Maximum Dithering for Minimum Wages!
A letter from the Prime Minister Manmohan Singh to UPA and NAC Chairperson Sonia Gandhi dated 31 December, 2010 effectively communicated that Government does not see the need to pay statutory minimum wages to MGNREGA workers. (Ostensibly in reply to Mrs Gandhi’s letter of November 11, 2010 recommending the payment of minimum wages. The immediate background to her letter to PM was a 47-day-long dharna and padayatra in Jaipur. See links below for details).
SWAMI AGNIVESH underlined the main message of the two day seminar reiterating the Supreme Court interpretation that payment of wages below the statutory minimum wages was tantamount to bonded labour. He argued that the existing minimum wage policy of the Government is irrational. The 6th Pay Commission has raised the salaries of the government employees but it has failed to address the improvement in wages of the unorganized sector workers. Swami Agnivesh opposed Kaushik Basu’s idea that rise in minimum wages can lead to labour displacement and hence cash transfer is a better option. He mentioned the Sanjit Roy versus State of Rajasthan case that was held in 1983 (see the link:
NAURATTI BEN, who is a Sarpanch in Ajmer district and a social activist in her own right formally inaugurated the seminar. Nauratti Ben was one of the women demanding minimum wages in the Sanjit Roy versus State of Rajasthan case. She spoke of workers’ rights and the need for grassroots action for change.
JUSTICE AP SHAH (Retired Chief Justice of High Court of Delhi) said that Part IV of the Indian Constitution talks about hopes and aspirations of the poor. He noted that if minimum wages were not paid then it could lead to violation of Article 14 and Article 39 (d), which ensures equal remuneration for equal work. Employers cannot deny paying minimum wages if one considers Article 21, which ensures right to live with dignity. He criticized the Government’s decision of not paying statutory minimum wages to the NREGA workers.
MONTEK SINGH AHLUWALIA (Deputy Chairperson, Planning Commission) said it was upto to the courts to decide whether minimum wages should be paid or not in the MG-NREGA works. He, however, agreed that wage rates in the rural areas got upward push thanks to the NREGA.
ARUNA ROY (MKSS) reiterated her position of not settling for anything less than the minimum wages under NREGA. Indexing will be helpful when statutory minimum wages are paid. According to her calculation, Rs. 1270 crore would be the extra cost for paying minimum wages in 11 states where the NREGA wages are below the minimum wages. She charged that the Ministry of Rural Development was unable to ensure minimum wages to the NREGA workers and that the market on its own can’t help the workers and that is why the Government must intervene.
COMRADE D RAJA from CPI said that the Left in the UPA 1 had wanted the provision of 180 days of work under NREGA. However, on the basis of consensus it was agreed that the scheme may start with 100 days of employment guaranty. The present government has frozen the wages under NREGA. He also said that the NREGA has actually led to making right to work as a fundamental right and that neither the judiciary nor the Government could violate the minimum wage payment under NREGA.
HARSH MANDER, (former IAS Officer and Right to Food campaigner) pointed out that the current discourse on rise in the rural wages due to NREGA, leading to conflict between farmers’ interest and workers’ interest, was a wrong notion.
PROF. JAYATI GHOSH of JNU disagreed to Montek S Ahluwalia’s suggestion that the issue of payment of minimum wages under NREGA should be fought in the courts. The Minimum Wage Act is in existence since 1948. NREGA has reduced the wage gap between men and women. She spoke against the allegation that increased NREGA wages has pushed up rural and agricultural wages which has adversely affected farmers’ profit. She argued that labour cost is only 20-35 percent of the entire cost borne by the farmers. Farmers also rely on family labour. In fact, the higher cost of inputs (like seed, fertilizers, pesticide, electricity) is worrying the farmers as their prices have shot up more as compared to the cost of labour. Rise in labour cost is lesser than the rise in Gross Domestic Product (GDP). The development paradigm envisaged by the Government relies on corporate initiatives and more foreign direct investment (FDI). The wage led growth (via multiplier effect) under NREGA must replace profit led growth. .
