Minimum Wage Legislation in India
There is a separate minimum wage legislation in India. The Minimum Wages Act, 1948, is an Act to provide for fixing minimum rates of wages in certain employments, and it extends to the whole of India.
There exist more than one minimum wage in India. As per Section 2 of the Act and Sections 27 and 28, it is mentioned that both the State and Centre have the power to form Minimum Wage rates.
In India, minimum wages are declared at national, regional, sectoral, and occupational or skill levels. As per Section 3 of the Act, minimum rates of wages may be fixed at both national and state levels. Also, Section 3 (3) of the Act specifies that minimum rates of wages may be fixed for different skills and occupations.
Minimum wages in India are declared on a daily, hourly, and monthly basis. Section 3 (b) of the Act defines that Minimum Wages are as per the piece rate, hour rate, and monthly rate as well.
As per Section 3 (14) (b) of the Act, there has not been any specific time period. However, it may be in accordance with the period fixed under Section 4 of the Payment of Wages Act, 1936 (4 of 1936).
As per Section 9 of the Act, uprating is based on decisions jointly made by the Government, employer, and trade union representatives.
Minimum wages in India have both fixed and variable components. Section 4 mentions that minimum wages may be inclusive of basic pay and with a special allowance on which it is based.
The fixed component of minimum wages is updated in more than 2 years. Section 3 of the Act mentions that the period for revision of the fixed component of minimum wages can be anywhere within 5 years of its fixation.
The variable component of minimum wages is updated at irregular time lags. Section 4 of the Act mentions that the special allowance rate should be adjusted at such intervals and in such manner as the appropriate government may direct.
Section 4 of the Act mentions that Minimum wages are based on basic wages and the cost of living index. The yardsticks on which minimum wage is revised are:
(a) Three consumption units per earner,
(b) Minimum food requirement of 2700 calories per average Indian adult,
(c) Cloth requirement of 72 yards per annum per family,
(d) Rent corresponding to the minimum area provided under the Government's Industrial Housing Scheme,
(e) Fuel, lighting, and other miscellaneous items of expenditure to constitute 20% of the total Minimum Wages,
(f) Children's education, medical requirement, minimum recreation including festivals/ceremonies, and provision for old age, marriage, etc., should further constitute 25% of the total Minimum Wage.
The national poverty line is Rs. 356.30 in rural areas and Rs. 538.60 in urban areas, per capita per month as updated by all-India poverty lines 2004-05.
This scheme is included under the Five Year Plan as per the Planning Commission of India. Hence, the poverty line is updated every 5 years.
The poverty line was last updated in the year 2004-2005.
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