Cabinet to take up statutory minimum wage proposal soon

The Labour Ministry is set to take to the Cabinet a proposal to make the national minimum wage — Rs 115 a day now but set to be revised — statutory and universal, a move that, if it comes about, would force as many as 16 states to raise their minimum wage and benefit lakhs in the unorganised workforce.

"We are taking it to the cabinet for a decision," a senior official in the Labour Ministry told The Indian Express about a cabinet note to amend the Minimum Wages Act, 1948 to make the national floor-level minimum wage statutory, and enhance fine and prison time for violation of the law. Once that is done, the wage would be revised every five years to offset inflation.

At present, since NFLMW is not binding on states and employers — 1679 scheduled employments are in the state domain and 45 in the Central domain — the Labour Ministry merely advises states to raise it. "Leave aside uniform wages, many states have not been revising the minimum wages on a regular basis despite repeated advisories by the Centre. Some states even have minimum wages as low as Rs 68. Even many high income states have a poor track record when it comes to revising minimum wages which means the difference in paying capacity is not always the reason for wide differential in minimum wages across the states," an official said.

The proposal for a national minimum wage to reduce inter-state and inter-employment wage disparities — in 16 states and union territories, wages in some scheduled employments are less than the NFLMW — has been hanging fire since 2009 when it was first brought to the Cabinet, only to be referred to a committee of secretaries.

Several ministries, particularly the Agriculture Ministry, had reservations about a legally-enforceable minimum wage. Their arguments against the move ranged from difficulties in enforcing it to the additional financial burden it would entail. Besides, fears were expressed that a higher wage could entice labour away from farming and plantation, where daily wages are low.

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