CoS to Take up Minimum Wage Bill for Approval

A committee of secretaries will take up for approval on Friday a bill to amend the Minimum Wages Act that aims to raise wages of workers in tandem with the retail inflation rate every year and enhance penal provisions for erring companies, a senior official said on Wednesday.

“Once the CoS clears the bill, it will be sent for cabinet approval,” the official told FE. Though the labour ministry wanted the bill to be introduced in the ongoing monsoon session, it seems it would be now taken up in the the winter session of Parliament. The minimum wages act was amended four times since 1995-96, but annual increments have failed to keep pace with the rising prices of essential items.

In April 2011, the government raised the minimum wage of industrial workers to R115 a day from the earlier R100. It was R80 a day between 2007 and March 2011. While the government has linked rural wages under the Mahatma Gandhi National Rural Employment Guarantee (NREGA) scheme to inflation, industrial workers are at loss because they have to depend on the whims and wishes of companies for their annual increment.

As such, industrial slowdown in the past one year has already dented corporate profits and prompted employers to freeze wages or offer moderate hikes even as the CPI-IW shows an annual rise of over 10% in recent months. In fact, there is a rising trend of companies violating the provisions of Minimum Wages Act.

According to latest data available with labour ministry, the number of inspection conducted by government officials on companies increased to 16,780 in 2010-11 from 14,720 in 2009-10, while the number of prosecution rose to 5,950 from 4,382 during the same period. The number of persons convicted for violating the Act was 4,459 during 2010-11 as compared with 3,415 in the previous year. The rising trend in denying workers even the minimum wages especially in the unorganised sector prompted the government to enhance the penal provision in the proposed bill, the official said.

Financial Express, New Delhi, 23-08-2012