India Wage Report: ILO report

India Wage Report: ILO report

Kamaraj IAS Academy | India Wage Report: ILO report
  • August 22, 2018, 12:53 pm


While India’s economy in the past two decades has seen an annual average GDP rate of 7% – low pay and inequality persist according to the India Wage Report: Wage policies for decent work and inclusive growth.

According to The International Labour Organization Wage Report, the real average daily wages in India almost doubled in the first two decades after economic reforms, but low pay and wage inequality remains a serious challenge to inclusive growth.

Overview of the report

  1. Overall, in 2009-10, a third of all of wage workers were paid less than the national minimum wage, which is merely indicative and not legally binding. That includes 41% of all casual workers and 15% of salaried workers.
  2. In 2011-12, the average wage in India was about 247 rupees a day, almost double the 1993-94 figure of 128. However, average labour productivity (as measured by GDP per worker) increased more rapidly than real average wages.
  3. India’s labour share — or the proportion of national income which goes into labour compensation, as opposed to capital or landowners — has declined.
  4. The rise in average wages was more rapid in rural areas, and for casual workers. However, these groups started at such a low base that a yawning wage gap still remains. Thus, the average wage of casual workers — who make 62% of the earning population — was only 143 a day.
  5. Daily wages in urban areas (384) also remain more than twice as high as those in rural areas (175), the report said. Regional disparities in average wages have actually increased over time, with wages rising more rapidly in high-wage States than in low-wage ones.
  6. The gender wage gap decreased from 48% in 1993-94 to 34% in 2011-12, but still remains high by international standards. And of all worker groups, the average wages of casual rural female workers was the lowest, at just 104 a day.
  7. The ILO also highlighted the lack of timely data as a hindrance, pointing out that its analysis — and the decisions of Indian policy makers — was dependent on 2011-12 data from the Employment and Unemployment Survey (EUS) of the National Sample Survey Office (NSSO), as that was the last year in which the survey was done.

ILO recommendations

The ILO has called for stronger implementation of minimum wage laws and strengthening of the frameworks for collective bargaining by workers. This is essential to combat persistent low pay in some sectors and to bridge the wage gaps between rural and urban, male and female, and regular and casual workers. State-specific and comparative studies on wages are needed, said the ILO, urging collaborative work between government agencies, academic institutions and expert organisations.

What does NSSO says?

The NSSO estimates also indicate that the real average daily wage has doubled between 1993–94 and 2011–12. Wages have seen a faster growth for the most vulnerable categories including workers in rural areas, informal employment, casual workers, female workers and low-paid occupations. Nevertheless, there remain huge disparities.

As per the Employment and Unemployment Survey (EUS) of National Sample Survey Office (NSSO), in 2011–12, the average wage in India was about 247 rupees (INR) per day, and the average wage of casual workers was an estimated INR 143 per day. Only a limited number of regular/salaried workers, mostly in the urban areas, and the highly-skilled professionals earned higher average wages.

Minimum wages act of India

The Minimum Wages At, 1948 seeks to protect the interest of the workers in the sweated industries. Wage fixing authorities have been guided by the norms prescribed by the Fair Wage Committee in the settlement of issues relating to wage fixation in organised industries.

The Fair Wage Committee defined the components of the minimum wage which should be taken into account but did not quantify them. It was the Indian Labour Conference (15th session) which for the first time, moved into this conference in its recommendations not merely provided for the bare physical subsistence but also for the maintenance of health and efficiency of workers.

Some of the relevant points of the resolution are given below:

(i) In calculating the minimum wage, the standard working class family should be taken to consist of 3 consumption units for the one earner, the earnings of women; children and adolescent should be disregarded.

(ii) Minimum food requirements should be calculated on the basis of a net intake of 27,000 calories, as recommended by Dr. Aykreyed for an average Indian adult of moderate activity.

The first enactment specifically to regulate wages in this country is the Minimum Wages Act, 1948. This Act is limited in its operation to the so called sweated industries, in which labour is practically unorganised and working conditions are poor than in organised industry.

Under the Act, the appropriate Government has either to appoint a committee to hold enquiries and to advice it in regard to the fixation of minimum rates of wages, or if it thinks that it has enough material on hand, to publish its proposals for the fixation of wages in the official gazette and to invite objections.

The appropriate Government finally fixes the minimum rates of wages on receipts of the recommendations of the committee. There is also a Provincial Advisory Board in each Province to co-ordinate the work of the various committees.

There is also Central Advisory Board to co-ordinate the work of provincial boards. Complaints of non-payment of the minimum rates of wages fixed by Government may be taken to authorities constituted by the Act. Breaches of the committee of the Act are punishable by criminal courts.

Source: The Hindu and other Authenticated source

Related topics

  • International Labour Organisation
  • Payment of Bonus Act, 1965
  • Payment of Wages Act, 1936
  • Maternity Benefit Act 1961
  • National Commission on Labour