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    Commerce ministry opposes labour ministry's minimum wages proposal

    Synopsis

    The commerce and industry ministry has opposed labour ministry's move to give statutory backing to the national minimum wages.

    In order to persuade state governments to keep the minimum wages above a certain threshold, the Centre announced a national floor-level minimum wage, which has so far been like an advisory lacking teeth.

    NEW DELHI: The commerce and industry ministry has opposed labour ministry's move to give statutory backing to the national minimum wages, which it claims could impose a hefty burden on the industry.

    Labour ministry, however, wants to press ahead with the proposal and is hoping to soon put out a Cabinet Note for wider consultation after the Cabinet Secretariat gives its comments, setting the stage for a potential showdown between the two ministries on the issue.

    The differences had emerged in a meeting of the committee of secretaries set up to look into on the issue earlier this month. "The cabinet secretary, who presided over the meeting, will send the minutes to us with his own comments. We hope to float a Cabinet Note shortly," a senior labour ministry official told ET.

    In order to persuade state governments to keep the minimum wages above a certain threshold, the Centre announced a national floor-level minimum wage, which has so far been like an advisory lacking teeth. A statutory backing to the minimum wages will give the government powers to prosecute those who pay below this rate and also lift the wages to at least this rate in every state.

    While the national minimum wage rate is Rs 115 per month, there are states such as Tripura, Orissa and Tamil Nadu where the minimum wage for certain sectors are way lower touching Rs 60 in some cases.

    The proposal has got the approval of most state governments, the official added. "The Centre felt the need to make the NFLMW statutory as there is a need to ensure that all workers in the country are paid a basic minimum to ensure sustenance," the official said. The commerce and industry ministry says it would increase industrial costs sharply, citing a report by VV Giri National Labour Institute, even as the manufacturing sector struggles under high rates and the slowdown.

    The study had pegged the burden at Rs 6,000 crore if the minimum wage was statutorily fixed at Rs 110 a day. "At this point of time when the Indian industry is in the midst of a slowdown and global uncertainties are casting a shadow on future performances, we are not comfortable about supporting a move that can add to the industry's discomfort," an industry department official told ET. The department will spell out its worries again once the Cabinet Note is circulated, the official added.

    The industry, too, does not seem keen to have a Central minimum wage thrust on it. "Imposing a national floor-level minimum wage on all states will create chaos. Having a uniform policy sounds nice but it is totally impractical. Wages are determined by a number of factors like house rent. How can you compare rent in Sikkim with rent in Maharashtra?" said Michael Dias, secretary, The Employers Association. Despite the objections, the labour ministry is hopeful of going ahead with the Cabinet Note. "We will obviously include every ministry's comments in the Note and leave it to the Cabinet to take an appropriate decision," the official said. Trade unions want the government to go ahead and also link minimum wages to the price index.
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