Tuesday, February 1, 2011

Report: Rational Minimum Wage Policy (for the Unorganized Sector)



Backgrounder

As per the Constitution (Article 43), “The State shall endeavour to secure, by suitable legislation or economic organization or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life […..]”

The Minimum Wage Act, 1948 (Section 12.1) states “Where in respect of any scheduled employment a notification under Section 5 is in force the employer shall pay to every employee engaged in a scheduled employment under him wages at a rate not less than the minimum rate of wages fixed by such notification for that class of employees in that employment without in deductions […..]”

As per Section 4(1), the minimum rates of wages fixed or revised by the appropriate authority (Central or State Government) for the scheduled employments shall take into account the following:

1. a basic rate of wages and a special allowance at a rate to be adjusted at intervals with the variation in the cost of living index number applicable to such workers; or,
2. a basic rate of wages with or without the cost of living allowance, and the cash value of the concessions in respect of supplies of essential commodities at concessional rates, where so authorized; or
3. an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any.

The 15th Indian Labour Conference (1957) defined the following norms to calculate minimum wage:

1. 3 consumption units for one earner.
2. Minimum food requirements of 2700 K calories per average Indian adult.
3. Clothing requirements of 72 yards per annum per family.
4. Rent corresponding to the minimum area provided for under Government’s Industrial Housing Scheme.
5. Fuel, lighting and other miscellaneous items of expenditure to constitute 20% of the total minimum wages.

These norms were further enhanced by the Supreme Court in its judgment in the case of Reptakos Brett and Co. versus its workmen (1991) by an additional 25% of the total minimum wage for education, medical requirement, minimum recreation including festivals/ ceremonies and provision for old age, marriage etc.

Fixing a minimum wage below the norms prescribed by the 15th ILC is not an oversight but a calculated exercise. The Second national Commission on Labour Report notes, “Wage Boards after the Second Pay Commission (1957-59) have not found it possible to fix the need-based minimum wages recommended by the Indian Labour Conference (1957). The Report of the Committee, set up by the first National Commission on Labour, on the Functioning of the System of Wage Boards (cited in the Report of NCL, 1969) found it infeasible because the need-based minimum would be beyond the capacity of the industry to pay and might result in the transference of the burden to the consumer”. Subsequently, the Sub-committee ‘D’ of the Standing Committee of Labour Ministers (1981) diluted the norms prescribed in the 15th ILC recommending, “the level of minimum wage should not be below the poverty line”, and further diluted by the Report of the Committee of Secretaries’ of States (1981), which reduced per day calorie requirements to 2400 K calories in rural areas and 2100 K calories in urban areas.

However, even these statutory wages are not being paid. As per simulation from household data in the ILO report, “Extending the Coverage of Minimum Wages in India”, at least 73 million workers (out of 173 million waged workers) received wages below the national minimum wage floor of Rs. 66 per day in 2004-05. This includes more than half of all casual workers (58.6 million earners) and another one-fourth of all salaried workers (or 14.5 million workers). Unsurprisingly, female workers and those residing in rural areas are more likely to earn below minimum wages.

In January 2009, the Government of India issued a notification under Section 6(1) of the MGNREGA, which delinked MGNREGA wages from the Minimum Wage Act freezing MGNREGA wages at the prevailing state minimum wage or upto Rs. 100 per day. Today, MGNREGA wages in at least 19 states are less than the prevailing state minimum wage, thus hitting the worker not just in real economic terms, but de facto capping market wages to below minimum wage.The Minimum Wages Act does not mandate inflation indexation. Indexation was recommended only in Labour Ministers’ Conference (1988) and the variable dearness allowance (VDA) linked to CPI. Only 26 states/ UTs incorporate VDA as a component of minimum wage.


