The minimum wage for unskilled workers in the capital will increase from Rs 9,568 to Rs 14,000.
This Independence Day, Delhi Chief Minister Arvind Kejriwal announced that the minimum wages in Delhi will go up by about 50 per cent even as he urged Prime Minister Narendra Modi to implement this throughout the country.
According to his announcement, the minimum wage for unskilled workers in the country’s capital will increase from Rs 9,568 to Rs 14,000. For semi-skilled workers it will go up from Rs 10,600 to Rs 15,600 and for skilled workers from Rs 11,600 to Rs 17,000.
As a part of his speech at the Chhatrasal Stadium on India’s 70th Independence Day in Delhi, Kejriwal said, “Those who have less in life should have more in law. So we have decided to increase minimum wages in Delhi by about 50 per cent.”
“The gap between the rich and the poor increased due to the way previous governments functioned. The rich got richer and the poor became poorer. Now it is our government’s responsibility to improve the lot of the poor through policies like this” he added.
The Delhi CM expects this move to not only improve the living conditions of workers in the capital but also to boost the economy on the whole. He also requests other states to go in for similar reforms.
Vinod Rai, head HR (supply chain & vendors), HR transformation leader, ?Maruti Suzuki India says, “The decision to increase minimum wage by 50 per cent may come as a challenge for some industries at present but may also prove beneficial in the long run. The demand and supply of workers affects organisations and their costs as the supply of labour in India has always exceeded the demand. That is why companies have been able to control worker costs significantly. This is also one of the biggest reasons for the existence of rigid labour unions and conflicts between the unions and the management on issues concerning wages. If you look at the government’s decision for wage hike with a futuristic lens, it will only result in worker satisfaction, better living conditions and lesser conflicts in the long run.”
However, the industry had a different view on the same. Federation of Indian Chamber of Commerce and Industry had earlier written to Delhi Labour Minister, Gopal Rai, saying that a 30–40 per cent hike in minimum wages may lead to shifting of several industries from the national capital to neighbouring states. The industry body also argued that the proposed hike in minimum wages will ‘severely hurt’ the growth of micro and small enterprises in the national capital, and hence, the AAP government should reconsider this proposal.
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50% increase in minimum wages is a welcome step . The government before issuing notification should also look into the implementation part as it is very diccficult to implement increase in minimum wages in ongoing contarct. Most of the contarcts do not have a clause that takes care of change in labour laws and as most contarcts are awarded for 2 to 3 years on fixed rates , a steep hike in minimum wages in the midst of the contarct makes it difficult to execute the contract.Thus it is suggested that some clause for smooth implementation for incraese in minimum wagesshould also be suggested .
I fully agree with Vinod Tai that increase in minimum wage would increase labour productivity due to greater worker satisfaction. It has been worked out earlier that Rs 15,000 is in fact what the need-based minimum wage should be at present, based on the definition provided by the 15th Indian Labour Conference (1957) and the subsequent additions in this component made by the Supreme Court in 1991.
Regarding the comment made by FICCI I’d say that it is a fallacy to put forth the view that increase in wages will increase costs. In fact increase in labour productivity will off-set the costs. Our industry should reexamine its current views.
ASK SMALL INDUSTRY PEOPLE of DELHI….
IT is a CRUSHING STEP for this sector of Industry reeling towards closures.
OWNERS of SMALLL INDUSTRIES are just not in a position to pay existing wages because of LACK OF BUSINESS – High competition with from HOME WORKING unis , material prices going up & finished goods prices going down. Chinese products in market already had crippled this industry and now with LOW PRODUCTIVITY of our LABOUR & that high wages – mostly this class will be forced to close down. Govt. has wisdom only in VOTE BANK and is really not interested in SELF EMPLOYED SMALL INDUSTRIES .
I want to know that when will the order be issued officially that was announced by CM Arvind Kejriwal “50% increment in minimum labour wages”