Minimum wages may be hiked before polls

Minimum wages may be hiked before polls

The central government could fix a higher mandatory minimum wage rate applicable across the country ahead of the general elections, adopting recommendations of a high-level expert panel looking into the matter, officials said.

An expert committee headed by SP Mukherjee, set up in 2021 for a period of three years till June 2024, is expected to submit its report soon, and the new floor wage could be notified ahead of the elections likely to be held during April-May, officials said.

“The report is by and large ready and the committee is expected to submit it soon after one final round of meeting,” a person aware of the deliberations told ET, requesting not to be identified.

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There are nearly 500 million workers in the country and 90% of them are in the unorganised sector. The floor wage, currently at ₹176 per day, was last revised in 2017 and is not statutory for states. It is felt that a significant revision is overdue, to factor in increase in the cost of living and inflation, and the new minimum wage would be mandatory across states as the Code on Wages, 2019, empowers the central government to fix the floor wage, taking into account minimum living standards of a worker, officials said.

A committee headed by Anoop Satpathy had proposed a floor wage of ₹375 per day in 2019 but the same was not accepted by the government because of the financial implications for employers, including the government as it was over 100% higher than the existing floor wage. “There has to be a balance between the existing₹176 per day and ₹375 per day as recommended by the Satpathy committee,” said an employers’ body representative who is aware of the deliberations. “The current committee is expected to arrive at a balanced wage for minimum financial implication on employers, including both central and state governments.” The committee is likely to peg the floor wage, taking into account inflation and household expenditure costs. It has taken nutritional requirements and non-food expenditure into account to arrive at a floor wage, officials said.

As per the Code on Wages, 2019, the government can fix different floor wages for different geographical areas but it does not allow lowering of wage in case the minimum rates of wages fixed by the appropriate government (states or the Centre) is more than the existing floor wage.

At present, some states have set their daily wage floor rate lower than ₹176 a day while some others have higher floor rate than that. This divergence in minimum wages between states play a role in migrant labourer movement within the country.

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