The Seminar

After the holding of 47 days long dharna (following Mazdoor Haq Yatra) by various organizations like National Campaign for People’s Right to Information (NCPRI), SR Abhiyan and Mazdoor Kisan Shakti Sangathan (MKSS) at the Statue Circle in Jaipur (Rajasthan) since 2 October, 2010, a letter was shot from Sonia Gandhi on 11 November, 2010 to the Prime Minister of India asking for raising the minimum wages under NREGA. (Please check the links:
http://www.im4change.org/news-alert/media-invited-to-witness-the-real-dance-of-democracy-3622.html

http://www.im4change.org/news-alert/nrega-2010-politics-in-slow-motion-4763.html

http://www.im4change.org/news-alert/what-is-wrong-with-mg-nrega-4237.html)

Although the Government of India agreed to indexing the wages paid under NREGA to the Consumer Price Index for Agricultural Labourer (CPIAL), it shied away from paying statutory minimum wages under NREGA in various states of India. The reason behind this argument was: Who will bear the financial burden of paying the minimum wages—the Centre or the states? A letter from the Prime Minister of India to the UPA Chairperson Sonia Gandhi (who is also the Chairperson of National Advisory Council) dated 31 December, 2010 communicated that Government does not see the need to pay statutory minimum wages to MGNREGA workers.

In was in this context that a very relevant seminar titled Rational Minimum Wage Policy (for the Unorganized Sector) was held at Nehru Memorial Museum and Library (NMML) on 18-19 January, 2011 by Bandhua Mukti Morcha, NMML and Planning Commission so as to further the movement for ensuring payment of statutory minimum wages in the unorganized sector and also to the manual labourers employed under NREGA. The main message of the two day-long seminar was that payment of wages below the statutory minimum wages was tantamount to bonded labour system, where the labourer is forced to work in subhuman conditions. This was the point made by Swami Agnivesh (from Bandhua Mukti Morcha) during the seminar. He argued that the existing minimum wage policy of the Government is irrational. Hence, this seminar has been organized to demand for rational minimum wages. The 6th Pay Commission has raised the salaries of the 4th grade 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 about the Sanjit Roy versus State of Rajasthan case that was held in 1983 (see the link:
http://www.barefootcollege.org/Sanjit%20Roy%20vs%20State%20of%20Rajasthan.pdf) in which the apex court ruled in favour of Sanjit Roy and the women in a public work received full wages that was due to them.

Swami Agnivesh informed that during the 1960s he was teaching business management at St. Xavier’s college in Kolkata and he studied law too. During the days of Naxalism, he saw leaders calling for revolution via the use of guns. He left his career and came to Haryana. He started with Vedic socialism ideology. Then he read Gandhi and came to know that Gandhi was talking about the poorest of the poor (Gandhiji’s talisman). He resigned from the post of Education Minister in Haryana and started working for the bonded labourers. He opined that Directive Principles of State Policy and the Constitution prepared by Ambedkar can empower the poor and the dalits. If the Constitution is implemented properly, there will be no Maoism in the country.

Naurti Ben who was one of women demanding for minimum wages in the Sanjit Roy versus State of Rajasthan case was also present during the above-mentioned seminar. She said that getting less than minimum wages tantamount to bonded/ forced labour.

Justice AP Shah (Retired Chief Justice of High Court of Delhi) mentioned that the Constitution of India has two parts: a. Fundamental Rights and b. Directive Principles of State Policy. Part IV of the Indian Constitution talks about hopes and aspirations of the poor. He noted that if minimum wages are 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) expressed that it is upto to the courts to decide whether minimum wages should be paid. He, however, agreed that wage rates in the rural areas got upward push thanks to the NREGA. Constitutional rights must be enjoyed by the citizens.

Aruna Roy (MKSS, Rajasthan) demanded for payment of minimum wages under NREGA. Indexing will be helpful when statutory minimum wages are paid. Indira Jaising too has demanded for payment of minimum wages, she informed. Rs. 1270 crore would be the extra cost for paying minimum wages in 11 states. She alleged that the Ministry of Rural Development was unable to ensure minimum wages to the NREGA workers. Minimum Wage Act is essential to end bonded labour system. The market on its own can’t help the workers unlike the Government. Long before the Minimum Wages Act came into being, Jawaharlal Nehru talked about minimum wages.

