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21-Aug2018

India needs to improve wage policies to promote inclusive growth: ILO

In order to promote inclusive growth in India, the International Labour Organisation (ILO) in its latest report title 'India Wage Report: Wage policies for decent work and inclusive growth' has stated that the country needs to improve its wage policies. Though, it also said that low pay, gender wage gap and informality remain a serious challenge to India's path to achieving decent working conditions and inclusive growth.

The report showed that about 33% i.e. 62 million workers were paid less than the indicative national minimum wage, and the rate of low pay was higher among women. It further said that since there is a lack of consensus with regard to the methodology used to determine the minimum wage rate, neither the central nor state governments are using it as a floor for determining minimum wages. It added that though the overall wage inequality in India has declined somewhat since 2004-05, it continues to remain high.

The ILO said daily wages increased rapidly for casual workers, workers from rural areas, unorganised sector and female workers. It said only a limited number of regular/salaried workers, mostly in urban areas and highly skilled professionals earn substantially higher average wages. Daily wages in urban areas remain more than twice as high as wages in rural areas.

In order to ensure inclusive growth through sustainable wage policies, the ILO has recommended extending legal coverage to all workers in an employment relationship, ensuring full consultation of social partners on minimum wage systems, undertaking regular evidence-based adjustments, progressively consolidating and simplifying minimum wage structures, and taking stronger measures to ensure a more effective application of minimum wage law. It also recommends other measures to improve the current minimum wage system in India.


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