The Delhi Cabinet on Wednesday cleared the labour department’s proposal to hike minimum wages in the city by about 50%. The decision comes amid opposition from a section of traders and industrialists, citing fear of a flight of businesses to neighbouring states.
Minimum wages for unskilled people in the city will rise to Rs 14,052 against the existing Rs 9,568. For semi-skilled and skilled people, wages will rise from Rs 10,582 to Rs 15,471 and from Rs 11,622 to Rs 17,033, respectively.
Defending the government’s decision, chief minister Arvind Kejriwal said it was based on sound economic theory as the ‘trickle-down theory’ had failed to help the poor of the country. The ‘trickle-down theory’ argues for financial benefits to large businesses, investors and entrepreneurs in order to stimulate economic growth.
Kejriwal said the money in the hands of the poor and middle class will ultimately boost the economy.
“It is the responsibility of any responsible government to take care of the poor... This model has failed. In fact, the opposite is happening. Money of the poor is going up… Our government works and makes policies for the poor and middle class. Through these measures we want to park money straight into the pocket of the poor,” Kejriwal said.
Interestingly, ruling AAP’s trade wing has warned of a strike in Delhi in case the decision to raise wages is not withdrawn. Kejriwal, however, said that while there will be an escalation of cost of production, in the medium term and long term it will benefit everyone.
“In the medium and long term they (traders) will also benefit. When money will reach the poor then it will have a positive effect on the economy as demand and subsequently consumption will rise,” Kejriwal said.
The justification, however, failed to satisfy the traders who termed the decision as “unjustified”. The ruling party’s trade wing has also raised a red flag over the decision.
AAP’s trade wing convener, Brijesh Goyal, said several trade associations held meetings over the issue through the day and they have decided to approach Kejriwal over the issue as the upward revision in wages will not only lead to “laying off” of workers but also result in complete industrial and trade “shutdown”.
“Till now we have not met the CM. In the meeting today (Wednesday), it was decided that all trade and industry bodies will seek appointment with the CM on Friday. We want to keep the window of dialogue open. If nothing works out, strike will be the last report,” Goyal said.
Earlier in the day, several labour unions felicitated the chief minister at his residence over the decision to revise minimum wages.