India's Minimum Wage Stagnant for a Decade

Minimum wages in India have seen no substantial revision for nearly a decade, a situation experts believe is unsustainable. The government is reportedly working towards establishing a statutory national floor wage under the Code on Wages, 2019, with a proposed Central Advisory Board. The current national floor level minimum wage stands at Rs 176, last revised in 2017, amounting to a monthly earning of Rs 5,500. This figure is critically close to the nominal monthly per capita consumption expenditure, which was Rs 4,122 in rural areas and Rs 6,996 in urban India in 2023-24.

Experts are urging for a minimum wage that is indexed to inflation and revised periodically, ideally every three years, to remain relevant. The non-binding nature of the current minimum wage allows actual earnings to fall even lower, exacerbating the issue for informal sector workers. Increasing informal sector wages is seen as crucial for sustaining consumption demand, as a large segment of the workforce is employed in this sector. While a statutory national floor wage is expected to help, challenges may persist in areas with surplus labor.

The concept of living wages has also been considered, but its subjective nature makes a revised minimum wage more practical, provided its composition thoroughly includes all cost-of-living aspects. Beyond wages, experts also stress the need for government-mandated standards for working hours, breaks, childcare facilities, and equal pay for men and women. While higher minimum wages could boost living standards, potential impacts on company finances and inflation are also noted.