Skip to main content

Labour Min Puts Minimum Wage Hike on Back Burner

By
Cites fall in global and domestic demand that impacted Indian manufacturers
The labour ministry has put on hold a proposal to increase minimum wages for all by up to 25% for the time being because of a fall in both global and domestic demand that impacted Indian manufacturers.
A senior labour ministry official told ET that the time is not ripe to enhance wages and make it binding on all states as this would raise the input cost for manufacturers and make them uncompetitive.
“We are holding back the increase in minimum wages for a while now and may reconsider this at a later stage when demand picks up so that the additional burden incurred by manufacturers through higher wages is compensated by increase in order inflow,“ the official said on condition of anonymity.
The central government is projecting lower cost of labour in India vis-à-vis China, where wages are on the rise, as a major attraction for manu facturers to set up shops in the country along with its focus on the ease of doing business.
“This kind of substantial hike in labour wages will go against the government's approach to `Make in India' and could impact investment decisions as of now,“ an industry expert said, requesting not to be iden tified.
As part of its proposal to enhance mi nimum wa ges, conceived by labour mi nistry last ye ar, all states and union tere grouped into ritories were grouped into three categories based on per capita income and minimum wages for the unskilled, semiskilled and skilled workers in each of the provinces.
Based on the formula arrived at, states like Goa, Delhi, Sikkim, Chandigarh, Pondicherry and Maharashtra, with highest per capita income in the country, would be in the first category where mini mum wage for the unskilled would be in the range of . 8,000-9,000 per month.` 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, a hike of 25% based on recently raised National Floor Level Minimum Wage.
Going by this, minimum wages would range between Rs. 9,000 and Rs.12,000 for semiskilled and skilled workers in poor states & between Rs.12,000 and Rs. 16,000 in rich states.
Trade union leaders said higher wages are essential. “Naturally , employers' side will be hurt by increase in wage cost, but this is essential as wages in India are the lowest and unless the worker is compensated well he would not be motivated to deliver to his best ability ,“ said DL Sachdeva of the All India Trade Union Congress.
The National Floor Level Minimum Wage was revised last year to Rs.160 a day from Rs.137.This ranslated into a monthly salary of Rs. 4,800 for an unskilled worker, but is not mandatory for states to follow.
The Economic Times New Delhi,07th July 2016

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more