PROCESS BEGINS FOR STATUTORY
CENTRAL MINIMUM WAGE
States may set it higher, not lower; planned link to cost of living
SREELATHA MENON
New Delhi, 9 November
he Minimum Wages
T Act will be amend-
ed to enact a new
centrally set mini-
mum, in the wake of
the National Advisory Council’s
suggestion on asymmetries in
this regard between states on
payments for work done on
schemes under the National
Rural Employment Guaran-
tee Act (NREGA).
The Union labour ministry
has begun consultations on the
proposed change and on mak-
ing the set level mandatory for
all state governments. The lat-
ter could set a higher level, but
not less. At present, the nation-
al minimum wages are only ad-
visory and states are free to ac-
cept or ignore these in setting
their own minimum. What is sug-
gested is that a new central statu-
tory minimum would be linked
to dearness allowance to make
imum wages in many places. In
Andhra Pradesh, the state gov-
ernment even went to the high
court, to press that the Centre
fund at its higher level, not `100.
It even got a favourable order,
but this has not been imple-
mented; the case is still on.
This anomaly will continue
under the proposed change,
with states free to pay more.
However, with a more realistic
central level, to be also more
flexible, the anomaly would be
less. Also, there would be one
central minimum, applicable
PHOTO: REUTERS to all central schemes.
WITH A REVISED MINIMUM, THE ALLOCATION Labour ministry officials did
say such an amendment would
for NREGA and other centrally-funded schemes would go also mean that states may need
up. The allocation this year was `40,100 crore at `100 a day central permission to raise their
minimum wages, but these de-
it flexible and sensitive to price states. For instance, Andhra has tails are yet to be settled.
fluctuations. NREGA wage pay- `112, Karnataka has `133.80, In any case, with a revised
ments are funded by the Centre, Punjab has `142, Mizoram has minimum, the allocation for
but it does so at the rate of `100 `132 and so on. NREGA and other centrally-fund-
a day, which it hasn’t revised for In sum, there’s a situation ed schemes would go up. The al-
two years. This `100 level is less where NREGA payments are location this year was `40,100
than the minimum set in various less than the state’s own min- crore at the `100 a day.