Govt Steps Up Efforts To Determine National Floor Wage Rate After Noida Protests

The government has stepped up efforts to determine a national floor wage rate, which will take into account worker compensation across states and the National Capital Region.

The floor wage will also factor in the recent rise in inflationary pressure due to the war in West Asia, according to a report by The Economic Times.

The development comes days after violent protests in Uttar Pradesh’s Noida over low wages. The hub of electronics manufacturing, the city was jolted by protests of workers demanding higher wages.

Many of them pointed out the increased cost of LPG cylinders after the supply crunch induced by the Iran war.

“We are examining the current wages and inflation across states and will soon arrive at a floor wage rate for different geographies,” the report cited a government official as saying.

Under the new labour codes on wages, the central government can set a statutory floor rate, which will be binding for companies.

Before the implementation of the labour codes, the Centre would issue an advisory to states on minimum wages, but that was not binding for the states to follow.

The current rate is Rs 176 per day, but some states have set their minimum wages even below that mark.

The new floor rate may differ across regions of the country and be revised every five years.

Generally, industrial states set a higher minimum wage for workers compared to states in the northeastern region and non-industrial states.

The government will ensure that the new floor wage rate does not become a burden for states and companies. However, it will also reflect the rising cost of living so that Noida-like protests do not take place and affect businesses.

Retail inflation increased to 3.4 percent in March compared to 3.2 percent in the previous month. Inflation is expected to reach up to 4 percent due to war-induced pressures on raw material costs.