Minimum Wages in India: Significant Hike Announced for Workers
In a move aimed at providing financial relief to workers amidst rising inflation, the Indian government has announced a significant increase in minimum wage rates, effective from October 1, 2024. This decision, which revises the Variable Dearness Allowance (VDA), is set to benefit workers across various sectors, particularly those in the unorganised sector.
Revised Wage Rates
The new wage rates, as announced by the Ministry of Labour and Employment, will be categorized based on skill levels and geographical areas. For area "A," which includes major urban centers, the daily wages will be as follows:
- **Unskilled workers**: ₹783 per day, translating to ₹20,358 per month. - **Semi-skilled workers**: ₹868 per day, or ₹22,568 per month. - **Skilled workers and clerical positions (without arms)**: ₹954 per day, or ₹24,804 per month. - **Highly skilled workers and security personnel (with arms)**: ₹1,035 per day, or ₹26,910 per month.
Impact on Various Sectors
The revised wage rates will benefit workers engaged in sectors such as building construction, loading and unloading, watch and ward, sweeping, cleaning, housekeeping, mining, and agriculture within central sphere establishments. This move is particularly significant for workers in the unorganised sector, who often face the brunt of inflationary pressures.
Calculation and Revision of Minimum Wages
The minimum wage rates in India are calculated based on the Consumer Price Index for industrial workers (CPI-IW). The VDA is revised biannually, on April 1 and October 1, using the six-month average increase in the CPI-IW. This ensures that the wages keep pace with the rising cost of living.
State-Level Variations
It is important to note that minimum wage rates in India vary significantly across different states and regions. For instance, Delhi has also announced its own set of revised minimum wage rates, effective from October 1, 2024. In Delhi, the monthly wages for unskilled workers will rise from ₹17,494 to ₹18,066, while semi-skilled workers will see an increase from ₹19,279 to ₹19,929, and skilled laborers from ₹21,215 to ₹21,917.
Lack of a National Minimum Wage
Despite these revisions, India still lacks a uniform national minimum wage. The Code on Wages Act, 2019, mandates that minimum wages be fixed by respective state governments, leading to regional disparities in minimum wage floors. For example, the minimum daily wage can range from ₹160 in Bihar to ₹423 in Delhi.
Historical Context and Compliance
The Minimum Wages Act of 1948 was enacted to prevent the exploitation of labor by ensuring a minimum standard of living. The Act applies to all establishments, factories, and industry types, with state governments having the authority to fix and revise minimum wages for scheduled employments. Non-compliance with these regulations can result in severe penalties, including imprisonment and fines.
In conclusion, the recent hike in minimum wage rates is a significant step towards supporting workers in India, especially those in the unorganised sector who are most vulnerable to economic fluctuations. As the country continues to navigate the complexities of labor regulation, this move is seen as a welcome relief for many workers.