[India] Give states the power to determine minimum wage

The Confederation of Indian Industry (CII) has spoken out to say states should have the power to determine minimum wages because a national minimum wage will impact job creation, The Hindu Business Line reports.

Sources say the labour ministry will probably look for Cabinet approval for the Code on Wages Bill this week, pushing for its passing in the Parliament session. CII has said minimum wages fixed by states should be based on three criteria: geographic location, skill and occupation. However, the wage cannot be lower than the minimum wage fixed by the Centre.

CII said, “The concept of a national minimum wage will affect job creation, so it is necessary to give states power to fix their own minimum wages.”

The industry chamber suggested that the government should fix a minimum wage for unskilled workers but that the wages of the skilled and semi-skilled labour force should be set by market forces.

The Code on Wages Bill allows the Central Government to fix minimum wages for certain sectors - including railways and mines - leaving states free to set a minimum wage for other categories of employment. The Code also has for the setting of a national minimum wage. The Central Government may set separate minimum wages for different regions or states.

In addition, the draft law says that minimum wages would be revised every five years.

CII also reportedly called for a comprehensive National Employment Mission and the establishment of an inter-ministerial and all-state National Employment Board to drive job creation in the country.

The chamber suggested a National Employment Board, set up by the government, including representatives of key ministries, state governments, industry experts, and trade unions and other stakeholders to explore and address employment creation hurdles. To encourage more women to join the workforce, CII recommended the provision of child care and maternity benefit subsidies under the Maternity Benefit Amendment Act.