Comrade D Raja from the Communist Party of India (CPI) informed that the Left in the UPA 1 wanted that NREGA should provide 180 days of work. 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. NREGA has actually led to making right to work as a fundamental right. Since the Parliament has legislated the NREGA, hence the Government must pay minimum wages under it. Neither the judiciary nor the Government can violate the minimum wage payment under NREGA.

Harsh Mander pointed out that the current discourse on rise in the rural wages due to NREGA, leading to conflict between farmers’ interest and workers’ interest, is a wrong notion. He objected to the notion of exploitation of labourers by farmers.

Prof. Jayati Ghosh (Jawaharlal Nehru University) 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 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 minimal royalties to the Exchequer. Tax havens like Mauritius are helping the corporate to increase investment by avoiding taxes. Land acquisition is taking place by displacing the farmers for example the case of Taj Express. The corporate mafia is getting powerful by each day. The Government is only concerned about economic growth. The NAC has recommended for universal right to food, which the Government is refusing to accept.

Comrade Sitaram Yechury from the Communist Party of India (Marxist) informed 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. In the backdrop of 1.76 lakh crore 2G scam and spurious spending made during Commonwealth Games 2010, the logic of the Government that it has got no money is unacceptable. It was Montek Singh Ahluwalia who said that Rs. 88,000 crore is needed to enact the Right to Food Act, Yechury alleged. There are two Bharats: IPL Bharat and BPL Bharat and the laws enacted during the period of economic liberalization actually looted the people. The nationalization of banks in 1969 made by the Indira Gandhi led Government under the pressure of Left parties has helped India to avoid the financial crisis of 2008, Yechury argued. If the UPA 2 listens to the Left, the Congress will gain.

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 (retired 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. Mukesh Ambani earns Rs. 1,000 per second. India made progress without foreign capital after Independence. Capital derives from labour exploitation. Farmers are not unskilled. 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 about 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. Critical analysis is needed to find whether there is any contradiction between MG-NREGA Section 1 and the Minimum Wage Act.

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 about his forthcoming book where he has asked how to manage so as to reach much needed equality. 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. So there is need for cash transfers to the poor. Unemployed persons need money in terms of direct transfers. There is need for a feasibility study for bringing policy changes.

Nikhil Dey, activist from MKSS, criticized Kaushik Basu for his suggestion of cash transfers instead of minimum wages. He informed that 99 labourers from Tonk district received Rs. 11/- each for 11 days of hard labour under NREGA i.e. they were paid at the rate of Re. 1/- per day. Their hard labour was not paid justly.

Subhash Bhatnagar informed that the minimum wage for construction worker is Rs. 205 per day but in reality they receive 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.

Senior journalist Ramsharan Joshi asked why the government is cutting back on subsidies. He said that profit led growth must be replaced by wage led growth. Life with dignity must be the motto.

Pankaj Pushkar, research scholar on education, asked that there should not be any dichotomy between skilled and unskilled labour as it would undermine creativity of human beings.

Prof. Sheotaj Singh informed that 92 percent of the labour force is employed in the unorganized sector. The principle employer should pay the minimum wages, in case the contractors are not paying the same. Migration of labour is happening from West Bengal, Odisha and eastern UP to Punjab and Haryana.

Ashok Khandelwal, ex-faculty VV Giri National Labour Institute told that there is need for changes in the Minimum Wage Act regarding the principles of wage fixation. Revision of minimum wages is not mandatory. The Government may revise minimum wages in every five years. This period can be reduced to 3 years. There are certain sectors (types of employment), which are exempted from minimum wages. Minimum wage should be applicable to all the sectors including domestic worker. 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. He asked for referring to the NCEUS documents regarding minimum wages. He said that the Ministry of Labour is responsible for the Contract Labour (Regulation and Abolition) Act and Minimum Wages Act.

Dr. Chandan Srivastava from Inclusive Media for Change, CSDS said that if farmers are self-employed and they are committing suicides due to debt, then they must be provided minimum wages. He criticized Kaushik Basu for his remark that if minimum wages rise, then unemployment will increase. He questioned Montek S Ahluwalia’s suggestion that the case of minimum wage must be resolved in the courts. He said that living wage is a better concept than minimum wage after listening to Prof. Gopal Mohan.