Senior Supreme Court Advocate PRASHANT BHUSAN expressed his unhappiness over Montek S Ahluwalia’s remark that the issue of payment of minimum wages under NREGA must be sorted out in the courts. He agreed to Jayati Ghosh’s point that increase in rural labour wages is not affecting the farmers and, moreover, the increase in labour wages has been lower than the growth in GDP. If the Government is so much worried about the farmers, why it is then encouraging corporate farming, Bhusan asked. Privatization of the natural resources is quite rampant in India. Mining companies are earning huge profits in Karnataka by paying negligible royalties to the Exchequer. Tax havens like Mauritius are helping the corporate to increase investment by avoiding taxes and the corporate mafia is getting powerful by each day. The Government is only concerned about economic growth. He regretted that the government is refusing to accept the NAC recommendation for universal right to food.
COMRADE SITARAM YECHURY from the CPI (M) said that the NREGA came into being after a long political struggle in which the Left parties and the civil society played a crucial role. It was earlier thought that NREGA would lead to wastage of money and instead the money spent on NREGA must be used for investment. It was a struggle to ensure minimum wages for NREGA workers under UPA 1. Like the dearness allowance, the NREGA wages must be indexed to CPIAL. The Government’s denial to pay minimum wages is actually violation of law and is tantamount to contempt of court.
TRILOCHAN SASTRY from IIM Bangalore and Association for Democratic Reforms (ADR) informed that the hike in salaries of the bureaucrats under the 6th Pay Commission took place after consulting them. However, the labourers were never consulted for hike in their wages. He asked for people’s pay commission, which will include representatives from the labourers. He cautioned that the ideology at IIM Bangalore is similar to that of the people in Dalal Street, Wall Street and even people in the Government. Their ideology is to infuse FDI for economic growth. Montek S Ahluwalia wants direct cash transfers instead of minimum wages, he alleged. There is no respect for poor people who have the right to live with dignity. That is why we have a scheme like UID. We should go for Bharat-India jodo abhiyan so that we arrive at a meeting point of ideologies. The capitalists are quite powerful as they can influence the academicians, politicians and bureaucrats.
BD SHARMA (poverty expert and former bureaucrat) said that mostly the SCs and the STs are employed in the unorganized sectors. The recent development paradigm which the country is witnessing is based on neo-liberalism and imperialism. Disparity in wage structure within the Government in 1970s was less as compared to the present times. He quoted the Article 23 of Universal Declaration of Human Rights which says that everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
HARISH RAWAT, Labour Minister, appreciated the agenda prepared by Swami Agnivesh. He said that the planners have planned as per the MGNREGA without taking into account Minimum Wage Act (1948). The debate that has generated from NREGA is good for a healthy democracy. The National Social Security Act that came in 2008 has helped in creating a fund of Rs. 1,000 crore. He also mentioned the Domestic workers (Registration social security and welfare) Act 2008. He congratulated the Ministry of Rural Development for indexing the wage under NREGA to CPIAL. He welcomed support from the Left parties and the civil society for progressive amendment of the Minimum Wage Act so as to ensure minimum wages for the NREGA workers.
SHANKAR SINGH from MKSS, Rajasthan said that despite inflation in food prices and hike in the salaries of the Government officials, there has been no revision in the wages of the NREGA workers.
KAUSHIK BASU, Economic Advisor, Ministry of Finance informed the gathering that his forthcoming book tackles the issue of inequality and said that the notion of minimum wage exists in every country. If one acts through minimum wages, then entrepreneurs can cut down labour and bring more machinery. He gave his logic to make a pitch for cash transfers to the poor. Unemployed persons need money in terms of direct cash transfers, he said, adding that there was a need for a feasibility study for bringing policy changes in this regard.
SUBHASH BHATNAGAR said that the minimum wage for construction worker is Rs. 205 per day but in reality they receive only Rs. 110. The construction workers who were employed during and prior to the CWG 2010 did not receive minimum wages. There is need for fast track and mobile courts to address their grievances, he said.
