The PMO has pushed for major changes in the Minimum Wages Act and MGNREGA.
The changes — to do with payment of wages under the rural right to work scheme — are to avoid a clash between the two laws dealing with the aam admi. It would also save the government from future confrontation with the courts and the states.
The issue of what the NREGA worker should be paid is still a controversy and is before the Supreme Court. Recently, the Karnataka high court ordered payment of minimum wages to NREGA workers in place of a centrally decided wage as followed now.
Though the PMO asked the rural development ministry to challenge the order to avoid huge financial implications of over R10,000 crore, the PMO has simultaneously suggested several changes in legal provisions to put an end to the controversy.
Wage is both a political and financial challenge under NREGA whose budget in 2011-12 is R40,000 crore.
As of now, 11 states, including Andhra Pradesh, Karnataka and Rajasthan, where NREGA is doing well, are paying wages less than the minimum. A special leave petition against the HC order is coming before the SC next week.
Amendments to the two laws would basically keep rural job plan wages in a special category within the statutory guarantee of Minimum Wages Act. “Insertion of a new section (5A) for determination of NREGA wages in the MWA would resolve the dilemma while subjecting the process to safeguards of wages act,” a PMO note to cabinet secretariat suggested.
The PMO, based on recommendations from the rural ministry, also wants the definition of “Appropriate Government” in MWA amended, to state that in case of NREGA the Appropriate Government would be the centre. The suggestion comes from the fear that if made to pay minimum wages, the states might arbitrarily hike the minimum wages, forcing the Centre to pay more under the scheme.