Retired Chief Justice of the Supreme Court JS Verma informed 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. 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 moto 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 the 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. He informed that in the earlier days the State was true to the Directive Principles of State Policy, which is not the case today. The State is nothing but a set of values. These values are derived from the Indian freedom movement. There are 5 values: Satya (Honesty), Ahimsa (Non-violence), Swaraj (Sovereignty), Antyodaya (working for the poor) and Sarvodaya (Progress of all). Antyodaya is the basic tenet of the Constitution. One has to look at the Indian freedom struggle and not the market where exchanges take place. Market driven forces cannot determine values. State upholds the values that constitute the Republic. There are a number of provisions in the Constitution: Living wage, Equal remuneration and Collective bargaining power. 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. In 1948, the definition of living wage was formed. 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 mentioned about the Sanjit Roy versus State of Rajasthan case. Prison labour in China is also forced labour. It is done to reduce the cost of development in China. 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
http://www.livemint.com/2011/01/07001315/Rural-job-scheme-minimum-wage.html). Some media houses are telling that NREGA will lead to the biggest trade union in the world. The multiplier effect can be observed thanks to the hike in minimum wages.

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.

KB Saxena (IAS) agreed that people are getting wages far below the minimum wages. As a result, migration is rising. Economic reforms have affected laws pertaining to bonded labour and migrant labour. Class polarization is happening between elite/ middle level workers and contract labourers. If Montek S Ahluwalia has asked Court’s intervention for payment of minimum wages, it means that the courts are in favour of the Government.

Sushila Ben, a grassroot level worker commented that even after 30 years, we are still demanding for minimum wages, by referring to the Sanjit Roy versus State of Rajasthan case. If minimum wages are not being paid, then siphoning off of fund is taking place. The Government is not taking any action against corrupt babus and politicians. She asked why the Government is reluctant in unionization of NREGA workers. The Government is afraid of the labourers. Unions can be formed in the organized sector and not in the unorganized sector.

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:
World Bank sees NREGA as a barrier to economic development, The Economic Times, 15 March, 2009,
http://economictimes.indiatimes.com/news/economy/policy/world-bank-sees-nrega-as-a-barrier-to-economic-development/articleshow/4266622.cms

http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTWDRS/EXTWDR2009/0,,menuPK:4231145~pagePK:64167702~piPK:64167676~theSitePK:4231059,00.html). It is not just about indexation of wages to CPIAL, it is also about ensuring social justice. There has been a deliberate effort to divide labour into organized and unorganized. Unorganized workers are insecured and unprotected. Terms like formal-informal, organized-unorganized should be discarded, said Patkar. Natural capital does not get quantified before it falls into the hands of capitalist. Land acquisition is quite rampant now. Value of labour has been undermined in today’s world. Corporate-contractors-builders nexus want to exploit the agricultural labourers. Right to access natural resources is yet to be materialized for the poor and the tribal. Local situation should be taken into account while implementing schemes in forest and tribal areas. Think about the profit made by the Ambanis, when they pay so much in royalities, asked Patkar. Wage disparity has increased presently. In the case of Export Processing Zones (EPZs) and Special Economic Zones (SEZs), tax sops are given by the Government to the corporates. Small and marginal farmers have benefitted from NREGA. Productivity of crop fields can be improved via NREGA. The empowered Group of Ministers (eGoM) is wary of National Advisory Council (NAC). People’s pay commission is quite useful. Government’s Labour Commissioner Office is useless in giving information on migration. Inter-state Migrant Workmen Act, 1979 has not been implemented properly.

