The concept of a Universal Minimum Wage called described as basic income guarantee, Citizen’s Income, unconditional basic income in some countries, will be very soon implemented in India as well; albeit only for workers across all industries.
Showcasing a healthy mixture of socialism, and labour reforms, with healthy doses of welfare schemes, Universal Minimum Wage is a warmly debated topic across the world.
Its implementation in India would be a mammoth task, costing the national exchequer billions of additional expenditure.
The question now arises is, whether India can afford such socialist measure? And more importantly, does India really need it at this time?
Universal Minimum Wage in India: The Beginning
During the last Union Budget, Finance Minister Arun Jaitley had mentioned Universal Basic Wage concept for all Indians, which has been proposed under ‘Code on Wages’ law. This would be tabled in front of the Cabinet this month and would be open for discussion during Parliament’s Monsoon season.
Labor Ministry is keen to pass the resolution within the monsoon season itself.
If approved, this would guarantee every Indian worker across all industries, a minimum wage, irrespective of the fact that he or she is working or not.
And, this minimum income guarantee would be applied for even those who are earning more than Rs 18,000 as well.
A Govt. source close this development said, “The ministerial panel on labour issues headed by Finance Minister Arun Jaitley has already approved the Code on Wages. It has already been sent to the law ministry for vetting after which it would be placed before the Cabinet for approval.”
Minimum Wage: The Current Scenario
Once this bill called Code on Wages is passed, it will replace several laws which include: Minimum Wages Act of 1948, the Payment of Wages Act of 1936, the Payment of Bonus Act of 1965 and the Equal Remuneration Act of 1976.
At present, a minimum wage of Rs 18,000 is applicable for workers in some scheduled industries or establishments in the law; this is the wage which any establishment hiring workers in these selected industries need to pay.
States are free to set a higher minimum wage, within their jurisdiction, but Rs 18,000 is the minimum, as stipulated by Center.
As per the plan by Labor Ministry, 44 different labour laws shall be condensed into 4 sections, which are: wages, industrial relations, social security and safety, health and working conditions.
Those who are opposing this new minimum wage code are arguing that Govt. is already spending Rs 48,000 / year on MNREGA, which ensures 100 days of employment for all rural families. If this can solve the issue of unemployment, then what is the need for another new scheme, which will cost even more to implement?
Capitalists section of India, which includes entrepreneurs, industrialists, businessmen and the like will surely object to this minimum wage code, as it will defy the very purpose of free market principles.
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