Economic Survey 2019 big ideas: Rationalise minimum wages architecture

2 min read
  1. According to the Economic Survey 2019,India needs to have a mandatory national-level minimum wage to promote social justice and curb distress migration.
  2. At present,minimum wages are fixed on the basis of the skill level, geographical areas,nature of work.This has led to a proliferation of minimum wages making enforcement a challenging task.
  3. The Survey’s recommendations are in line with the revised wage code bill which says fixing minimum wages based on either the level of skill or the geographical region or both.
  4. This simplification in the structure is expected to bring down the number of minimum wages to 300 from about 2,500 wage rates that exist today.
  5. Under this architecture,the Centre would notify a national floor minimum wage that could vary across the five geographical regions identified in the survey.This would serve as a floor wage.States have the option of fixing the wages at higher levels.
  6. Further,these wages would be regularly adjusted presumably by the state-wise consumer price index for industrial workers.The wage should also be extended to all sectors of the economy covering both the formal and the informal sector.