Union Finance and Corporate Affairs Minister Nirmala Sitharaman. (Courtesy: LS TV)
Union Finance and Corporate Affairs Minister Nirmala Sitharaman. (Courtesy: LS TV)

Effective minimum wage policy can spur sustainable, inclusive growth: Economic Survey

ANI | Updated: Jul 04, 2019 17:03 IST

New Delhi [India], July 4 (ANI): A well-designed and effective implementation of minimum wages will strengthen the trend towards decreasing wage inequality, especially at lower levels, says the Economic Survey 2018-19, which Minister for Finance and Corporate Affairs Nirmala Sitharaman tabled in Parliament on Thursday.
"This becomes all the more significant as women constitute the majority of the bottom rungs of the wage distribution," added she.
A separate -- "Redesigning a Minimum Wage System in India for Inclusive Growth" -- has been included in the survey to discuss the issue of the minimum wage system in India.
"An effective minimum wage policy that targets the vulnerable bottom rung of wage earners can help in driving up aggregate demand and building and strengthening the middle class, and thus spur a phase of sustainable and inclusive growth," says the Survey.
The survey proposes that the Central government should notify a 'national floor minimum wage' that can vary broadly across five geographical regions.
Thereafter, states can fix their minimum wages at levels not lower than the "floor wage" which could bring uniformity in minimum wages across country and make all states almost equally attractive from the point of view of labour cost for investment as well as reduce distress migration.
The Economic Survey also proposes amalgamation of Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 into a single piece of legislation into a proposed single piece of legislation- the Code on Wages Bill.
A suggestion on The Code on Wages Bill to consider fixing minimum wages based on either on the skilled category, i.e., unskilled, semi-skilled, skilled and highly skilled or the geographical region or both of the above factors has also been included in the Survey.
The Survey adds: "The national level dashboard should be made available to Common Service Centres (CSCs), Rural Haats, etc., with the required mass media coverage so that the workers are well-informed of their bargaining skills and their decision-making power are strengthened."
A suggestion has also been provided by the Economic Survey 2018-19 on providing an easy to remember the toll-free number, which should be widely publicised to provide low-paid workers with a forum to voice their grievances. (ANI)