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Government’s Rs 10K minimum wage plan for contract workers put on hold

While labour ministry officials said the intention is to provide a widespread coverage for minimum wage for all types of workers, industry groups called for a gradual increase in the minimum wage.

By: ENS Economic Bureau | Abuja/ New Delhi,, New Delhi | Published: July 22, 2016 2:11:40 am
stock market, Sify Technologies, net prfit sify, net profit sify technologies, market, trade market, stock exchange, business news, latest news, market news, India news, national news, news, revenue Sify In April, labour minister Bandaru Dattatreya had told Rajya Sabha about government’s decision to set the minimum wage of Rs 10,000 per month for contract workers.

After facing stiff opposition from industry groups, the government has decided to hold back its plan to set the minimum wage for contract workers at Rs 10,000 per month.

While labour ministry officials said the intention is to provide a widespread coverage for minimum wage for all types of workers, industry groups called for a gradual increase in the minimum wage.

“We want to provide nationwide coverage for the minimum wage proposal. Minimum wage should be for all workers, not only permanent workers. The minimum wage for contract workers under Rule 25 should be at par with minimum wage prevalent elsewhere in the country, say the wage for a Class IV government employee. But, there are legal implications to it, so we are looking into the matter,” a senior labour ministry official said. Industry groups expressed relief over the government’s move to put their decision to set the minimum wage for contract workers on hold, even though they denied being totally against the decision to set the minimum wage.

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“The industry is not against the decision to set the minimum wage for contract workers per se, but the government should provide proper rationale behind setting the monthly minimum wage at Rs 10,000. We had met the labour ministry officials and expressed concern over the arbitrary nature of the decision. The hike should be gradual and done after detailed discussion with all stakeholders,” a Confederation of Indian Industry (CII) official said, refusing to be quoted on the matter. States where the minimum wage for contract workers is already high around Rs 11,000 may not oppose the government’s decision, but for other states where the monthly minimum wage is between the range of Rs 3,500-4,000, it’s a quantum leap, which in turn hurts the industry as well, the official added.

In April, labour minister Bandaru Dattatreya had told Rajya Sabha about government’s decision to set the minimum wage of Rs 10,000 per month for contract workers. The government had issued a draft notification amending Rule 25(2) (iv) of the Contract Labour (Regulation & Abolition) Central Rules, 1971 to ensure minimum monthly wage of Rs 10,000 for contract workers in the establishments that employ twenty or more workmen on any day of the preceding twelve months. The trade unions had, however, demanded minimum wage for contract workers to be fixed at Rs 15,000-18,000 per month. The minimum wages for the contract workers are revised twice in a year-in April and October by adding variable dearness allowance in the basic rate.

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