Labour min may censure states for wage gaps, lax enforcement

Written by Raj Kumar Ray | New Delhi | Updated: Sep 18 2012, 07:35am hrs
Worried over a subdued job market due to the economic slowdown, the Centre is likely to censure some states over disparity in wages of factory workers, tardy implementation of labour laws and slow progress on skill development.

Union labour minister Mallikarjun Kharge has convened a meeting with state ministers on September 27 to discuss the contentious issues. Top of the minister's agenda, sources said, is the wide divergence of minimum wages among states and the non-compliance by some states even in offering the government-mandated national floor level minimum wage (NFLMW) to workers.

Though states are free to prescribe higher wages, the Minimum Wages Act mandates that workers can't be offered less than the NFLMW. The government has revised the minimum wage floor successively from R35 per day in 1996 to R115 in 2011 to compensate workers for inflation.

At present, the wages offered to unskilled workers in states like Assam, Jammu & Kashmir, Meghalaya, Nagaland, Orissa and Tripura are lower than R115 per day, whereas they are as high as R270 in Delhi.

Even within a state, the wages vary a lot R69.00-231.71 per day in Andhra Pradesh, R85.20-353 in Kerala, R88.29-222.35 in Tamil Nadu, R100.00-248.15 in Maharashtra and R98.67-200.77 in Uttaranchal. Despite persistent efforts by the Centre, various state governments have lagged in revising the minimum wages on a regular basis, set aside uniform wages, says the agenda paper of the labour ministry.

It is important to note here that difference in paying capacity has not always been a reason for the wide differential in minimum wages across the states. This is evident from the fact that many high income states have also a poor track record of revisions as against many low income states, it said. States are also required to revise the minimum wage rates from time to time by revising the variable dearness allowance (VDA) as per the Minimum Wages Act.

So far, 24 state governments and Union Territories have adopted the VDA as a component of minimum wage and they revise it twice a year or annually, as may be applicable, taking into account the rise in the consumer price indices for industrial workers (CPI-IW).

However, states, including Arunachal Pradesh, Goa, Himachal Pradesh, J&K, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Puducherry, have not adopted VDA.

Kharge is also worried over the slackness among some states to implement various labour laws, such as Payment of Wages Act, Minimum Wage Act, Contract Labour (Regulation and Abolition) Act, Factories Act, Equal Remuneration Act, Maternity Benefit Act and Industrial Disputes Act.

As labour is under the Concurrent List in the Constitution, state governments are responsible for implementing them and the Centre monitors them.

While it was decided that states will send quarterly progress reports, sources said states do not send the reports regularly to the ministry of labour & employment despite repeated requests. The government's ambitious aim of skill development of 500 million persons by 2022 also seems to remain a tall task, sources said, citing low utilisation of funds by states for upgrading ITIs. Between 2007-08 and 2011-12, the Centre provided R3,067.50 crore to 1,227 ITIs, whereas the utilisation of fund was only R531.80 crore or 22.43%.