Finally, the following resolutions were passed unanimously:

1. We decry the incarceration of human rights activist Binayak Sen on charges of sedition, and demand that he be released immediately. Further there is no place for sedition laws in a democratic country, and such laws must be repealed

2. Government must recognize the right of people to organize and such organizations must be legally competent to dialog and negotiate with the government

3. Minimum wage is a constitutional and non-negotiable fundamental right, and must be respected at all times.

4. There must be a rational basis for determining minimum wage. Minimum wage must be decided through a tripartite board, which must include worker representatives

5. In a democracy, there must be a consultative process to determine and change policy. The GoI decision to violate minimum wages runs counter to overwhelming political and legal consensus, including three Chief Ministers, 15 legal luminaries (including 3 ex-CJIs), grassroots opinion and even the Chairperson, NAC

6. Cash transfers are not a substitute for a rational and just minimum wage. In fact cash transfers are anti-democratic in that it is an attempt to substitute a inviolable right to work with a government dole.

7. The Minimum Wage Act as it stands is ultra vires of the Constitution in that it has reduced the Constitutional standard of a living wage to that of a minimum wage. The Act must be amended to delete the Exemption Clause (Section 26), the principles to determine minimum wage must be defined to ensure a legal basis for calculation, indexation and revision of wages must be made mandatory, and time period for revision must be reduced from five years to one year.

8. Every individual, including children in the family should be counted as a whole unit. The average size of the Indian family is five members and this must be the basis of minimum wage calculation.