ASHOK KHANDELWAL, ex-faculty VV Giri National Labour Institute said that there is need for changes in the Minimum Wage Act regarding the principles of wage fixation. Revision of minimum wages is not mandatory and that certain sectors (types of employment) are exempted from minimum wages. Minimum wage should be applicable to all the sectors including domestic workers. In only 8 states, Minimum Wage Act is applicable to the domestic workers. Linking of minimum wage to inflation is not mandatory. Criteria for wage fixation should be there in the Minimum Wage Act.
Retired Chief Justice of the Supreme Court, JUSTICE JS VERMA, said that non-payment of minimum wage is nothing but violation of human rights. Wages can’t be paid below minimum wage. He then quoted Article 21 which talks about right to life with dignity, Article 38 which talks about reduction of inequality and Article 39 which talks about providing livelihood. There is plenty of resource available with the Government. The Government must stop leakages and corruption. Resource crunch cannot be an excuse. India is becoming more feudal than the (erstwhile) princes and more colonial than the Britishers. If the Government can’t provide support to its people, it has no right to remain in power. Filing public interest litigation (PIL) in Supreme Court regarding the minimum wage payment can be helpful, he said. It is unconstitutional on the part of Government and law to exempt certain types of employment from minimum wage payment. He said that Article 43 mentions about living wages and not minimum wages. The Government will spend a lot on lawyers so as to stop payment of minimum wages under NREGA. The Supreme Court’s decision on minimum wages came way back in 1983. Suo motu cognizance can be taken into consideration. Civil society is important as all institutions are getting devalued. Public anger can be translated into proactive role and not violence. Minimum means ‘nothing below it,’ he clarified.
PROF. MOHAN GOPAL from National Judicial Academy made 3 points: a. Minimum wages are a fundamental right, which cannot be violated by law or executive; b. The Supreme Court says that no wage structure can be revised to bring it below minimum wages; and c. Time has come for enforcement of Directive Principles of State Policy which talks about living wage.
Invoking five fundamental values of the Indian freedom movement, i.e., Satya (Honesty), Ahimsa (Non-violence), Swaraj (Sovereignty), Antyodaya (working for the poor) and Sarvodaya (Progress of all), Prof. Mohan Gopal concluded that the Antyodaya (or the rise of the last person) is the basic tenet of the Constitution. He warned that the market driven forces cannot determine values. To him provisions of living wage, equal remuneration and collective bargaining power were present in the Constitution. The concept of living wage is much broader than the concept of minimum wage as it talks about frugal comfort and expenses to be made on health, education and risk aversion. Living wage is more than fair wage, which in turn is more than minimum wage. In 1950, the Constituent Assembly opted for living wage and not minimum wage. The notion of living wage has been diluted in the last 60 years. It would be a death sentence to people if the Government says it can’t pay minimum wage. The International Labour Organization (ILO) says that minimum wage provide floor to the wage structure. But presently the Government wants to go below the floor wage. It was actually a Living Wage Act (1948) and not Minimum Wage Act (1948). Minimum wages are a fundamental right under Article 21. One has to also consider Article 23 which has provisions against forced labour. He said that non-payment of minimum wages means violation of Article 14, which talks of equal remuneration for equal work. It was Justice Gajendra Gatkar in 1958 and in 1966 who said that revision of wage structure cannot be done to bring it below minimum wage. In 1992, the Supreme Court said that no revision in wages is permissible, not even on the ground of financial stringency. Section 6 of MGNREGA must be read subject to these provisions. According to Ambedkar, political democracy means one man, one vote, while economic democracy means one man, one value.
