Ahead of Assembly polls, Centre keenly watching Mayawati's move

Fixing of minimum wages in the States and under the Mahatma Gandhi National Rural Employment Guarantee Scheme is set to become a poll issue, at least in Uttar Pradesh.

Even as the Ministry of Rural Development is hurrying to revise the wage rate under the MGNREGS next week, its officials are apprehensive that Uttar Pradesh too might revise its minimum farm wages in a couple of days.

Impending tug

The officials are keenly watching the Mayawati government's move, apprehending an impending tug of war, particularly because it raised the minimum wages more than half a dozen times in recent months.

The Ministry's officials are busy computing the new MGNREGS wage to be notified effective from January 2012.

Wage rate

The wage rate was linked with the Consumer Price Index for Agricultural Labour this year on the directive of Prime Minister Manmohan Singh, who, however, declined National Advisory Council chairperson Sonia Gandhi's request to link it with the Minimum Wages Act (MWA).

Problem arose for the Ministry with the Andhra Pradesh and Karnataka High Courts ordering payment of minimum wages to MGNREGS workers.

Union Rural Development Minister Jairam Ramesh did not regard challenging the Karnataka High Court order as the best option and suggested amendments to the MWA and the MGNREGA to pave the way for payment of minimum wages with safeguards to protect the Union government from being put at a disadvantage by the States by frequently raising the wages.

But that suggestion was opposed, according to sources, by the Finance Minister.

Heavy burden

For, it would entail a heavy burden on the exchequer. Accepting his suggestion, the Prime Minister wrote to Mr. Ramesh, asking him to file a special leave petition in the Supreme Court challenging the Karnataka High Court order stressing the serious questions of law involved therein as the MGNREGA allows the government to fix the wage rate.

SLP route

At the same time, Dr. Singh asked Mr. Ramesh to explore the options he had suggested for implementing minimum wages by amending the two laws which would in any case take time. Hence, the Ministry has decided to pursue the SLP route as well.

One of the reasons why the issue got complicated was that earlier only in six States MGNREGS wages were less than the minimum wages but during the past few months several States have revised it one after the other. As a result, the minimum wages now are more than what is paid under the MGNREGS in 14 States. And officials said Uttar Pradesh was likely to follow suit in a couple of days.

The assessment is the Union government will have to bear an additional outgo of Rs. 4,000 crore if minimum wages were to be implemented against the earlier calculation of a burden of Rs. 900 crore.