The Centre has raised the national floor-level minimum wage (NFLMW) by 10% to Rs 176 per day from Rs 160 a day earlier with effect from July 1 and sent advisories to the states to comply with the new threshold. Industrial workers and employees in sectors, including plantations and services, could benefit from the wage hike, if the states follow the revised national wage floor. NFLMW, which has only persuasive value as it lacked statutory backing, is revised every two years on the basis of rise in consumer price index for industrial workers (CPI-IW) in order to have a uniform wage structure and reduce the disparity in minimum wages across the country. The NFLMW was last revised from Rs 137 a day to Rs 160, an increase of around 17%, effective from July 1, 2015.
“While reviewing the movement of CPI-W during April 2016 to March 2017 over the period April 2014 to March 2015, it was observed that the 12 monthly average CPI-IW has risen to 275.92 from 250.83. Accordingly, the NFLMW has been revised upwards to Rs 176 per day from existing Rs 160,” labour and employment minister Bandaru Dattatreya said in a letter written to all states. “I request you for fixation/revision of the minimum rates of wages in respect of all scheduled employments in your state/UT not below the NFLMW of Rs 176 per day with effect from July 1, 2017,” he added.
Barring a couple of states, most of the states keep minimum wages for many ‘scheduled employments’ lower than the NFLMW. There are also wide disparities between the minimum wages actually enforced among states and across sectors, a situation that could partly be explained by the differences in income levels and the prices among states.
The concept of NFLMW was first mooted on the basis of the recommendation of the National Commission on Rural Labour (NCRL) in 1996. NFLMW was fixed at Rs 35 per day in 1996 and has since been revised almost regularly every two years taking into account the increase in the Consumer Price Index number for industrial workers, CPI (IW). NFLMW was raised to Rs 137 in July 2013 from Rs 115 a day fixed in 2011.