the Ministry of Statistics and Programme Implementation, on the matter of fixing an NREGS minimum wage indexed to the Consumer Price Index for Agricultural Labour (CPIAL).

It was in January 2009 that the Centre fixed the wages to be paid under the NREGA at Rs.100. But at least 19 States – Kerala, Rajasthan (where the hike came into effect recently), Andhra Pradesh, Chhattisgarh, Jharkhand, Bihar and Karnataka – were paying more than Rs.100 a day.

A subcommittee of the NAC had sought an amendment to the NREGA, given its potential to clash with the Minimum Wages Act, but this has been ignored by the government. Section 6 (1) of the NREGA says the Centre can specify wage rates; the States can make variations but cannot go below the minimum rate specified by the Centre.

As the gap between the NREGA-stipulated wage and the minimum wages in different States increased, it created unrest between different classes of workers, induced employers to violate the Minimum Wages Act by reducing agricultural wages and rendered irrelevant the NREGS' objective.

Reactions of workers' organisations

Vijoo Krishnan, an office-bearer of the All India Kisan Sabha (AIKS), said it was peculiar that the government appeared to show a progressive and sympathetic attitude towards agricultural workers and at the same time rejected the very proposals meant for their uplift.

The All India Agricultural Workers' Union (AIAWU) said the Prime Minister had betrayed the interests of the toiling masses by delinking NREGA wages from the Minimum Wages Act at a time when his government had failed to control the prices of essential commodities.

AIAWU general secretary A. Vijayraghavan and president P. Ramaiah said that the move was a deliberate ploy to deny MNREGA workers the possibility of getting higher minimum wages statutorily fixed by different States. It violated the constitutionally guaranteed rights of the workers and threatened the minimum wage system, which acted as a guarantee against arbitrary changes and inflation, they said. They pointed out that the 19 States that guaranteed a minimum wage higher than Rs.100 “reflected a greater sensitivity to high inflation”.


WORK ON FLOOD banks in progress under the National Rural Employment Guarantee Scheme at Panchrukhia village in Patna district of Bihar. At least 19 States, including Bihar and Jharkhand, were paying more than Rs.100 a day even before the January 2009 hike came into effect.

The AIAWU is of the opinion that indexing the wage rate under the NREGA to the CPIAL will not raise the wages of NREGA workers to the statutory minimum wages fixed in many States. Even after indexing, the MNREGA workers in Kerala, Andhra Pradesh, Chhattisgarh, Goa, Karnataka and Mizoram would get less than the prevailing statutory minimum wages, the AIAWU leaders said.

The UPA government had claimed that it would protect a real wage of Rs.100 a day by indexing the wage rate to the CPIAL, they pointed out. However, this base wage of Rs.100 would be reset only in 2014. Whatever increase would accrue then would be a pittance when compared with the rise in the prices of essential goods, they said. Thus the efforts of State governments to fix socially just wages would be diluted. The Kerala government and the AIAWU have demanded that the wages payable under the MNREGA must be at least Rs.200 a day. The AIKS, on its part, has demanded that the number of days of employment be increased from 100 to 200.

The AIAWU feels that as in the case of the Food Security Act, the government decision on the NREGA wages is “an attempt to subvert the programme and to shirk its responsibility of paying higher minimum wages”. Organisations such as the Rajasthan-based Mazdoor Kisan Shakti Sangathan (MKSS), which has a long history of doing social audits in the State, also protested against the decision.

The Minister of State of Labour and Employment said in November 2010 that the minimum wages in the Central sphere for unskilled workers and for all scheduled employment ranged from Rs.146 to Rs.163 higher than the NREGS wage. The minimum wage was the highest in Delhi, Rs.203, followed by Kerala, where for unskilled agricultural workers the rate was Rs. 200 for hard work and Rs. 150 for light work (which was higher than what most States gave for what would be construed as hard work). In Punjab and Haryana, which received many migrants, the wages for agricultural work were Rs.127 and Rs.167 respectively.

The National Federation of Indian Women (NFIW) too has protested against the government decision. The organisation said that it was a known fact that MGNREGA helped poor workers get better wages for their labour in the unorganised sector, especially agriculture. The Prime Minister, it said, had taken this decision to protect the interests of big farmers, who were known for violation of the Minimum Wages Act. Accusing the government of double standards, it said the decision would create an illegal precedence of payment of wages below the minimum wage. The worst victims would be women, who constituted 52 per cent of the total workforce employed under the NREGS; 42 per cent of NREGS workers belonged to the Scheduled Castes and Scheduled Tribes. The NREGS, the organisation said, had been created under an Act of Parliament and hence the government was the principal employer.

