Open Forum
New Delhi, 25 May
2022
Minimum Wage
NATIONAL BASE VITAL
By Dhurjati Mukherjee
A recent study commissioned by the Economic Advisory
Council (EAC) has backed universal basic income to reduce the income gaps as well
as devising an urban MGNREGA to rehabilitatesurplus labour. “Raising minimum
income and introducing universal basic income are some of the recommendations
that can reduce the income gap and equal distribution of earnings in the labour
market”, according to the report prepared by the Institute of Competitiveness.
While such a policy may help in gearing employment, it is essential to point
out here that even in the MGNREGA, there is a lot of disparity as States pay
different wages to beneficiaries.
Undeniably, the need for a national minimum
wage in the country, which has been aired time and again, is an essential
necessity. But there have been no efforts in enforcing such a wage policy. There
is need for the government to formulate and enforce a minimum wage across the country
to minimise labour exploitation at a time when prices of petrol, diesel and
other essentials keep rising.
In the last Parliament session, RJD Rajya Sabha
member Manoj Jha, raised the issue of revising the minimum wage and referred to
the expert committee headed by labour economist, Anoop Satpathy. The 2018 report
had recommended fixing the need-based national minimum wage for India at Rs 375
per day or Rs 9,750 per month. Plus, it recommended introduction of an
additional house rent allowance (city compensatory allowance) for urban workers
over and above the National Minimum Wage.
Regrettably, the Centre did not act on the
reportand instead announced formation of another expert group for consideration
of minimum wage. The Satpathycommittee had worked out an evidence based formula
of a balanced diet of 2400 calories, 50 grams of protein and 30 grams of fat
per day per person. It had added some expenditure towards clothing, education
and housing and multiplied the cost by 3.6 to include the spouse, two children
and elderly parents. Currently, the minimum wage notified by most of the States
is Rs 200-oddper day.
Every year, the Centre notifies a National
Minimum Floor Level Wage too that is not binding on States. The last floor
level wage, notified in July 2017 was Rs 176. Under the Code on Wages passed by
Parliament in August 2019, the Centre can notify a national floor wage on the
basis of its assessment of the minimum living standards. No State can prescribe
a minimum wage below this floor wage. But the rules are yet to be framed and
the floor wage is yet to be notified.
Meanwhile, the Centre increased wage rates
under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) by 5
to 7%, but the revised accounts still fall short of the minimum wages that had
been notified by the States for similar unskilled work. Sikkim has the highest
daily payment of Rs 333 under the MGNREGA for 2022-23. But MGNREGA workers in
Madhya Pradesh and Chhattisgarh will receive a daily wage of Rs 204, the lowest
among States, up from Rs 198, while workers in West Bengal will get Rs 223 for
a day’s work, a hike of Rs 10.
The amount varies, based on difficulty of
terrain and working conditions. Nikhil Dey of Mazdoor Kisan Shakti Sangathan in
Rajasthan said the minimum NREGA wages remaining lower than the States’ payouts
amounted to denial of basic standards of living to those opting for the
national job scheme. Though an expert committee under Mahendra Dev had in 2014
recommended that MGNREGA rates cannot be lower than the States’ minimum wage
for agricultural workers, the Centre is not implementing the report.
And though the Centre has increased wage
rates, according to official data of Rural Development Ministry, there is a
negative balance of Rs 15,190 crore on March 23 this year, which may increase
to around Rs 15,500 crore by 2021-22 end. With reduced budgetary allocation,
work under the scheme may not be possible for over nine months or so. This at a
time when unemployment in urban areas in the 15 year and above age group showed
9.8% in July-September quarter of 2021, moderating from the double digit in the
previous three month period (12.6%) though, however, a later figure revealed
that it was around 7.6% in March.A section of analystsattribute this to the
fact that poor people in rural and semi urban areas cannot afford to remain
unemployed for long as a result of which they are taking up any job that comes
their way.
These aspects are very important, one of wage
rates and the other of employment generation. Both are crucial for
upgradation of livelihoods but sadlyboth Centre and most States are not serious.
The latest CMIE figures suggest an unemployment rate at 8.1% with 53 million
people without jobs. The unemployment rate peaked to 11.84% in May 2021, while
it hovered to just around 4% in 2013-14 when Dr Manmohan Singh relinquished
office.
Though the Code on Wages, Industrial
Relations Code, Social Security Code and the Occupational Safety, Health and
Working Conditions Code, which replace 29 labour laws were adopted, these are
yet to be implemented. Also setting up National Social Security Fund to cover
over 38 crore informal workers and improve the case of doing business is among
the top agenda for the Labour Ministry.
While the government claims it is doing all
it can to ensure better wages and working conditions for the labour class, the
Opposition hits out saying that “Modi is doing everything for his capitalist
friends; they are earning Rs 1000 crore daily. But he is not interested in
creating jobs because he knows he can win by misleading people on emotive
issues”. Even the corporate social responsibility (CSR) has not been quite effective
and has neither helped in creation of jobs nor helped in development of social
infrastructure, that is, in the realm of education and health.
While we talk of economic growth, there is
need for formulating a policy based on wages and employment. The current
situation has seen a thrust of our politicians and planners geared towards
increasing incomes of the business class and the rich. In pursuing this policy,
instead of effective public-private participation, the policy followed by the
government is to play into the hands of the private sector by handing them over
profitable public sector units.
Understanding of developmental economics is
vital for formulating a policy for increasing wages and employment that
obviously benefits the lowest segments of society. Unfortunately, the policy
makers have for years been either ignorant or prefer to remain indifferent to
the needs and demands of the masses, which primarily includes better livelihood
opportunities.
Thus there is a need for a genuine transformation
that would witness proper wages and adequate employment opportunities for the
working class. Though the economy has been steadily recovering, a change would
mean steady increase in wages commensurate with price increase and slow but
steady rise in employment.---INFA
(Copyright, India
News & Feature Alliance)
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