PROF. JEAN DREZE appreciated Prof. Mohan Gopal’s argument. Growth in the NREGA wages was lower than the growth in GDP. Overriding of Minimum Wage Act is unacceptable. MGNREGA cannot override Minimum Wage Act. There is no protection from downward revision of wages below minimum wages for the NREGA workers. A credible tripartite process to determine minimum wages has to be there. There are economic arguments which have been invoked in the business media against hike in minimum wages. (please refer to Rural job scheme minimum wage revised, risking inflation spiral by Ruhi Tewari & Asit Ranjan Mishra, Livemint, 7 January, 2011
ANNIE RAJA from National Federation of Indian Women said that NREGA has generated awareness about minimum wages. Mahatma Gandhi’s name was added before NREGA to insult him. 56 percent of women employed in NREGA are women. Majority of the workers under NREGA are SCs and STs. For empowering the SCs and STs, the Government must provide minimum wages. Cash transfer should be opposed. The Government must be criticized for giving financial support to the multinational corporations (MNCs). She found the Supreme Court judgment upholding the Kerala High Court order banning public meetings and rallies on roadsides as unfortunate. She critiqued both the Prime Minister and Montek Singh Ahluwalia for their stand vis-à-vis payment of minimum wages.
AMARJEET KAUR from All India Trade Union Congress (AITUC) agreed and endorsed what was discussed in the seminar. She asked for minimum wage, equal remuneration and collective bargaining. She alleged that regression from the Constitution is happening. Earlier the corporate sector was doing this and now it is being done by the Government. The Government is not ready to accept NREGA workers as workers. Trade unions of NREGA workers could not be formed in Rajasthan. However, some unions could be registered at certain districts of Punjab thanks to a few good people at the Labour Department. She criticized payment of honorarium to ICDS workers, ASHA workers under NRHM and Aanganwadi workers. The Government considers these workers as volunteers and not workers. They are paid a meager sum on a monthly basis. Minimum Wage Act is applicable to workers and not volunteers. She informed that all trade unions are going to the Parliament on 23 February, 2011 for raising the issues related to inflation, dilution of labour laws, job losses and disinvestment of profit making PSUs. She said that there are 43 crore unorganized workers in India and there is no budgetary allocation for social security.
MEDHA PATKAR from NAPM and NBA announced that she has been battling against Adarsh and Lavasa. She said that Minimum Wage Act is related to the right to livelihood. It is important to talk about values and not market forces. NREGA has supported the poor. But the World Bank’s World Development Report 2009 mentions that NREGA is artificially stopping rural-urban migration. (please check the links:
The following statement was passed during the seminar regarding payment of statutory minimum wages which was signed by eminent personalities (names given below) from all walks of life:
Open Statement for immediate release to the press January 18th, 2011
Government of India Must Immediately Stop Perpetuating Forced/Bonded Labour
We the undersigned are deeply distressed at the recent decision by the Prime Minister (in a letter dated 31st December 2010) to delink MGNREGA wages from the Minimum Wages Act even while indexing the wage rate under NREGA to Consumer Price Index for Agricultural Labour. The Government of India had already undermined the wages under NREGA through a January 2009 notification, when it imposed an unjust freeze at an arbitrary rate of Rs 100 per day on its wages. The Government of India’s use of Section 6(1) to delink NREGA wages from the Minimum Wage Act is not just bad in law but is also immoral in so far as it seeks to remove the basis of Constitutional and legal protection of the lowest end of workers in the wage hierarchy. With a consistent near double digit inflation rate, touching 9.7% and even higher food price inflation the frozen NREGA wage, over the last 24 months has been significantly eroded in real terms. In fact even after the recent indexing of wages, the MGNREGS wage, in at least 11 states, is lower than the prevailing state minimum wage-- a situation that the Supreme Court of India has declared to be forced labour, prohibited under Article 23 of the Constitution.
As it is even State minimum wages have also been artificially depressed, without any rationale, and ignore the minimum need-based norms proposed in 1957 by the 15th Indian Labour Conference. These norms were not only endorsed by the Supreme Court but further enhanced by additional 20% in the Unichoy Vs State of Kerala in 1961 and 25% in the Reptakos Brett vs their workmen in 1991. If these norms are followed, given current rural prices, the minimum wage would be at least Rs. 250 per day. But the Government of India has not only blatantly disregarded these minimum wage setting norms, but is continuing to pay a meagre real wage of just Rs. 100 per day since January 2009 under NREGA.
