Minimum wage rate in India to rise before general elections

The minimum wage in India looks to increase before the elections in India, with committees looking to increase the rate to accommodate people's lifestyles.
By: | January 16, 2024
Topics: Compensation and Benefits | India | News | Uncategorized

The central government of India is looking to implement a higher mandatory minimum wage rate applicable across the country ahead of the general elections, with the help of recommendations of a high-level expert panel looking into the matter.

An expert committee headed by SP Mukherjee, an Indian statistician and the former Centenary Professor of Statistics at the University of Calcutta, was set up in 2021 for three years until June of this year is expected to submit its report soon, with a new floor wage announced ahead of the elections likely to be held during April-May.

There are nearly 500 million workers in the country and 90% of them are in the unorganised sector. The floor wage, currently at IN₹176 (US$2.13) a day, was last revised in 2017, and significant need to revise the rates to factor in increases in the costs of living and inflation.

A committee headed by Dr Anoop Satpathy, Professor of Economics at V.V Giri National Labour Institute and Wage Specialist proposed a floor wage of IN₹375 (US$4.53) per day in 2019. It had not been accepted by the government because of the financial implications for employers, including the government as it was over 100% higher than the existing floor wage. “There has to be a balance between the existing IN₹176 (US$2.13) per day and IN₹375 (US$4.53) per day as recommended by the Satpathy committee,” said an employers’ body representative. “The current committee is expected to arrive at a balanced wage for minimum financial implication on employers, including both central and state governments.”

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The committee is likely to peg the floor wage, considering inflation and household expenditure costs. It has taken nutritional requirements and non-food expenditure into account to arrive at a floor wage, officials said.

Currently, some states have set their daily wage floor rate lower than IN₹176 (US$2.13) while some others have a higher floor rate than that. This divergence in minimum wages between states plays a role in migrant labourer movement within the country, explained the Economic Times.