Haryana becomes best paymaster

Increases minimum wages in private sector by 40 per cent

The Congress government in Haryana last month increased minimum wages in the private sector by a whopping 40 per cent.

The wage floor has been revised from Rs 2,486 to Rs 3,510 per month, making Haryana the state paying the highest minimum wages in the country.

The state government plans to use this increase as a centrepiece in its election campaign, in tune with the UPA's 'aam aadmi' theme.

Haryana Labour Commissioner N C Wadhwa said, "We have acted as per the recommendations of the advisory board concerned. It is obligatory to revise the rates every five years. The last revision was done in 2003."

To justify the 40 per cent hike, Wadhwa cited reasons such as cost of living index and overall change in the economic scenario. "Sometimes market prices increase just after six months. But here, nothing has changed for the last four years," he added.

The decision to increase minimum wages has been made effective from July 1, 2007 and is expected to benefit at least 40,000 labourers.

The Labour Welfare Board recently also announced financial assistance to the tune of Rs 20,000 for widows of labourers. They will also be given Rs 5,100 for their daughters' marriage. The scheme would be applicable to up to two daughters.

However, the decision to increase the wages has not received praises in certain sectors of the industry. House of Pearls, a major garment exporter, has put off its expansion plans in Gurgaon and other areas of Haryana and announced it will shift to Chennai, Bangladesh and Indonesia.

The company's CFO Rishi Vig said, "We can understand a gradual increase. But an abrupt hike like this will affect the bottomlines of companies in this age of cut-throat competition. The government's decision is more political in nature than economic."

Vig indicated that the textile industry, which is labour-intensive and most affected by the decision, may move court against the government.