There is overwhelming legal and political consensus on the need to pay minimum wage in MGNREGS works:
• The Andhra Pradesh High Court in WP No. 11848/2009 suspended the January 2009 notification on freezing the minimum wage for NREGA. The High Court stated that Government being the agency for implementing minimum wages cannot itself violate the minimum wages. In addition, governments of Tripura, Karnataka, Punjab, West Bengal, Madhya Pradesh and Himachal Pradesh had also requested an amendment of the January 2009 notification as their state minimum wages were above the notified wage rate. Both the Government of India and the state Government of Andhra Pradesh are facing contempt proceedings since.
• GoI’s own law officer, the Additional Solicitor General, Ms. Indira Jaising referring to the PUDR Vs Union of India case and Article 23 of the Constitution of India has said that payment of less than minimum wage in NREGA works will amount to forced labour. She also cited the Kamani Metals and Alloys vs their workmen case in which the Supreme Court observed that minimum wage must be paid ‘irrespective of the extent of profit, the financial condition of the establishment or the availability of workmen on lower wages.’
• Chief Ministers of the states of Rajasthan, Andhra Pradesh and Kerala have written to the Prime Minister requesting MoRD’s compliance with the Minimum Wage Act
• The Chairperson of UPA, Mrs Sonia Gandhi too has written to the Prime Minister calling his attention to find urgent resolution of this matter.
• The Labour Ministry has reiterated its “fundamental objection” to Section 6(1), warning that using 6(1) to allow payment of less than prevailing state minimum wage will not stand legal scrutiny.
• The National Advisory Council, headed by Mrs. Gandhi, also recommended that minimum wages be paid to NREGS workers.
• 15 eminent jurists and lawyers including M N Venkatachaliah and J S Verma (both former Chief Justice of India), V R Krishna Iyer, P B Sawant, K Ramaswamy, Santosh Hegde (all former judges of the Supreme Court), A P Shah (former Chief Justice of Delhi High Court) and Dr. Upendra Baxi, Dr. Mohan Gopal, Fali S Nariman, Prashant Bhushan, Brinda Grover and others have urged the Government of India to immediately revoke its unconstitutional notification and along with state governments ensure that minimum wages are paid to all workers in India.
The Ministry of Finance in its letters dated December 1 and December 6, 2010 has stated that the Government will index the Rs 100 with inflation using wages as of April 1, 2009 as base for notification on January 1, 2011. While indexing wages with inflation recognises the fall in real wages, it will not resolve the core issue.
The Prime Minister has asked the rural development ministry to develop an index for fixing and revising wages under rural job scheme NREGA. Till the new index is worked out, wages under the scheme will be tied to inflation as measured by the consumer price index for agricultural labourers. The order will be effective from January 1, 2011. A committee under the chairmanship of Pronab Sen has been formed to devise an NREGA wage index. This is in itself worrisome as it will create yet another category of categorising workers and thereby institutionalizing the discrimination.
The government’s refusal to pay even minimum wage on public works at a time when food prices keep shooting up lays bare the Prime Minister’s promise that “no citizen of our country must sleep hungry”. Moreover it is shocking that a government battling trust deficit as scam after scam privileging powerful corporations become public, will let (comparatively minor) fiscal considerations override a constitutional and humanitarian mandate.
We demand the Government of India:
1. Immediately implements Section 6(2) of the NREGA indexed to inflation in all states thereby upholding the fundamental right to live of its poorest workers.
2. Immediately declares a national floor level need based wage based on the 15th ILC norms and subsequent Supreme Court judgements on minimum wage fixation, below which no state minimum wage can go.
