Delhi has become the first government in the country to give the highest hike in minimum wages, following ratification of the cabinet decision by Delhi Lieutenant Governor Anil Baijal on Friday.
The announcement was made by Delhi Chief Minister Arvind Kejriwal along with Labour Minister Gopal Rai.
"This is a first-of-its-kind move in 22 years. Unlike the trickledown theory of economics which has failed miserably, the raise is the first step towards making life easy for the poor," the Chief Minister said.
Approximately 50 lakh families will get benefit from this. The minimum wage hike took place after 22 years. The hike will be implemented from March 6.
The last revision of minimum rates of wages was carried out in the year 1994 i.e. about 22 years back.
Since 1994 till date only Dearness Allowance (D.A.) has been notified/ increased from time to time i.e. twice in a year i.e. April and October. Increase in D.A. is based on rise/ fall in the Consumer Price Index Number.
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There has been a constant demand for wage revision from Trade Unions and workers.
Section 3 (b) of the Minimum Wages Act, 1948 provides that Government to revise Minimum wages on interval of every five years.
Section 5 of Minimum Wages Act, 1948 provides statutory mechanism by way of constituting committee for examining the issue of revision of minimum rates of wages for workers.
Delhi Lieutenant Governor approved the Constitution of minimum wages advisory committee comprising of employers representatives, workers representatives and Govt. representatives which was notified on September 15, 2016.
The said committee convened nine meetings and the last meeting was convened on February 15.
The committee adopted scientific way of revision of minimum wages as enumerated/ laid down by I.L.C. 1957, reptakos judgment in the year 1991, food calorie values as prescribed by National Nutrition Institution, Hyderabad, a body constituted under Indian Council for Medical Research.
For consistency of food items, rates from Kendriya Bhandar for food items and rates from Khadi Gram Udyog for clothing components were adopted.
Two teams (Team-A and Team-B) among the committee members were constituted to carry out market survey for food items, calculations of minimum wages were submitted by employers and workmen representatives separately.
There were huge differences in calculations of both the parties whereas the employers calculated Rs. 8,525/- P.S. for un-skilled category and Trade Unions calculated Rs. 16,200/- P.M. for un-skilled category and therefore, Labour Department worked out the calculations by adopting parameters as laid down by I.L.C. 1957 and reptakos judgment given by Supreme Court in the year 1991.
The rates of food items were taken from Kendriya Bhandar.
The fundamental components for wage fixation are food, clothing, housing, light and fuel, education.
2731 calories have been prescribed by NIN-Hyderabad for an adult worker to perform moderate activity.
Seventh Pay Commission has also laid down 2,700 calories per day for a workman to perform moderate activity.
Based on above scientific formula, following increase rates of minimum wages were calculated:
1. Un-Skilled - Rs. 13,350/- PM/Rs. 513/- P.D.
2. Semi-Skilled - Rs. 14,698/- P.M./Rs. 565/- P.D.
3. Skilled - Rs. 16,182/- P.M./Rs. 622/- P.D.
4. Graduates & above- Rs. 17,604/- P.M./ Rs. 677/- P.D.
(8.79% of skilled wages)
Above calculations were put to voting among the committee members and the same was passed by six members of the committee out of nine members who were present in the meeting and therefore, it was passed by majority.
D.A. neutralization shall be same as in the past i.e.Rs. 1.35 per point for un-skilled category, Rs. 1.5 per point for semi-skilled category, Rs. 1.65 per point for skilled category, Rs. 1.8 per point for graduates and above.
Next instalment of D.A. falls due w.e.f. 01.04.2017 followed by second instalment w.e.f. 01.10.2017.
These recommendations of the Minimum Wage Advisory Committee was approved by the Cabinet Decision and same were approved by the Lt. Governor being the Competent Authority on March 2.
Three months time period is proposed to be given for creating awareness and sensitization among employers by way of publicity in electronic and print media and thereafter they shall be submitting online statutory returns under various labour laws including Minimum Wages Act, 1948, these returns shall be scrutinized and examined by the department and thereafter, a comprehensive complaint based inspection shall be carried out in a mission mode, challans/ prosecutions shall be filed against defaulting employers, if any.