Come July 1, industrial workers and employees in sectors including plantations and services could benefit from a wage hike, if the states follow the revised national wage floor. The Centre has raised the national floor-level minimum wages (NFLMW) to Rs 160 per day from Rs 137 now and sent advisories to the states to comply with the new threshold, official sources told FE.
They added that the Centre has also mooted making NFLMW mandatory given that there continues to be instances of some states keeping 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, leading to significant variations in purchasing power.
In order to have a uniform structure and to reduce the disparity in minimum wages across the country, the concept of NFLMW was first mooted on the basis of the recommendation of the National Commission on Rural Labour (NCRL) in 1996. However, the NFLMW has practically had only persuasive value as it lacked statutory backing.
NFLMW was fixed at R35 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 last raised in July 2013 from R115 a day fixed in 2011.
The CPI (IW) index stayed in the range of 6.4-12% since 2008. After hitting as high as 12% in 2010, CPI (IW) has maintained a roller-coaster ride — it eased to 8.9% in 2011 before rising to 10.9% in 2013 and dropping again to 6.4% in 2014. In the current calendar year, it has slowed almost consistently from 7.2% in January to 5.8% in April.
Labour ministry data showed workers in the cashew and coconut gardens in Andhra Pradesh get R125 per day wage against the present national floor of R137 per day. In Puducherry, security guards get R100 per day, same as the agarbatti making workers in Gujarat. Those in the onion cleaning job in Maharashtra get R120 per day. Workers in the North East region get the lowest wages. It varies in the range of R72 and R89 per day in Manipur, Assam and Arunachal Pradesh.
The Minimum Wages Act, 1948, covers a wide spectrum of employment-creating sectors ranging from industry, construction, agriculture to services sectors like automobile work shops, rice and flour mills and domestic helps. In many of these areas, practically, the wage floors are not strictly implemented.