Democracy dividend: Min wages could go up before general elections

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Call it the dividends of democracy if you want. The Centre could raise minimum wages across the country before the general elections, officials have told The Economic Times. The minimum wage was last revised in 2017 and is now at the level of Rs 176/day.

It is not mandatory for the states to implement it, but the new one is likely to be implemented across the country. The groundwork is about to be completed. A committee led by S P Mukherjee was constituted in 2021 and is supposed to submit its report soon following which the Centre might announce its decision, officials on condition of anonymity told the newspaper.

“The report is by and large ready and the committee is expected to submit it soon after one final round of meeting,” said an official.

There are about 50 crore workers in India, a number far higher than the combined population of the US and Russia. As many as 90% of that number fall in the unroganised industries and need the protection of the minimum wage. Experts point out that the amount of Rs 176 a day is old and is in urgent need of revision since in the past six years the cost of living has gone up by a big margin. The new minimum wage is likely to be mandatory in the states as the Code on Wages 2019. Right now, states do not need to enforce the minimum wage of Rs 176 a day.

In 2019, a committee headed by Anoop Satpathy, who was associated with the V V Giri National Labour Institute recommended that a minimum wage of Rs 375 a day be fixed. At that time the Centre did not accept it since it would have hurt the employers financially.

“There has to be a balance between the existing Rs 176 per day and the Rs 375 as recommended by the Satpathy committee. The current committee is expected to arrive at a balanced wage for minimum financial implication for employers, including both central and state governments” said an office bearer of an employers’ body.

As always, the Mukherjee committee is expected to determine the minimum wage after factoring in cost of living and inflation. It has accounted for nutritional requirements and non-food expenditure into account as well.

Right now, a few states have fixed daily wage floor rate lower than Rs 176 a day while some others have floor rate which is higher. This gap in minimum wages is reckoned as a driver triggering migrant workers across the country. The term of the Mukherjee committee is set to end in June 2024.