ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Need for Minimum Wage


In January 2019, the “Expert Committee on Determining the Methodology for Fixing the National Minimum Wages” chaired by Anoop K Satpathy (henceforth the Satpathy Committee) recommended a minimum wage for the labourers in India. Using the consumption expenditure and employment data, the committee suggested `375 per day and a monthly wage of `9,750 as a national floor-level minimum wage, with certain variations based on region. This allows workers to have a balanced diet, and meet the
expenditure of other essential non-food consumption. However, the recommendations made by the committee did not receive the deserved attention of the government. Against the recommendation of the Satpathy Committee, the central government, in that particular year, claimed to hike the minimum wage rate by a meagre `2 from `176 to `178. In addition, the government has formed yet another committee on 3 June 2021, chaired by Ajit Mishra “to provide technical inputs and recommendations on fixation of Minimum Wages and National Floor Minimum Wages.”

This decision of the formation of another committee, and ignoring the recommendation of the earlier Satpathy Committee is bewildering. The specific rationale and the expected value addition that the new committee is likely to make is questionable, especially during the ongoing economic crisis. It is also worrisome to learn that the Mishra Committee has been given up to June 2024 to submit its report—a full three years from now. It is surprising to see the formation of a new committee for fixing the minimum wage when the recommendations of the Satpathy Committee are already at its disposal. The rationale for delaying the fixation of the minimum wages is incomprehensible, more so when one considers that it comes at a time of severe labour distress in the economy. This indicates the lackadaisical approach of the union government towards implementing the minimum wage to protect the workers, especially in the informal sector that constitutes around 90% of the total workforce in India.

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