Centre moves to raise minimum wage for workers, labour unions unimpressed

  • DK Singh, Hindustan Times, New Delhi
  • Updated: Jul 04, 2016 08:25 IST
In this file photo, a sweeper can be seen cleaning the Parliament complex. (Sonu Mehta/ HT Photo)

Soon, you may have to shell out more to hire a sweeper or a security guard.

The NDA government is in the process of revising the minimum wages of millions of workers in several sectors, including agriculture, construction and mining. The daily wages of a sweeper or an unskilled construction worker in Delhi, for instance, is proposed to be increased by Rs 81 to Rs 449. Likewise, the position of an unarmed security guard could be upgraded from the semi-skilled to skilled category with a Rs 139 hike in his existing daily wage of Rs 407.

These revisions form part of the labour ministry’s proposal to revise the minimum wages for 45 economic activities in the central sphere, including agriculture, construction, stone mining, sweeping, and loading-unloading. Despite being in the central sphere, they serve as a benchmark for minimum wages in the states too.

“Increasing the minimum wages is a continuous process, and in a country that has a large informal sector, this move will bring cheer to many while boosting the overall economy,” said Soumya Kanti Ghosh, chief economic advisor, State Bank of India.

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Delhi and other major metropolitan cities have been clubbed under one category for the purpose of wages, while the rest of the country is divided into two other categories with lower income structures. A sweeper in Gwalior or Jaipur, for instance, would get Rs 374 per day – up by Rs 67 – if and when the wages are revised. On the other hand, a skilled construction worker in Delhi might see a hike of Rs 98.

The minimum wages are applicable to both the formal and informal sectors “theoretically”, but it’s difficult to implement in the unorganised sector.

Under the Minimum Wages Act-1948, wages have to be reviewed every five years. However, the agriculture sector saw its last wage review in 2005, sweeping and cleaning in 2008, and construction sector in 2009. “Minimum wages must be revised periodically to factor in inflation,” said DK Joshi, chief economist, CRISIL.

Sources said the proposed changes in the wage structure have been brought before the Minimum Wages Advisory Board, and these will be notified soon after being cleared.

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The proposed outreach to workers comes at a time when the NDA government seems to be developing cold feet over contentious labour reforms. The Code on Industrial Relations, which seeks to make closing down firms with less than 300 workers easier and registration of trade unions tougher, has been put on the backburner. It was sent to the law ministry for vetting four months ago but received no response, a senior labour ministry officer told HT. The Small Factories Bill, which seeks to exempt factories employing less than 40 workers from 14 labour laws, has been awaiting the cabinet’s nod for several months now.

If the proposed sops to workers are expected to mollify trade unions, especially the RSS-affiliated Bharatiya Mazdoor Sangh (BMS), the government could be in for a disappointment. Terming the proposed changes in the minimum wages as “not enough, not logical”, BMS general secretary Virjesh Upadhyay told HT: “The Pay Commission has suggested Rs 18,000 as the minimum wage. Any revision (in minimum wages) has to start with this.”

Tapan Sen, general secretary of CPI(M)’s trade union wing CITU, called it a fraud because the minimum wages in states were “already higher” than the labour ministry’s proposals.

However, labour minister Bandaru Dattatreya spoke in the Centre’s defence. “The government is pro-employment and pro-worker. In the past two years, there has been no law against workers. We hope wisdom prevails on the opposition in the monsoon session of Parliament,” he told HT.

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