Labour minister Mallikarjun Kharge said he favours making it legally obligatory for states to abide by the national floor level of minimum wages prescribed by the Centre.
The floor, a voluntary benchmark for states to adopt with regard to wages for around 180 specified categories of work ? industrial and agricultural ? is Rs 100 at present and is meant to be revised periodically to accommodate retail price inflation. In an interview with FE, Kharge said he was also trying to get all stakeholders including the SME sector agree to a plan to expand coverage of the Employees Provident Fund Act, which currently provides for mandatory provident fund and pension fund facilities to low-paid employees in establishments that have 20 or more workers.
Expanding EPF coverage would mean bringing establishments employing fewer people ? say 15 or 10 ? also under the ambit of the law, and would benefit lakhs of employees in smaller firms. The minister, however, said a consensus was yet to be achieved on this proposal at the EPF board of trustees. The opposition from the SME ministry is also a major stumbling block.
?We are trying for this (expanding EPF coverage) but there should be a consensus over the matter. Unless employers, government and other stakeholders agree, we cannot go ahead,? the minister said. He, however, added: ?Anyway, we want a reduction in the number (of minimum employees for an establishment to be EPF-compliant).?
Under the EPF law, whenever salary is below Rs 6,500 a month, the employee as well as the employer has to compulsorily contribute to the fund at the rate of 12% of the emoluments. The EPF Act was amended in 2008 to make contribution to social security (pension) scheme mandatory for ?international workers.?
The rural employment guarantee scheme has somewhat helped lift minimum wages in many parts of the country.
Kharge said his ministry ? which is aiming at an employment growth of 2.5% in the medium term assuming 9% GDP growth ? was pitching for investments in labour-intensive and high-employment-elasticity sectors. He cited gems and jewellery, agricultural processing, mining, construction and various emerging service industries as sectors which can drive employment growth, even as labour intensity of manufacturing is on the decline. When asked about the long-pending industry demand to reduce the rigidity of the labour market, Kharge said his ministry would not support labour flexibility to the extent of ?hire and fire.? ?We want to help industry but not at the cost of the welfare of labour,? he said.
?Obviously we are in favour of investment which would promote employment in India. For sophisticated workers, there are always takers and investment is forthcoming. The idea should be to encourage investment which promotes mass employment,? said the minister.
When asked about the continuing trend of employment in the unorganised sector growing faster than that in the organised sector (the ratio between the two is already 9:1), he said the measures taken by the government under the national skill development scheme would make lakhs of people from the lower strata of society ?employable? in the organised sector. ?The aim is that by 2022, 50 crore persons will be trained in skilled labour with the active participation of the private sector,? Kharge said.
On the dichotomy between unemployment rate (8% as per the estimate on the higher side), and the below-poverty-line (BPL) data which shows up the poor quality of employment, he said the quest of millions for decent work would be facilitated by the social security net being created for unorganised sector workers and the ambitious skill upgradation programmes. The law for social security schemes for unorganised sector workers provides for the basic framework for formulating welfare programmes. The minister admitted that Rs 1,000 crore disbursed to the ministry for running the scheme was grossly inadequate, but called it a ?good beginning.?