Union labour ministry of India has proposed to the cabinet to increase the minimum wages in different sectors of the economy. If accepted, it will raise the money in the hands of workers significantly across the sectors. The proposal includes, a daily wage of ₹449, ₹81 more than the current ₹368 for an unskilled worker in construction sector and a sweeper. similarly, a raise of ₹139 a day from the current ₹407 is proposed for an unarmed security guard working in the private sector. Ideally, these wages decided by the union government should serve as the basis for salary of workers in both formal and informal sectors. However, complex web of labour laws and inflexible labour market render the policy execution difficult.
Soumaya Kanti Ghosh, the Chief Economic Advisor to State Bank of India stated that, “Increasing the minimum wages is a continuous process, and in a country that has a large informal sector, this move will bring cheer to many while boosting the overall economy.”
There are more than 40 union laws and over 150 state labour laws in India, mostly of which are outdated, costly and time consuming. Further, there is uncertainty as to the approach to initiate labour Reforms whether it should be market led or through the legislative means. From the perspective of the Economy, suitable timing for the modification in the laws is, when the economy is booming as disruptions in the market at this time can be easily absorbed. Another problem is that India does not have a system to revise workers’ wage in accordance with the prevailing inflation rates. The Minimum Wages Act, 1948 mandates to review wages in different sectors in every five years but is barely followed.
The government has enlisted 45 categories of employment into the revised category including Agriculture, Construction, stone mining and sweeping and loading and unloading. The hikes are divided into categories of cities where in a metropolitan area a sweeper after a hike would get Rs. 98 while a sweeper in of a lesser populated and less developed region would get Rs. 67.
Criticized by all the major Labor union’s, as the proposed rate of minimum wage has been set at Rs. 18,000. The RSS related trade Union Bhartiya Mazdoor Sanghs (BMS) General secretary Virjesh Upadhyay told the Hindustan Times: “ The Pay Commission has suggested Rs 18,000 as the minimum wage. Any revision (in minimum wages) has to start with this.” Further terming the hikes as “not enough, not logical”,
Communist parties affiliated trade union CITU’s General Secretary Tapan Sen has termed the hikes as a ‘fraud’ as the minimum wage scale is already higher then the central governments mandate in the states.
Union Cabinet Minister for Labour, Bandaru Dattatreya has defended the centers moves, spoke to HT stipulating that, “The government is pro-employment and pro-worker. In the past two years, there has been no law against workers. We hope wisdom prevails on the opposition in the monsoon session of Parliament,”