Expert Committee under the Chairmanship of Dr. Anoop Satpathy submitted its Report on Determining Methodology for Fixing National Minimum Wage.
About:
Background: The Ministry of Labour and Employment had constituted an expert committee in 2017, under the Chairmanship Dr. Anoop Satpathy, Fellow, V. V. Giri National Labour Institute (VVGNLI).
Mandate: To review and recommend methodology for fixation of National Minimum Wage (NMW).
Need of review: There have been several developments since the norms for the fixation of the minimum wages were recommended by the 15th ILC in 1957 and subsequently strengthened by the Supreme Court in the judgement of Workmen v Reptakos Brett & Co. case in 1992.
Report Summary:
Using the nutritional requirement norms as recommended by the Indian Council of Medical Research (ICMR) for Indian population, the report has recommended a balanced diet approach which is culturally palatable for fixation of national minimum wage.
Accordingly, it has proposed 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.
Further, it proposes minimum wage should include 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.
Expenditure on any ‘other non-food items’ be equivalent to the sixth fractile (25-30 per cent) of the household expenditure distribution as per the NSSO-CES 2011/12 survey data.
On the basis of the aforesaid approach, the report has recommended to fix the need based national minimum wage for India at INR 375 per day (or INR 9,750 per month) as of July 2018, irrespective of sectors, skills, occupations and rural-urban locations for a family comprising of 3.6 consumption unit.
It has also recommended to introduce 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 NMW.
The report has also estimated and recommended different national minimum wages for different geographical regions of the country to suit the local realities. For this purpose, it has grouped the states into five regions.
It has also recommended reviewing the consumption basket every five years 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 report will be put before the Central Advisory Board/tripartite bodies for necessary consultations and approval of the methodology.
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