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Workers will be benefited from proposed increase in minimum wages
The contributions of labourers in the economy and the development of the country cannot be underestimated. Despite this, wages given to laborers in many states of the country are still very low, whereas inflation has qualitatively increased in the last few years.
By looking at such anomaly, the Central government had set up an expert committee last year under the leadership of Fellow Anoop Satpathy of the VV Giri National Labour Institute to increase the minimum wages of the workers, whose report has been published on February 11, 2019. The committee was given the responsibility of determining the minimum wages at the national level.

However, in other countries of the world, work has been done in this direction since long ago. For example, countries such as Brazil, Russia and South America have already fixed the minimum wage in their own country long ago, while China, Vietnam and Malaysia have chosen a different model of minimum wage, which is related to the work area of workers and a little bit depends on their professional tasks. 

The maximum benefit from the committee's proposal to increase the minimum wages is likely to be available to states like Andhra Pradesh, Telangana, Gujarat, Himachal Pradesh, Maharashtra, Tamil Nadu, Nagaland, Arunachal Pradesh, Tripura, Meghalaya etc. The committee has recommended increasing the minimum wages of workers in these states by 2 to 5 times, because the minimum wage here is currently very low. According to a November data, the unskilled labourers' wages in Andhra Pradesh and Telangana are Rs 69 per day or Rs 1,794 per month. The committee has recommended increasing the minimum wages to 380 rupees per day in these states.

The assessment of wages has been done keeping in mind the cost of the resources required for living in the respective states and the local conditions which affect the wages of workers. The committee has also said that the rent of the housing facility in urban areas should be included in the wages of the urban labourers. 

At present, the highest wage, which is Rs 538 per day, is being given in Delhi. However, the committee has proposed to pay wages, workers to 380 rupees per day, which is much more than the present minimum wages. Even then, it cannot be considered sufficient considering the rising inflation. There is a difference of 20 percent in the minimum and maximum wages in Madhya Pradesh, while in Sikkim it is 29 per cent.      

In other states, this difference can also be considered remarkable. According to the committee, despite fixing the salary under "Minimum Wages Act, 1948", the difference in minimum wages is more or less present in all the states. Therefore, given the level of proposed minimum wage, the government needs to address the discrepancies in this direction as soon as possible.

At present, there is no systematic and effective process to increase minimum wages in the country. In the case of the state, the state government decides the wages of the workers. But, it depends largely on the financial capacity of the state and the will power of the government to take the welfare measures. Due to this, there is a big difference between minimum and maximum daily & monthly wages in different states. The Government hopes that if the proposals of the committee are implemented then the difference between wages can be reduced considerably.

In the last few years, the minimum wages in certain scheduled jobs like brick making factories and oil mills have already been reduced. In Kerala, where workers are given the highest wages, even in the agriculture and construction sectors, wages decreased from Maharashtra during the financial year 2018-19. This can be confirmed by the Wage Report of International Labor Organizations, 2018. In such a situation, the need to arrange uniform minimum wages across the country increases. At the same time, keeping in view inflation and local conditions which affect the wages of laboures, there is a need to make changes in average minimum wages in every 2 to 3 years.

It can be said that inflation is still a major problem for a large population of the country. In the last few years, the income of a large part of the population has definitely been increased, but it is also true that a section of our society is still unable to get two-time food, whose biggest cause is the low wages. However, the proposal to increase the minimum wage by the government to 5 times can be considered as good initiative.  This initiative of the government will definitely improve the socio-economic condition of the weaker and backward sections of society.

About the author: Satish Singh is currently working as Chief Manager in State Bank of India's Economic Research Department, Corporate Centre, Mumbai, and has been writing mainly on financial and banking topics for the last 10 years.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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