An expert committee appointed by the government has recommended doubling the national minimum wage from the current Rs 4,576 a month to Rs 9,750 a month, or Rs 375 per day.
“On the basis of the aforesaid approach, the report has recommended to fix the need based national minimum wage for India at Rs 375 per day (or Rs 9,750 per month) as of July 2018, irrespective of sectors, skills, occupations and rural-urban locations for a family comprising of 3.6 consumption unit,” the committee said.
The report titled “Determining the Methodology for Fixation of the National Minimum Wage” was drafted by the committee under the Chairmanship Dr Anoop Satpathy, Fellow, V. V. Giri National Labour Institute (VVGNLI).
The committee was appointed on 17 January 2017 to review and recommend a methodology for fixation of National Minimum Wage (NMW).
According to the committee, the new minimum wage proposal also includes reasonable expenditure on ‘essential non-food items’, such as clothing, fuel and light, house rent, education, medical expenses, footwear and transport
“It has also recommended to introduce an additional house rent allowance (city compensatory allowance), averaging up to Rs 55 per day i.e., Rs 1,430 per month for urban workers over and above the NMW,” the committee added.
More Money To Buy Essential Items
This increase in minimum wage is expected to bring down the proportion of income needed to buy a basket of food items that cover basic nutritional needs.
The basket comprising milk, bread, rice, eggs, cheese, poultry and beef, fruits and vegetables, costs an estimated Rs 3,527.93 in India. That’s 61.2 per cent of a net minimum wage of Rs 5,760 (the gross being Rs 6,678 since 1 April 2018).
Currently, India ranks fiftieth among 52 countries concerning such expenditure. Only Philippines and Nigeria perform worse.
Also Read: Why Minimum Wage Is Bad For The Poor As Well As The Economy
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