Government panel for raising minimum wage to Rs 375

The recommendations, if accepted, will result in a wage bracket ranging from Rs 340 for Bihar and Uttar Pradesh to Rs 447 for Gujarat.

NEW DELHI: An expert committee set up by the government has recommended setting the minimum wage at Rs 375 a day, higher than the existing rate of Rs 321 for agriculture or unskilled workers and Rs 371 for semi-skilled workers.

The committee has come up with a new methodology that does away with the variation in wages based on sector, skills and location. It has proposed a “balanced diet approach” to compute minimum wages.

The recommendations, if accepted, will result in a wage bracket ranging from Rs 340 for Bihar and Uttar Pradesh to Rs 447 for Gujarat.

An additional Rs 55 has been proposed as rent allowance for workers in urban India. The proposal, which comes ahead of the general elections, will help millions of workers if approved by the central advisory body of the labour ministry.

The ministry of labour and employment had constituted the committee under the chairmanship of Anoop Satpathy, fellow of the VV Giri National Labour Institute, in January 2017 to review and recommend ways to calculate the national minimum wage. The committee submitted its report to the labour secretary on Thursday.

The report will be placed before the central advisory board and tripartite bodies for consultations and approval, following which the labour ministry will notify the national minimum wage.

The committee also recommended reviewing the consumption basket every five years, subject to the availability of expenditure data from the National Sample Survey Office, and revising and updating the basic minimum wage at least in line with the consumer price index every six months to reflect changes in the cost of living.

Using the nutritional requirement norms recommended by the Indian Council of Medical Research, the panel recommended a balanced diet approach that is culturally palatable to set the national minimum wage, the labour ministry said in a statement on Thursday.

The committee proposed that the minimum wage should include reasonable expenditure on essential non-food items such as clothing, fuel and light, house rent, education, medical expenses, footwear and transport, which must be equal to the median class, and spending on other non-food items be equivalent to the sixth fractile (25-30%) of household expenditure distribution, as per the NSSO-CES 2011/12 data.

On this basis, the panel has recommended fixing the need-based national minimum wage at Rs 375 per day (Rs 9,750 per month) as of July 2018, irrespective of sectors, skills, occupations and ruralurban locations for a family, the labour ministry said.

“It has also recommended introducing an additional house rent allowance (city compensatory allowance), averaging up to Rs 55 per day, or Rs 1,430 per month, for urban workers over and above the national minimum wage,” it said.

Source: The Economic Times