A mandatory national minimum wage increase may be on the horizon, with the Central government considering adopting recommendations from a high-level expert panel, as reported by The Economic Times. Officials are anticipating the enforcement of the recommended floor wage, set by an expert committee led by SP Mukherjee, an economist and statistician, since 2021, possibly before the upcoming general elections scheduled for April-May this year.
A revision has been long overdue and necessary too to address the rising cost of living and inflation. Furthermore, the Committee, established for a three-year term until June 2024, is close to submitting its report, according to sources.
The current floor wage, last revised in 2017 and standing at Rs 176 per day, is applicable to approximately 500 million workers, with 90 per cent in the unorganised sector. If implemented, the proposed new minimum wage would be made mandatory across states. It would be authorised by the Code on Wages, 2019, which grants the Central government the authority to establish the floor wage based on a worker’s minimum living standards.
In 2019, a Committee led by Anoop Satpathy, a wage specialist, suggested a higher floor wage of Rs 375 per day, a proposal rejected by the government due to significant financial implications for employers. Stakeholders are optimistic that the current committee will strike a balance between the existing Rs 176 per day and the previous Rs 375 per day recommendation.
The committee is likely to consider factors such as inflation and household expenditure costs in determining the new floor wage, considering both nutritional and non-food requirements. Currently, some states have set their daily wage floor lower than Rs 176, while others have a higher rate, leading to disparities in minimum wages and affecting the mobility of migrant labourers within the country.
