Noida workers stir: Unrest hastens search for national floor wage rate

NEW DELHI: The government has fast-tracked determination of a national floor wage rate, which will factor in worker compensations across states and the National Capital Region (NCR) and rise in inflationary pressures due to the Iran war, officials said.

The move comes in the backdrop of the recent unrest in the NCR with factory workers demanding higher wages after the implementation of the labour codes.

"We are examining the current wages and inflation across states and will soon arrive at floor wage rate for different geographies," a senior government official told ET on condition of anonymity.


Until now the central government issued an advisory to states on minimum wage rate that was not binding on them. The current rate is ?176 per day, and some states have even notified a rate below this prescribed rate.

The new labour code on wages now empowers the Centre to set a statutory floor rate, which will be binding. However, the floor wage can vary among regions across the country and be revised every five years.

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However, since there has always been a variation in minimum wages among states, with industrial states paying higher wages compared to north-eastern, hilly or non-industrial states, the Centre will ensure that the floor wage is not a burden on the states but is commensurate with the rising cost of living in each state, the official said.

The floor wage will take into account the recent increase in wages as well as retail inflation on the back of higher fuel and food prices due to the ongoing West Asia crisis.

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Retail inflation increased to 3.4% year-on-year in March from 3.2% in February and is expected to be around 4% as the impact of the Iran war continues to feed into prices.

Meanwhile, India's wholesale inflation hit a 38-month high of 3.9% year-on-year in March, up from 2.1% in February, driven by higher prices of crude oil, energy and manufactured goods amid the war.