Govt decides to raise job plan wages by 25% | delhi | Hindustan Times
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Govt decides to raise job plan wages by 25%

The government on Thursday decided to increase wages under the Mahatma Gandhi National Rural Employment Guarantee Scheme by around 25% from January 1.

delhi Updated: Jan 07, 2011 00:23 IST
Chetan Chauhan

The government on Thursday decided to increase wages under the Mahatma Gandhi National Rural Employment Guarantee Scheme by around 25% from January 1.

However, as the new wages are still lesser than minimum wages in some states the government decision may be challenged in court as paying wages less than minimum wages is an offence under the Minimum Wages Act. "The possibility cannot be ruled out," an official said.

However, rural development minister CP Joshi said, "The MGNREGA law does not say anywhere that wages have to be at par with minimum wages."

Announcing the decision, Joshi said the National Advisory Council recommendations were considered and the government decided the best way for automatic increase was linking it with annual inflation rate.

A committee headed by plan panel's senior principal advisor Pranob Sen had recommended a 25% increase in wages. It had also examined increase in inflation state-wise. The rural development ministry has thus come out with different wages for different states.

"Each year as per the indexing the wages will be enhanced. Every five years the base of R100 will be revised based on the Sen panel recommendations…" he said.

MGNREGA wages were not linked with minimum wages when the law was drafted by Sonia Gandhi-headed NAC in its first avatar as wages under minimum wages Act in certain states were very low.

Sonia Gandhi had suggested in the NAC's second avatar that MNREGA wages be linked with minimum wages. This was rejected by the rural development ministry and the planning commission. "We don't have any problem… if the states are willing to bear the additional tab," a plan panel official said.

Thursday's decision will add an annual financial burden of over R12,000 crore from the present budget allocation of about Rs 40,000 crore.