Jairam vs Pranab over job plan

Apart from re-igniting the debate over statutory minimum wages and centrally decided price, the order forces the central government to pay about Rs 4,000 crore to workers under the rural job plan as arrears and R1,000 crore every year.

According to sources, in a meeting last week finance minister Pranab Mukherjee advised rural development minister Jairam Ramesh to appeal against the recent Karnataka high court order directing the government to pay minimum wages under the scheme instead of a centrally decided price.

Sources said the law ministry also advised the rural development ministry to appeal against the order. But Ramesh, whose ministry runs the R40,000 crore scheme, feels challenging the order will go against the pro-poor agenda of the UPA.

"We have not decided on the matter yet," Ramesh told HT on Wednesday.

The finance ministry is concerned that if the HC order is not appealed against in the Supreme Court, the Centre will have to pay R4,000 crore in the form of arrears (since January 2009) and an additional R1,000 crore every year, sources said.

Another concern is that if linked with minimum wages, the states will arbitrarily hike the minimum wages forcing the Centre to shell out more funds for the programme.

"I am not in favour of an appeal. We are discussing how to resolve the issue politically and administratively," Ramesh had said earlier.

Ramesh recently also wrote to Prime Minister Manmohan Singh requesting amendments in the Act streamlining minimum and rural job plan wages.

Ruling against section 6 prescribing wages under MGNREGA, the Karnataka high court had ordered payment of wages according to the state's minimum wages.

Six states including Rajasthan, Andhra Pradesh, Karnataka, Kerala are paying MGNREGA wages lower than the minimum wages applicable locally. The court stated the same as violation of the Constitutional provisions.