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The following statement was passed during the seminar regarding payment of statutory minimum wages which was signed by eminent personalities 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)
2. Biraj Patnaik (Principal Adviser, Supreme Court Commissioners)
3. Kavita Srivastava (People’s Union for Civil Liberties)
4. Arundhati Dhuru (National Alliance of People’s Movements)
5. Medha Patkar, Narmada Bachao Andolan
6. Anuradha Talwar (Paschim Banga Khet Majoor Samity)
7. Dunu Roy (Hazards Centre)
8. Gautam Mody (New Trade Union Initiative)
9. Roma (National Forum of Forest People and Forest Workers)
10. Sandeep Pandey (Asha Pariwar)
11. Pradeep Baisakh (Journalist)
12. Yogendra Yadav (Senior Fellow, Centre for the Study of Developing Societies)
13. Annie Raja (National Federation of Indian Women)
14. Mythri Prasad- Aleyamma (Centre for Development Studies)
15. Sunil Kaul (The Ant)
16. Kamal Chenoy (Professor, Jawaharlal Nehru University)
17. Anuradha Chenoy (Professor, Jawaharlal Nehru University)
18. Ambarish Rai (Lok Sangharsh Morcha)
19. Dr. Rukmini Rao (Gramya Resource Centre for Women, Secunderabad)
20. Anurag Modi and Shamim Modi (Samajwadi Jan Parsihad, Jan Sangharsh Morcha and Shramik Adivasi Sanghthan)
21. Sachin Kumar Jain (Vikas Samwad)
22. Dr. Yogesh Kumar (Samarthan, Bhopal)
23. Kaveri Gill (Independent Development Economist and Researcher)
24. Madhuri (Jagrit Adivasi Dalit Sangathan)
25. Noor Zaheer (Writer and Social Activist)
26. Ashish Ranjan and Kamayani Swami (Jan Jagran Shakti Sangathan, Bihar)
27. Dipa Sinha (Reseach Scholar, Jawaharlal Nehru University)
28. Nandlal Prasad (Lok Samiti, Varanasi)Ajay Patel (Mazdoor Manch/AASRA)
29. Ankita Aggarwal (Right to Food Campaign Secretariat)
30. Jawahar Mehta (Jharkhand Gramin Mazdoor Sangh)
31. Abhay Kumar (Grameen Coolie Karmikara Sangathane)
32. Richa Singh (Sangtin Kisan Majdoor Sangthan Sitapur)
33. Reetika Khera (Visitor, Centre for Development Economics)
34. Karuna Muthiah (Right to Food Campaign, Tamil Nadu)
35. K.B.Singh (Social Worker, Madhya Pradesh)
36. Arun Tyagi (Jan Pahal, Madhya Pradesh)
37. Ishtiyaque Ahmad (Amam Trust)
38. Rupesh (Lok Parishad, Bihar)
39. Prof Om P Damani (IIT Bombay)
40. Anirban Kar (Economics Department, Delhi School of Economics, Delhi University)
41. Sowmya Kidambi (Director, SSAAT, Government of Andhra Pradesh)
42. Kundan Kumar (Senior Project Manager, Igate Global Solutions)
43. Guru (AID Bangalore)
44. Anindita (NREGA Researcher)
45. Anand Sivaraman (Entrepreneur)
46. Nandini Nayak (School of Oriental and African Studies (SOAS), University of London)
47. Mohan Bhagat (Professor, Department of Physics, University of Maryland, College Park)
48. Arshad Ajmal (Sahulat Microfinance Society)
49. Jayant Thakur (Lawyer)
50. Arudra Burra (Postdoctoral Fellow, School of Law, University of California at Los Angeles
51. Sharukh Alam (The Patna Collective)
52. Vikalp Mishra (University of Alabama, Huntsville)
53. Anuj Grover (AID Delhi)
54. Anjani Kumar
55. R. Selva Ganapathy (AID Delhi)
56. Pritish Bose (Shramajibee Samanvay Committee, West Bengal)
57. Dr. Shakeel Rahman (CHARM, Patna)
58. Ranjan (Nidan, Bihar)
59. Albert Joseph, Executive Director, FVTRS
60. L.S Ghonoidoss, Sucwlworn, West Bengal
61. Fr. Anthony Karik, President, FVTRS, West Bengal
62. Pradeep Mahapatra, Udyama, Orissa
63. PAHAD
64. Dillip Verma Bal, SRUJAN, Orissa
65. Fr. Corlls Gonsalves, Don Bosco, Maharastra
66. Levkish Viaka, Amar Shaheed Chitra Sangathan, Uttar Pradesh
67. K. Mahasa Sundra, Pondicherry
68. Nandkumar Dhande, Priyadasshum, Maharastra
69. Darade Sunil, Maharashtra Jantik Shishan Ahmadnagar
70. P Kampe, Byancun Sena
71. Dragpal Singh, HVSS
72. Anna John, SRWD, West Bengal
73. Khairuinsa N Shan, KDDC, Karnataka
74. R Y Swamy Naik, HELP Hirigur, Karnataka
75. Sr. Cecil, Christ Raja Ashram, Rajasthan
76. Angumahato, Lokhit Sen, Jharkhand
77. Sachi Kumari, CSS , Jharkhand
78. H F Akki, NEEDS
79. M H Angakri, Sarvodya, Karnataka
80. D G Chibbori, I W S Karnataka
81. G Chabradhururao, Y C D Andhra Pradesh
82. Karamat Ali Khan, NIPDIT, Orissa
83. Sr. Annie Davis, Uttar Pradesh
84. Henry Sach, St. Joseph’s Convent College, Jharkand
85. A. Isac Singh, SWAN, Tamil Nadu
86. Sr. Ann Maria, Kristi Jyoti
87. Mohinuddin Shah, West Bengal
88. Fr. Sir P Job, ADCI S W Society, Kerela
89. Hardkishore Prasad, Rajasthan
90. Sohrab, GRASS
91. Sukhbal Singh, GRASS
92. Fr. Sukumar, KECYKS (West Bengal)
93. Ancul, GRASS
94. Gouulananda Ojha India Development Project, Orissa
95. Nasim Ansari, Tarun Cletra, Uttar Pradesh
96. Sr. Mabul Pinto, Karnataka
97. Anpama, Jharkand
98. Sr. Sadhana, Uttar Pradesh
99. Hari Shankar Rant, Kandhamal, Orissa
100. Suraj Singh, Uttar Pradesh
101. Fr. K. D Joseph, KDSSS, Andhra Pradesh
102. Arun Kumawat, Rajasthan
103. Udaiveer VishwaKumar, Sahas Sewa Sansthan, Uttar Pradesh
104. Senastian K, Jeevana, Kerela
105. Fr. Regimon Cyriac, SVS, Jharkhand
106. C. P Nicholas, FVTRS, Bangalore
107. Dr. P . Basak, FVTRS, Karnataka
108. B.K Panda, FVTRS, Karnataka
109. H.R Sunny, FVTRS, Uttar Pradesh
110. Prem Kumar Sinha, The Vigil, Bihar
111. S. Paranjhotay, CNI-SS, Nagpur
112. S Nageshwar, FVTRS
113. Subodh Kumar Pandey, AGYVS, Bihar
114. Fr. Veeresh, SMSSS, Karnataka
115. Francis Anthony, Institute of Social Research and Development, Madhya Pradesh
116. Shinoj PC, COD, Calicut
117. Sasikumar PB, Shvoyas, Kerela
118. Rosara Mohanti, Kalahandi Orissa
119. Pramila Patna, Kalahandi Orissa
120. Amrendra Kumar, SVWST, Jharkhand
121. Akokla Insorg, FVTRS
122. Prashanth, FVTRS, Bangalore
123. Arpana Bharti, FVTRS, Bangalore
124. Ankur Kachhwana, FVTRS, Jodhpur
125. Raju Teron, FVTRS
126. K Vijaya, VMMIL, Tamil Nadu
127. Sr. Sumitha, Krupalaya, Tamil Nadu
128. Biswaji Padhi, SRUSTI, Orissa
129. S Charides, WEEDS, Tamil Nadu
130. Rishi Riddhi Anhata, Shamayiti, West Bengal
131. Prajnamita, Shamayiti, West Bengal
132. Akhilesh Mishra, FVTRS, Rajasthan
133. L Pankajakshan, Santhigram, Kerela
134. A Isac Sinwalt, SWAN, Kanyakumari
135. Ram Shram Verma, LJSS, Uttar Pradesh
136. Pramod Kumar, Samchit Vikas Sansthan Basti, Uttar Pradesh
137. Raghuveer Acharta, FVTRS, Andhra Pradesh
138. Diviana Nayagi G, FVTRS, Karnataka
139. Usha R, FVTRS, Karnataka
140. Pawan k, Gurgaon
141. Trilochan Shastry, Dean, IIMB
142. Prof. Jean Dreze, Allahabad University
143. ICAN
144. Gabriele, D.
145. Madhulika Swami, Delhi
146. Nalini Nayak, Reader, PGDAV College, University of Delhi
147. Prof Pulin B. Nayak, Delhi School of Economics, University of Delhi
148. Ashutosh Swami, General Manager (Retd)Indian Railways
149. Dr. Urvi, Medical Professional, USA
150. Gautam Desai, USA
151. Dr. Rahul Thakur, Medical Professional, USA

