Wages in India only doubled during 1993-2012, despite GDP growing four times in two decades, study says

By: | Published: August 21, 2018 3:57 PM

Even though GDP clocked an annual average growth rate of 7 percent in the last two decades, low wages and inequality persist, a report said.

For India’s path to achieve decent working conditions, low wage and wage inequality pose serious challenges, the ILO report said.

Even though GDP clocked an annual average growth rate of 7 percent in two decades (1993-94 to 2011-12), low wages and inequality persist, a report said. India should work on improving its wage policies in order to promote ‘inclusive growth’ as low wages, gender pay gap and other economic inequalities exist, said India Wage Report: Wage policies for decent work and inclusive growth , published by the International Labour Organization.

For India’s path to achieve decent working conditions, low wage and wage inequality pose serious challenges, the ILO report said.

Even though the GDP rose fourfold in 1993-2012, wages only doubled during the given period, the report said. The estimates by NSSO also hint that the real average daily wage has doubled between the period 1993—94 and 2011—12. For workers in rural areas, casual workers, female workers and low paid employees, wages have moved up faster during the period. However, huge disparities remain.

According to NSSO’s Employment and Unemployment Survey (EUS) in 2011–12, Rs 247 was the average wage per day. The average wage of casual workers was an estimated Rs 143 per day. The higher average wages were earned by only a small number of regular or salaried workers, largely in urban areas and highly-skilled professionals.

Gender pay gap

Though the overall wage inequality in India has declined somewhat since 2004—05, it continues to remain high. The report also said that nearly 33 percent (62 million) workers were paid wages less than the indicative national minimum wage. The rate of low pay was higher in cases of women than others, the report said. With regard to methodology that is used to evaluate the minimum wage rate, there is a lack of consensus, the report also said. Neither the central nor state governments are using it as a floor for determining minimum wages. The report also said that overall wage inequality in India has reduced somewhat since 2004-05. However, it continues to remain high.

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