An increase of ₹2 in 2 Years?!

After his announcement regarding the simplification of the Labor laws, Minister Santosh Gangwar announced that the minimum floor wage for labour has been increased to â‚¹178 per day, that is a â‚¹2 increase from the levels set in ’16.

How is this calculated? 

While state governments hold the freedom to set the minimum wage in their respective jurisdictions, the National Floor Level Minimum Wage (NFLMW) that is recommended by a special Advisory board (every two years) is the bare minimum they can set. 

Is this good for the labourers?

Not at all! Such an increase is completely insignificant in real terms as it is less than the inflation rate(the rate at which prices have increased). Also, this minimum wage is far less than the ideal levels recommended by various committees that are 3-4 times higher than the current level. 

Our Take

While it makes sense to keep the minimum wage low (to help India move out of the slow down), the Modi govt has shown their inclination to support the business communities (over the low-income class) as this move will further worsen the income gap in the long term!

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