Contact Persons:

Ruchi Gupta 9910206490
Shreya Bhattacharya 9811108328
Kamayani Swami 09771950248


For further information, please check the links below:

http://www.im4change.org/news-alert/media-invited-to-witness-the-real-dance-of-democracy-3622.html

http://www.im4change.org/news-alert/nrega-2010-politics-in-slow-motion-4763.html

http://www.im4change.org/news-alert/what-is-wrong-with-mg-nrega-4237.html

Minimum Wages Act, 1948, http://labour.nic.in/annrep/files2k1/lab5.pdf

http://www.barefootcollege.org/Sanjit%20Roy%20vs%20State%20of%20Rajasthan.pdf

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-minimum-wage.html

World Bank sees NREGA as a barrier to economic development, The Economic Times, 15 March, 2009,
http://economictimes.indiatimes.com/news/economy/policy/world-bank-sees-nrega-as-a-barrier-to-economic-development/articleshow/4266622.cms

http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTWDRS/EXTWDR2009/0,,menuPK:4231145~pagePK:64167702~piPK:64167676~theSitePK:4231059,00.html

Minimum Wages under MGNREGA demanded, SamayLive, 19 January, 2011,
http://english.samaylive.com/nation-news/676481042/mgnrega-minimum-wages-nmml-sitaram-yechury-montek-singh-ahluwali.html

NREGA is flawed: Rawat by Sreelatha Menon, The Business Standard, 19 January, 2011,
http://www.business-standard.com/india/news/nrega-is-flawed-rawat/422254/