Reports and bills

The report of the National Commission for Enterprises in the Unorganised Sector (NCEUS) found that in 2004-05, 90.7 per cent of agricultural labourers, 64.5 per cent of rural workers and 52.3 per cent of casual non-agricultural workers received wages below the national minimum wage designated by the Central government (Rs.66 a day). Even 57.3 per cent of unorganised regular workers in rural areas and 47.2 per cent in urban areas received wages below this minimum.

The report stated that the 37th session of the Labour Ministers' Conference held in 1987 was of the view that the problem was not one of lack of Central legislation, but one of implementation of existing laws such as the Minimum Wages Act, the Equal Remunerations Act and other such laws applicable to workers in the unorganised sector, including agricultural workers.

The Unorganised Sector Workers Social Security Bill, 2004, which was passed by Parliament in December 2008, set provisions for minimum conditions of work, including an eight-hour work day with a 30-minute break; overtime at twice the ordinary rate of wages; and payment of wages at rates not less than the statutory minimum wages.

The NCEUS had mooted a concept of minimum wages. This, it said, depended on the minimum needs of the worker and his/her family which should be met by the wage earnings and the particular industry's capacity to pay. In general, there must be an irreducible ‘minimum', which must correspond to a basic subsistence that minimum wages must meet. In its report, the NCEUS recalled that way back in December 1947, the Government of India had appointed a Central Advisory Council to advise on issues of fair wage to labour and fair return on capital. This council appointed a high-powered tripartite committee called the Committee on Fair Wages, which was asked “to determine the principles on which fair wages should be based and to suggest the line on which these principles should be applied”.

“The Committee, in its report submitted in 1948, drew a distinction between ‘minimum wage', ‘fair wage' and ‘living wage'. ‘Minimum wage', according to the committee, should provide for the maintenance of the efficiency of the worker as well as his other (current) basic needs,” observed the NCEUS report. Even a cursory look at the three categories reveals that the NREGS daily wage of Rs.100 in today's inflationary environment does not fall in any of these.

A minimum wage, according to this committee, must provide not merely for the bare sustenance of life but for the preservation of the efficiency of the worker. For this purpose, the minimum wage must also provide for some measure of education, medical requirements and amenities.


WORKERS ENGAGED IN weeding at a kole wetland near Thrissur in Kerala. The Kerala government has demanded that the wage payable under the NREGA must be at least Rs.200 a day since the minimum wage in the State is higher than the NREGA wage.

In 1957, the 15th Session of the Indian Labour Conference (ILC) emphasised that “minimum wage should be need-based in order to ensure minimum human needs of the industrial workers”. In 1992, the Supreme Court of India ruled in Raptakos Brett and Co. vs its workmen that children's education, medical requirement, minimum recreation, including festival/ceremonies and provision for old age and marriage should further constitute 25 per cent of the total minimum wage and used as a guideline in determining minimum wages.

On the basis of these and other recommendations, the NCEUS devolved certain parameters to determine the national minimum wage. These included the monthly per capita consumption expenditure corresponding to the poverty line, the average size of labour households, the average ratio of dependents and earners in labour households and the average of total number of days of employment as brought out by the National Sample Survey (NSS).

The NCEUS said that the national minimum wage could be fixed for the country as a whole, on the basis of the above parameters, and the same could be adjusted for rural and urban areas and different States, as is done for estimating poverty lines at present. The unions too were hopeful of a basic national floor level wage – they had definitely not expected it to be Rs.100 a day.

What is clear is that the NREGA has taken off only where there have been active interventions by agricultural workers' unions and farmers' and women's organisations. Organisations such as the All India Democratic Women's Association (AIDWA) have constantly pointed out the harsh productivity norms linked to wages, which have denied many workers, women included, their minimum wages. The organisation observed that owing to the sheer hard labour involved in the nature of work under the NREGA and the piece-rate system of wages, many women fell sick, missed work or were unable to collect their full wages.

While there is a broad agreement that the NREGA as a concept was a radical piece of legislation, there is a strong feeling that the time has arrived to go beyond tokenism and to extend the entitlements under the Act in order to make it meaningful.

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