Economic Survey Recommends Single Code Across Country For Fixing Minimum Wages

The Economic Survey of India for the financial year 2018-19, which was tabled in Parliament on Thursday, has recommended the amalgamation of four separate wage acts prevalent in the country in order to achieve the goal of inclusive growth.

The measure is among a set of recommendations suggested by the finance ministry for redesigning of the minimum wage system in India.

The report was tabled in Parliament by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman a day ahead of the Union Budget, which is scheduled to be presented on July 5.

As per the report, the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 should be amalgamated into a single piece of legislation. This calls for rationalisation of minimum wages as proposed under the Code on Wages Bill which amalgamates all four acts.

"The definition of 'wage' in the new legislation should subsume the present situation of 12 different definitions of wages in different Labour Acts," states the report.

In addition to this, the report has also highlighted a set of policy recommendations for an effective design of the minimum wages system in the country. The report has recommended the Central government to notify a "national floor minimum wage" varying across five broad geographical regions following which states can fix their minimum wages at par or above the threshold.

The criteria for setting minimum wage should be based on either the skilled category, that is, the level of skills, the geographical region or on a combination of both factors, says the report.

It also stresses upon the need to extend applicability of minimum wages to the organised as well as the unorganised sectors. The report has suggested the development of a mechanism to adjust minimum wages regularly which would be equally applicable to all states through a national-level dashboard.

Lastly, a grievance redressal mechanism has also been suggested - in the form of a toll-free number - to report non-payment of statutory minimum wages to the government.