Disagreements within the government seem to have stalled any attempts at ensuring that the UPA regime’s flagship rural job guarantee scheme pays minimum wages in all States.

While the Rural Development Ministry has made a deal with the activists who took the government to court over the matter, strong opposition from the Finance Ministry has reportedly stalled any move to amend the law.

The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 originally stipulated that minimum wages would be paid under the scheme.

However, in 2009, when some State governments started jacking up their minimum wage rates forcing the Union government (which funds MGNREGS) to shell out more, the Centre used its powers under Section 6 (1) allowing it to ignore the Minimum Wages Act.

Civil society petitioners challenged that move in several High Courts. Following an adverse judgment in the Karnataka High Court, the Centre appealed to the Supreme Court.

While the matter is sub judice, the government has been trying to negotiate an out-of-court settlement with the petitioners, keeping in mind its concern that States cannot be allowed to extract higher sums from the Centre by arbitrarily increasing their minimum wage rates whenever they please.

In a letter to the Prime Minister in October 2012, Rural Development Minister Jairam Ramesh explained the rationale for this move: “I feel, and I am sure you will agree with me, that it is better for the Government to be doing something this important on its own, rather than be faced with a situation of having to do it on the directives of the Supreme Court.”