INDIA WAGE REPORT

Findings:

• Informal economy: The Indian labour market is characterized by high levels of informality. Of the total employed in 2011–12, 51 % were self-employed, and of the 195 million wage earners, 62 % were employed as casual workers.
  
  
• Average wage:
  • Average daily wages almost doubled between 1993–94 and 2011–12, increasing more rapidly for casual than for regular workers and for women than for men.
    
    
  • But low pay remains pervasive. In 2011–12, the average wage in India was about 247 rupees (INR) per day.
    
    
  
  
  
• Wage inequality:
  • Although overall wage inequality in India has declined since 2004–05, wage inequality remains very high with the Gini coefficient for wages being 0.49.
    
    
  • Regional disparities in average wages have increased over time; wages rose more rapidly in high-wage states than in low-wage ones.
    
    
  • The gender wage gap also remains very high by international standards, although it declined from 48 % in 1993–94 to 34 % in 2011–12. This gender wage gap can be observed among all types of workers: regular and casual, urban and rural.
    
    
  
  
  
• Labour share:
  • India’s labour share has declined from 38.5 % in 1981 to 35.4 % in 2013 because average labour productivity (as measured by GDP per worker) has increased more rapidly than real average wages.
    
    
  • Labour share refers to the proportion of national income which goes into labour compensation, as opposed to capital or landowners.
    
    
  
  
  

Recommendations:

• Recommendations for improving the current minimum wage system:
  • Extend legal coverage to all workers in an employment relationship,
    
    
  • Consolidate and Simplify minimum wage structures,
    
    
  • Take stronger measures for effective application of minimum wage law,
    
    
  • Collect statistical data on regular basis.
    
    
  
  
  
• Recommendations for achieving decent work and inclusive growth:
  • Skill development to boost labour productivity and growth for sustainable enterprises,
    
    
  • Promote equal pay for work of equal value,
    
    
  • Formalize the informal economy and
    
    
  • Strengthen social protection for workers.