Centre's labour sops suggest sweeping changes to wages, benefits

With the trend set by Kejriwal in Delhi and Tuesday's move by the central government, the scale of rise is expected for labour to be swifter from now

Labour minister Bandaru Dattatreya and labour secretary Shankar Agarwal had made a presentation to Prime Minister Narendra Modi on Monday evening about the wage package being offered to workers in the unorganized sector. The key point they emphasised was that the revision in minimum wage for unskilled workers from Rs 246 per day to Rs 350 per day is a 43% rise compared with the 18% rise the government has offered its employees. It is the largest ever jump in wokrers’ wages made by the central government. In the past one year for instance (March 2015 to March 2016), the wages for such workers had risen by only 5.56%.

 
The presentation to Modi followed a meeting of the Minimum Wage Advisory Board where some of the members asked for an even higher hike. The differences continued into Tuesday with the numbers finally approved by the Board just hours before the formal announcement. 
 
Minimum wages for the nearly 400 million workers in the unorganised sector in India are determined at periodic intervals by the state or the central government. If they are employed at a place which is owned by the central government like the railways or at airports or in the postal department, the wages set on Tuesday by Dattatreya will be applicable to them.

 

There are 45 such categories under which about 10 million persons are employed. For every other trade, the rates are set by the concerned state governments, and are typically lower than the ones set by the Centre. The Delhi state government, though, has bucked the trend, raising it to Rs 468.4 this month.  
 
After Tuesday’s orders, the corresponding daily wage for the top level skilled workers like masons would move up to Rs 598 per day. With the trend set by Kejriwal in Delhi and Tuesday’s follow through by the central government, the scale of rise is expected to be swifter from now. In any case the states will have to notify a corresponding scale of changes in the wage rates soon. It could also precipitate a demand for changes in the daily wage rates in state owned companies. Under the law, except for those set up by an act of Parliament like Air India, the others are free to determine their own rates but usually copy the central government pattern.

 
However the more significant impact of the package is the plan to offer health and safety net facilities to the local level workers in social safety programmes like ASHA, Anganwadi and midday meal. None of them are treated as employees of the central government; their monthly pay is treated as an honorarium. From now they too will be enrolled as members of the labour ministry run Employees State Insurance Corporation and in the Employees Provident Fund. This means they can get treatment in the hospitals and medical centres run by ESIC and get a pension. An inter-ministerial committee with representatives from health, education, rural development and finance will work on how to offer these benefits to about these 5 million people.

 
In the case of contract workers it was pointed out that Tuesday's decision will not impact placement agencies. But all agencies providing contract workers to any office will have to obtain licenses to continue to provide workers. The license rule will kick in if they provide 20 or more workers.