Hike in wages to impact SMEs in Haryana: PHDCCI

The 41 per cent hike in minimum wages announced by the Haryana government from July 1 is going to impact small and medium enterprises (SMEs) in the state and could lead to relocation of industries to other states.

Stating this, the PHD Chamber said that it would result in migration of labour intensive industries out of Haryana to the states where wages are lower.

As against the hiked monthly minimum wage of Rs 3,510 for unskilled workers in Haryana, in neighbouring Punjab the wage is Rs 2,440, Rs 2,100 in Himachal Pradesh, Rs 2,600 in Uttar Pradesh and Rs 2,080 in Uttarakhand.

Sanjay Bhatia, president, PHD Chamber said the objections of SMEs to the draft notification to hike wages were not favourably considered by the state government.

He added that the disadvantages of SMEs and other labour-intensive units have been compounded in Haryana on account of tax exemptions in neighbouring Himachal Pradesh and Uttarakhand as well as power shortages.

PHD Chamber added that the Minimum Wages Act, 1948 empowers the state to fix rates of minimum wages only and their revision from time to time.

"It is therefore astonishing that while revising wages for various scheduled employments, the government, for the first time in the country, has also prescribed an automatic promotion policy even for unskilled workers, which is not in tune with the spirit of the Act," the chamber said.

The chamber has also pointed out that the notification surprisingly prescribes that unskilled employees with 10 years experience would be deemed to be categorized as semi-skilled-A category employee and after three years the semi-skilled-A category would be categorized as semi-skilled-B employee.

Bhatia added that a worker can not be deemed to be semi-skilled or skilled merely by working for a specified number of years in a particular trade.