1. Aruna Roy, Nikhil Dey and Shankar Singh (Mazdoor Kisan Shakti Sangathan)
Ruchi Gupta 9910206490
For further information, please see the links below:
Rural job scheme minimum wage revised, risking inflation spiral by Ruhi Tewari & Asit Ranjan Mishra, Livemint, 7 January, 2011, http://www.livemint.com/2011/01/07001315/Rural-job-scheme-
World Bank sees NREGA as a barrier to economic development, The Economic Times, 15 March, 2009, http://economictimes.indiatimes.com/news/economy/policy/wo
Minimum Wages under MGNREGA demanded, SamayLive, 19 January, 2011, http://english.samaylive.com/nation-news/676481042/mgnrega
NREGA is flawed: Rawat by Sreelatha Menon, The Business Standard, 19 January, 2011, http://www.business-standard.com/india/news/nrega-is-flawe
Abhijeet Sen, Member, Planning Commission interviewed by Rupashree Nanda, http://www.im4change.org/interviews/abhijeet-sen-member-pl
Increasing cases of irregularities in MGNREGS, The Hindu, 7 December, 2010, http://pib.nic.in/release/release.asp?relid=68186
States must pay minimum wages to workers under nrega: Pronab Sen by Sreelatha Menon, The Business Standard, 7 December, 2010, http://www.business-standard.com/india/news/states-must-pa
Will Unique Identity Number derail nrega? by Alok Pandey and Tanima Biswas, NDTV, 2 December, 2010, http://www.ndtv.com/article/india/will-unique-identity-num
Rajasthan govt to impose penalty for delaying MGNREGA payment, The Hindustan Times, 30 November, 2010, http://www.hindustantimes.com/Raj-govt-to-impose-penalty-f
‘Keep UID out of MGNREGA', The Hindu, 1 December, 2010, http://www.thehindu.com/todays-paper/tp-opinion/article924451.ece
The biggest NREGA scam in Rajasthan
Social audit of NREGS in Araria reveals corruption
Poor people unite against corrupt sarpanches
Is NREGA II a product of a complacent UPA II?
Centre to step in Rajasthan Mnregs wage row by K Balchand, The Hindu, 10 October, 2010, http://www.hindu.com/2010/10/10/stories/2010101063261100.htm
Mazdoor Satyagrah demands accountability panel, The Times of India, 9 October, 2010, http://timesofindia.indiatimes.com/city/jaipur/Mazdoor-Sat
Activists to send low wage feat' to Guinness, The Times of India, 7 October, 2010, http://timesofindia.indiatimes.com/city/jaipur/Activists-t
NREGS: Activists demand action on anomalies, The Times of India, 6 October, 2010, http://epaper.timesofindia.com/Default/Scripting/ArticleWi
Less than min wages for NREGA workers unconstitutional: Govt by Anindo Dey, The Times of India, 5 October, 2010,
Ensure minimum wages to NREGA workers: Activists by Anindo Dey, The Times of India, 4 October, 2010, http://timesofindia.indiatimes.com/city/jaipur/Ensure-mini
No guarantees anymore by Sowmya Sivakumar, The Hindu, 3 October, 2010,
Labourers go on indefinite strike, press for demands, The Times of India, 3 October, 2010,
The mass job guarantee by Aruna Roy & Nachiket Udupa, Himal Magazine, October, 2010,
Cong, activists at loggerheads over NREGA by Sreelatha Menon, The Business Standard, 23 September, 2010, http://www.business-standard.com/india/news/cong-activists
'Systemic reform to root out corruption still needed' by Bharat Dogra, The Times of India, 13 September, 2010, http://timesofindia.indiatimes.com/home/opinion/edit-page/
NAC members blast execution of NREGA, call it 'anti-labour', The Financial Express, 28 September, 2010,
MNREGA workers peeved at being paid Re. 1 by K Balchand, The Hindu, 28 September, 2010, http://www.hindu.com/2010/09/28/stories/2010092862850800.htm
States fail on dole for jobless-Unemployment allowance to handful, The Telegraph, 28 September, 2010,
Rajasthan refuses to recognise NREGA workers' union by Sreelatha Menon, Sify News, 30 September, 2010, http://sify.com/finance/rajasthan-refuses-to-recognise-nre
Let’s build on the positives, The Hindustan Times, 29 September, 2010,
Fear of Freedom by Ruchi Gupta, Hard News, 11 January, 2011, http://www.hardnewsmedia.com/2011/01/3799
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