Economic survey for a well-designed salary system for inclusive growth

New Delhi, July 4 () India must have a well-designed minimum wage system that reduces wage inequality, alleviates poverty and generates inclusive growth, especially at lower levels, according to the Economic Survey 2018-19.

According to the survey presented in Parliament on Thursday, in the last 70 years, the minimum wage system in India has expanded and has become complex. The first set of complexities arises from issues related to its coverage.

A well-designed minimum wage system can be a powerful tool to protect workers and alleviate poverty, if it is set at an adequate level to guarantee compliance. International experience has shown that relatively simple systems are more effective and generally complex systems are the least effective. the indicated document.

The well-designed salary system would eliminate wage inequality, especially at the lower levels and among women who make up the majority of the lowest rungs of the wage distribution.

Today, there are almost 429 scheduled jobs and 1,915 job categories scheduled for unskilled workers. This massive expansion in the categories of jobs and wage rates has led to great variations not only in the states but also within the states.

The survey indicated that one out of every three salaried workers in India is not protected by the minimum wage law.

He suggested that minimum wages should be fixed for four categories, namely, unskilled, semi-skilled, qualified and highly qualified according to the geographical region and should cover all workers, regardless of salary caps.

According to the document, a simple, coherent and enforceable minimum wage system must be designed with the help of technology, since minimum wages increase wages and reduce wage inequality without significantly affecting employment.

An effective minimum wage policy is a potential tool not only for the protection of low-wage workers, but also as an inclusive mechanism for more resilient and sustainable economic development.

The document submitted for the Salaries Law Code, which was approved by the Cabinet of the Union on Wednesday for its introduction and approval in Parliament. The government intends to push the bill for approval at the current session of the Parliament.

The survey said that the rationalization of minimum wages, as proposed in the Wage Law Code, should be supported.

This code combines the Minimum Wage Act of 1948, the Payment of Salaries Act of 1936, the Payment of Bonuses Act of 1965 and the Equal Pay Act of 1976 into a single law.

He suggested that the definition of salary in the new legislation should subsume the current situation of 12 different wage definitions in different labor laws.

He also said that the central government should notify a national minimum wage that can vary widely in five geographic regions. Thereafter, states can set their minimum wage at levels not lower than the minimum wage.

This would bring some uniformity in minimum wages throughout the country and would make all states almost equally attractive from the point of view of the labor cost of the investment, as well as the reduction of relief migration.

He said that the Labor Bill Law Code should consider setting minimum wages based on any of the two factors: the category of qualified, that is, unskilled, semi-skilled, qualified and highly qualified personnel, and the geographical region , or both, since this key change substantially reduce the number of minimum wages in the country.

The proposed Wage Law Code should extend the applicability of minimum wages to all jobs/workers in all sectors and should cover both organized and unorganized sectors, he said.

The survey also said that a mechanism should be developed to adjust minimum wages regularly and more frequently.

A control panel can be created at the national level in the Center with access to state governments, through which states can periodically update minimum wage notifications.

This portal should be available in the Common Service Centers (CSCs), rural haats, etc., with the required coverage of the mass media so that workers are well informed about their negotiation skills and the power of taking of decisions will be strengthened, he said.

There should be an easy-to-remember free number to file a complaint for nonpayment of the legal minimum wage. Badly paid workers should be widely publicized in a forum to express their complaint, he added. KKS