Report on Determining Methodology for Fixing National Minimum Wage

The expert committee under the Chairmanship Dr Anoop Satpathy has submitted its report on “Determining the Methodology for Fixation of the National Minimum Wage to the Government of India. The Expert committee was asked to examine and review the norms and methodology for fixation of the national minimum wage and determine the base level National minimum wage/wages through an evidence-based approach.

Recommendations of the Committee

The committee has made the following recommendations:

• Keeping in mind the nutritional requirement norms as recommended by the Indian Council of Medical Research (ICMR), the committee recommends that food items amounting to the level of ± 10 per cent of 2,400 calories, along with proteins ≥ 50 gm and fats ≥ 30 gm per day per person to constitute a national level balanced food basket.
• The report also recommends for the inclusion of reasonable expenditure on ‘essential non-food items’, such as clothing, fuel and light, house rent, education, medical expenses, footwear and transport, which must be equal to the median class and expenditure on any ‘other non-food items under the minimum wages.
• The committee recommends fixing the need-based national minimum wage for India at INR 375 per day (or INR 9,750 per month) irrespective of sectors, skills, occupations and rural-urban locations for a family comprising of 3.6 consumption unit.
• The committee also recommends introducing an additional house rent allowance (city compensatory allowance), averaging up to INR 55 per day i.e., INR 1,430 per month for urban workers over and above the minimum wage.
• The report has also estimated and recommended different national minimum wages for different geographical regions of the country to suit the local realities and as per socio-economic and labour market contexts as shown below

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• The committee also recommends reviewing the consumption basket every five years, subject to the availability of NSSO-CES data, and – within the period of 5 years – revising and updating the basic minimum wage at least in line with the consumer price index (CPI) every six months, to reflect changes in the cost of living.

The committee using scientific approach has updated the methodological framework of fixation of minimum wages based on the overall guidelines of the ILC 1957 and the Supreme Court Judgment in the case of Workmen v Reptakos Brett & Co. in 1992.

Month: Current Affairs - February, 2019