ET Bureau | 11 Aug, 2015, 05.36AM IST
NEW DELHI: The
government may raise the minimum wages in the country by as much as 25%
and also make them binding on all states, a move aimed at improving
the lifestyle of the poor and giving an indirect boost to the rural
economy.
The ministry recently increased the National Floor Level Minimum Wage to Rs 160 per day from Rs 137, with effect from July. This translates into a monthly salary of Rs 4,800 for an unskilled worker, but is only advisory and is not mandatory for states to follow. As a result, wages are very low in some states leading to unrest among workers.
According
to the official, who spoke on the condition of anonymity, the
classification and the changes to make the wage levels binding on
states would require amendment to the Minimum Wage Act, 1948. "We are
working on a formula to arrive at minimum wages for unskilled workers.
This could go up to one-and-half times in semi-skilled category and may
be two times for skilled workers in that state," the official said,
adding that the wages would be revised at regular intervals.
A senior government official told ET that the labour ministry is
considering three groups for states and union territories based on the
per capita income and minimum wages for the unskilled, semi-skilled and
skilled category of workers in each of the provinces.
The ministry recently increased the National Floor Level Minimum Wage to Rs 160 per day from Rs 137, with effect from July. This translates into a monthly salary of Rs 4,800 for an unskilled worker, but is only advisory and is not mandatory for states to follow. As a result, wages are very low in some states leading to unrest among workers.
According
to the official, who spoke on the condition of anonymity, the
classification and the changes to make the wage levels binding on
states would require amendment to the Minimum Wage Act, 1948. "We are
working on a formula to arrive at minimum wages for unskilled workers.
This could go up to one-and-half times in semi-skilled category and may
be two times for skilled workers in that state," the official said,
adding that the wages would be revised at regular intervals.
A back of the
envelope calculation suggest that states like Goa, Delhi, Sikkim,
Chandigarh, Pondicherry and Maharashtra, with highest per capita income
in the country, would be the first category where minimum wage for the
unskilled would be in the range of Rs 8,000 - Rs 9,000.
For states like Bihar, Uttar Pradesh, Manipur, Assam and Jharkhand,
with least per capita income, the minimum wage could be around Rs 6,000
a month, an increase of 25% based on the recently raised National
Floor Level Minimum Wage. Going by this, minimum wages would range
between Rs 9,000 and Rs 12,000 for semi-skilled and skilled workers in
poor states and between Rs 12,000 and Rs 16,000 in rich states. The
Centre hopes revising the wage rate will help the government, as the
step will give room to cut expenditure on social sector programmes and
generate demand in the economy. It could also help ensure that workers
stick to a job and not switch over in lieu of differential wages.
"Most
importantly, unskilled workers may get motivated to move into
semi-skilled and skilled category for a better lifestyle once the fixed
wages are in place," the official added. The move may, however, not go
down well with trade unions which have been demanding a minimum wage of
Rs 15,000 a month, a level the government feels is unrealistic and
could act as a deterrent for employers. Minimum daily wages vary
widely from state to state: In Haryana, the wage for the
highest skilled worker is Rs 241.90, while in Bihar, which supplies
the largest number of migrant workers, wages range from Rs 288 for
workers in engineering workshops to Rs 205 for those on clerical jobs.
In Nagaland,
the best daily rate is Rs 110. In Tamil Nadu, laundry workers and
those in dangerous occupations get Rs 346.20, but most others draw less
than Rs 300.
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