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Fin Min clarifies Minimum Wage under NREG

Written by: Staff

New Delhi, July 6: The Finance Ministry today denied reports that at a meeting taken by Prime Minister Manmohan Singh yesterday the proposal of the Ministry of Finance, to fix the guaranteed minimum wage under the National Rural Employment Guarantee Act, was turned down.

"The reports are factually incorrect", the Ministry of Finance said in a release here, and clarified the position in this regard giving details of the sequence of events regarding the present scheme of things.

The Ministry said that at a meeting taken by the Prime Minister in October 2004, a consensus emerged that the minimum wage should be notified under the proposed NREG Act itself, and not linked to the minimum wages under the Minimum Wages Act.

"When the Budget for 2006-07 was being prepared, the Ministry of Finance was instructed to make suitable allocation on the basis that the cost would be Rs 100 per worker per day (Rs.60 as the wage component and Rs 40 as the materials component). Accordingly, suitable budgetary provision was made", an official release here said.

The Ministry said when the NREG Bill was before Parliament, there were consultations between the Government and other political parties. The Defence Minister led the discussions on behalf of the Government.

The Ministry said at the end of the consultations, the Defence Minister conveyed to the Finance Minister that amendments would be made to the draft Section 6 and it would be made clear that the Central Government will notify the wage rate under Section 6(1) immediately after the Act came into force.

"After the Act was passed, Ministry of Rural Development expressed certain difficulties in notifying the wage rate under Section 6(1) of the Act. Hence, at the instance of the Ministry of Rural Development, a meeting was held on July 5,2006, at which a decision was taken to continue the existing arrangement and review the matter at an appropriate time in the future", the Ministry said.

"The Ministry of Finance fully understands the process of decision-making in the Cabinet system of Government and is always happy to implement any decision - or revised decision - of the Prime Minister and the Government," the release added.


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