Expressing serious concern over the disparity in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) wages and the minimum wages paid by his State’s government, Bihar Chief Minister Nitish Kumar has sought the intervention of Prime Minister Manmohan Singh to set right the situation and also reimburse the financial burden of Rs. 500 crore that the State government would have to incur as a result of this discrepancy.

In a letter to the Prime Minister, Mr. Kumar urged him to issue an advisory to the Ministry of Rural Development to “take appropriate measures for ensuring MGNREGA wages as per the wage rate notified by the State government under Section 3 of the Minimum Wages Act, 1948 and allocate resources to meet the total expenditure on wages.”

“This amendment 6 (1) will once and for all resolve the issue of the discrepancy between MGNREGA wage rate and the minimum wage under the Minimum Wages Act, 1948,” said Minister for Rural Development Jairam Ramesh in response to the Bihar Chief Minister.

Drawing the attention of the Prime Minister to the issue of rates of wages under MGNREGA and those paid by the State government, Mr. Kumar said the Central government, “has notified wage rate, under Section 6 of the MGNREGA, 2005 which is significantly lower than the minimum notified by State Government under Section 3 of the Minimum Wage Act, 1948. The current wage rate notified by Government of India is Rs. 138 per day while the wage rate notified by the State under Section 3 of the Minimum Wages Act for agriculture labourers is Rs. 162 per day.”

“You may kindly appreciate that no State can undermine its own statute. Keeping this aspect and also the welfare of workers in view, the State Government has decided to pay wages as per wage rate notified by the State under Section 3 of the Minimum Wages Act, 1948,” the letter stated.

Mr. Ramesh added that a final decision was awaited. However, he pointed out that “it is not just Bihar but also other States including Andhra Pradesh, Jharkhand, Kerala, Madhya Pradesh, Mizoram, West Bengal and Arunachal Pradesh that are in the same boat.”

Elaborating further, Mr. Kumar asserted: “This decision has resulted in an extra liability of about Rs. 500 crore per year on state resources…You may be aware that as per Section 22 of MGNREGA, the Union Government has to meet the entire expenditure towards payment of wages. Notification of lower wage rates by Union Government, than the wage rates notified by the State, is diluting the spirit of the Act.”