Abhijeet Sen, Member, Planning Commission interviewed by Rupashree Nanda,
http://www.im4change.org/interviews/abhijeet-sen-member-planning-commission-interviewed-by-rupashree-nanda-4744.html

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-pay-minimum-wages-to-workers-under-nrega-pronab-sen/417394/

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-number-derail-nrega-70002

Rajasthan govt to impose penalty for delaying MGNREGA payment, The Hindustan Times, 30 November, 2010,
http://www.hindustantimes.com/Raj-govt-to-impose-penalty-for-delaying-MGNREGA-payment/Article1-632811.aspx

‘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
http://www.im4change.org/news-alert/the-biggest-mnrega-scam-in-rajasthan-1911.html

Social audit of NREGS in Araria reveals corruption
http://www.im4change.org/news-alert/social-audit-of-nregs-in-araria-reveals-corruption-870.html

Poor people unite against corrupt sarpanches
http://www.im4change.org/news-alert/poor-people-unite-against-corrupt-sarpanches-777.html

Is NREGA II a product of a complacent UPA II?
http://www.im4change.org/news-alert/debate-is-nregs-ii-a-product-of-a-complacent-upa-ii-114.html

www.srabhiyan.wordpress.com

http://www.scribd.com/doc/40990562/Annexure-4-Open-Letter-From-Eminent-Jurists-and-Lawyers

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-Satyagrah-demands-accountability-panel/articleshow/6716117.cms

Activists to send low wage feat' to Guinness, The Times of India, 7 October, 2010,
http://timesofindia.indiatimes.com/city/jaipur/Activists-to-send-low-wage-feat-to-Guinness/articleshow/6702689.cms

NREGS: Activists demand action on anomalies, The Times of India, 6 October, 2010,
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIJ/2010/10/06&PageLabel=2&EntityId=Ar00201&ViewMode

Less than min wages for NREGA workers unconstitutional: Govt by Anindo Dey, The Times of India, 5 October, 2010,
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIJ/2010/10/05&PageLabel=2&EntityId=Ar00200&ViewMode

Ensure minimum wages to NREGA workers: Activists by Anindo Dey, The Times of India, 4 October, 2010,
http://timesofindia.indiatimes.com/city/jaipur/Ensure-minimum-wages-to-NREGA-workers-Activists/articleshow/6680762.cms

No guarantees anymore by Sowmya Sivakumar, The Hindu, 3 October, 2010,
http://www.hindu.com/mag/2010/10/03/stories/2010100350010100.htm

Labourers go on indefinite strike, press for demands, The Times of India, 3 October, 2010,
http://timesofindia.indiatimes.com/city/jaipur/Labourers-go-on-indefinite-strike-press-for-demands/articleshow/6674845.cms

The mass job guarantee by Aruna Roy & Nachiket Udupa, Himal Magazine, October, 2010,
http://www.himalmag.com/The-mass-job-guarantee_nw4749.html

Cong, activists at loggerheads over NREGA by Sreelatha Menon, The Business Standard, 23 September, 2010,
http://www.business-standard.com/india/news/cong-activists-at-loggerheads-over-nrega/408892

'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/Systemic-reform-to-root-out-corruption-still-needed/articleshow/6541296.cms

NAC members blast execution of NREGA, call it 'anti-labour', The Financial Express, 28 September, 2010,
http://www.financialexpress.com/news/NAC-members-blast-execution-of-NREGA--call-it---anti-labour--/689178/

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,
http://www.telegraphindia.com/1100928/jsp/nation/story_12990989.jsp

Rajasthan refuses to recognise NREGA workers' union by Sreelatha Menon, Sify News, 30 September, 2010,
http://sify.com/finance/rajasthan-refuses-to-recognise-nrega-workers-union-news-news-kj4bOWhfahh.html

Let’s build on the positives, The Hindustan Times, 29 September, 2010,
http://www.hindustantimes.com/Let-s-build-on-the-positives/Article1-606195.aspx

Fear of Freedom by Ruchi Gupta, Hard News, 11 January, 2011,
http://www.hardnewsmedia.com/2011/01/3799