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The concept of minimum wage in India is a complex issue given the country’s vastness and diverse socio-economic conditions. In a labour surplus market, labour without any bargaining strength offers its services at abysmally low wages and thereby, becomes an easy prey to exploitation. It is in this context that the term ‘Minimum Wage’ is widely viewed as a kind of minimum protective wage assured through government intervention in order to prevent exploitation of workers.
The Minimum Wages Act, 1948 was enacted during early period of independence for which a bill was prepared and discussed at the 7th session of the Indian Labour Conference held in November 1945 and introduced in the Central Legislative Assembly on 11th April, 1946.
Under the provisions of Minimum Wages Act, 1948, both the Central and State Governments are appropriate governments to fix/review at such intervals not exceeding two years and raise the minimum rates of wages of the workers employed in the scheduled employments under their respective jurisdiction. There are two parts of the Schedule of Employments. Part I has non-agricultural employments whereas Part II has employments in agriculture including the crop farming, raising of livestock, bees or poultry and any practice performed by a farmer as incidental to or in conjunction with farm operations including forestry and timber operations. The Act generally covers only those scheduled employment, where the working strength is 1000 or more at any time in the jurisdictions of the appropriate governments. Presently, there are 45 scheduled employments in the Central Sphere while in the State Sphere the number of such employments is as many as 1447.
The Act also provides for fixation of minimum rates of wages for different classes of work in the scheduled employment i.e. for adults, adolescents, children and apprentices and for different localities. The Minimum Wages Act, however, does not provide for any discrimination between male and female workers for determining minimum wages for them. All the provisions of the Act equally apply to both male and female workers.
It was recommended in the India Labour Conference to evolve a mechanism to protect the minimum wages against inflation by linking it to the consumer price index. Accordingly, the special allowance termed as Variable Dearness Allowance (VDA) is linked to Consumer Price Index Number and is reviewed twice a year effective from April and October. Thus the Minimum Wage for a Scheduled employment plus VDA component would become as authorised wage under the Act. The Central Government and 24 States/Union Territories have adopted the VDA as a component of minimum wages.
Section 10 of the Act provides for payment of wages in cash. However, if it has been the custom to pay wages wholly or partly in kind, the appropriate government may authorize the payment of minimum wages either wholly or partly in kind and the provision of supply of essential commodities at concessional rates. In such cases, the appropriate Government may prescribe the manner of determining the cash value of wages in kind and of concessions for supplies of essential commodities at concessional rates.
The Act has also provisions that prohibits employers from paying wages not less than the minimum wage and stipulate 9 hours of work per day with provision for interval for rest and a rest day after a week. The Act also provides for grant of overtime for work over and above 9 hours a day at the rate of one and a half times the normal wage in agriculture and double the ordinary rate in other scheduled employments.
In the Central sphere, the enforcement is secured through the officers of the Central Industrial Relations Machinery (CIRM), the compliance in the State sphere is ensured through the State enforcement machinery. The officers of these machinaries are appointed as Inspectors under the provisions of the Act. They conduct regular inspections and in the event of detection of any case of non-payment of minimum wages, they advises the employers to make payment of the shortfall of wages. In case of non-compliance of advices of inspectors, there are the provisions of prosecutions also in the Act against the defaulting employers.
The Act does not mention any criteria for fixing or revising the minimum wages. However, the Indian Labour Conference in its 15th session held in 1957, recommended following norms to be considered while fixing/revising minimum wages:-
3 consumption units for one earner.
Minimum food requirements of 2700 calories per average Indian adult.
Clothing requirements of 72 yards per annum per family.
Rent corresponding to the minimum area provided for under Government’s industrial Housing Scheme.
Fuel, lighting and other miscellaneous items of expenditure to constitute 20% of the total minimum wage.
Other parameters.
Further to ensure a uniform minimum wage structure and to reduce the disparity in minimum wages across the country, a term ‘National Floor Level Minimum Wage’ was propounded by National Commission on Rural Labour (NCRL) in 1991. Keeping in view this recommendation and subsequent rises in price indices, the Centre fixed the National Floor Level Minimum Wage at Rs. 35/- per day in 1996. Since then the Central Government has periodically raised the national floor level minimum wage to Rs. 40/- per day in 1998 and further to Rs. 45/- from 01.12.1999 and Rs. 50/- per day from 1.9.2002 keeping in view the rise in consumer price index.
The Working Group set up under the Minimum Wages Act, 1948 by the Central Advisory Board in 2003 recommended the revised norms for fixation of minimum wage. Based on the norms suggested by the Working Group and its acceptance by the Central Advisory Board subsequently in its meeting held on 19.12.2003, national minimum wage has last been revised upwards to Rs. 66/- per day with effect from 1.02.2004. Since the implementation of National Floor Level Minimum Wage is a non-statutory measure, all the States/Union Territories have been impressed upon to ensure that in none of the scheduled employments the minimum wages we fixed below the national floor level minimum wage so revised from time to time.
MLD:LK:L-175(Labourlaws)(7.4.05)
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