Shortchanged

The Times of India, November 14, 2010

For Sonia Gandhi, the change could not have been more dramatic. Just last year, her contribution in pushing for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was hailed as the single largest reason for the fresh mandate received by a government avowedly dedicated to the aam aadmi. Yet, last week, Gandhi, as chairperson of the National Advisory Council (NAC) was reduced to lodging a complaint with Prime Minister Manmohan Singh against a major dilution of the same showpiece legislation.

The provocation for Sonia’s letter pertained to a growing sense of disquiet in civil society. This is essentially over the anomaly of labourers being paid less than "minimum wages" — the lowest prescribed rate for bare subsistence — in as many as 19 states. This anomaly arose out of the Centre’s notification two years ago fixing the "wage rate" at Rs 100 per day. The Centre, which bears almost the entire burden of MGNREGA, is entrusted with an unduly wide discretionary power for fixing the wage rate. In her letter to the Prime Minister, Sonia conveyed the NAC’s view that the Centre cannot encroach on the right of workers to be paid minimum wages as determined from time to time by their respective state governments.

Sonia’s intervention followed similar concerns raised with the PM by chief ministers of two of the affected states, K Rosaiah of Andhra Pradesh and Ashok Gehlot of Rajasthan. Both are incidentally Congress chief ministers. This political reaction came after a stay order by the Andhra Pradesh high court on the Centre’s notification on the wage rate, essentially on the grounds that it violated the Minimum Wages Act 1948. When the Centre persisted with its policy of freezing the wage rate at Rs 100 despite the stay order, the high court initiated contempt proceedings against the Union and AP governments.

Meanwhile, in a rare initiative, two former Chief Justices of India (M N Venkatachaliah and J S Verma), four former Supreme Court judges (V R Krishna Iyer, P B Sawant, K Ramaswamy and Santosh Hegde) and one former high court chief justice (A P Shah) signed a statement calling for the immediate revocation of the "unconstitutional" notification under the MGNREGA bypassing the minimum wage law. Adding to the government’s embarrassment, additional solicitor general Indira Jaising gave a written opinion that any payment below the minimum wage "would amount to forced labour", violating the fundamental right against exploitation.

The two civil society forces behind the MGNREGA, Aruna Roy and Jean Dreze, took up the issue in their own different ways. Dreze, as part of an advisory body, was instrumental in obtaining Jaising’s legal opinion. Roy has been on a dharna with other activists for more than a month in Rajasthan. In all this churning within the institutions of governance and civil society, the Ministry of Rural Development has come under attack for giving precedence to financial concerns over constitutional rights. There was no way the ministry could have got away with its subversion of the minimum wage principle as it directly and immediately affected the earnings of the rural poor.

But this subversion is actually part of a series of systemic changes made by the ministry. These changes have caused the scheme to deviate from its original avatar as a radical plan to mitigate the rigors of "jobless growth". The changes are as follows:

* The first major indication of the ministry’s cavalier attitude came in 2008. It was evident in the way it responded to the CAG’s performance audit report on the MGNREGA. When the CAG lamented the wide gap between precept and practice of the programme, the ministry sought to play down lapses by claiming that its performance should not be judged on the basis of its "operational guidelines" as they were merely a recommendation. Thus, by the government’s own admission, this very complex and ambitious programme, which in the last Budget was allocated Rs 40,100 crores, does not have a proper administrative framework.

* The ministry amended the social audit provision in such a way that the executing agency, that is the panchayat, has become less accountable than before. The amendment, effected on December 31, 2008, overturned the basic principle of audit. It empowers the panchayat to conduct its own audit. As a result, the only credible model of social audit in the country, designed by the Andhra government, is no longer legal as it hinges on the participation of trained personnel from outside the panchayat.

* Within 24 hours of demolishing the social audit safeguard, the ministry came up with its infamous notification violating the minimum wage law. That notification, issued on January 1, 2009 has brought out the unbridled discretionary power conferred on the Centre by Section 6(1) of the Act to fix wages lower than the minimum wage. Sonia suggested that a way out of the current mess might be if the Centre issued a fresh notification catching up with the minimum wages in various states. But for a long-term solution, this ambiguous provision on wage rate needs to be read down by courts or amended by Parliament to preserve the sanctity of minimum wage.

* On November 11, 2009, the ministry issued a notification shifting the MGNREGA’s focus from labour intensive to material intensive projects. Expanding the scope of work that could be undertaken under the Act, the ministry ordered that the MGNREGA funds be diverted to construct a facilitation centre in each village named after Rajiv Gandhi. This executive diktat, besides eroding the powers granted to the panchayat under the Act, has allowed material contractors to get a foot in the door. It has also opened up opportunities for corruption.

* The grievance redressal mechanism created in the form of an ombudsman, through a notification issued on September 7, 2009, has turned out to be toothless. The ombudsman can only make recommendations. Unlike his RTI counterpart, he can’t pass orders or impose penalties on errant authorities. As a result, accountability provisions have largely remained on paper. These include an unemployment allowance for those who are not provided work within 15 days of their application and compensation for those whose payment is delayed for longer than 15 days.

Given the insidious ways in which the scheme is being run down by its own administrative ministry, it is just as well that Sonia Gandhi has called for correctives on the minimum wage issue. In the run-up to the fifth anniversary of its enforcement, she needs to do more to rescue her showpiece legislation.