Indian Government Increases Minimum Wage for Unorganized Sector Workers

In a significant move, the central government of India announced an increase in minimum wage rates for workers in the unorganized sector. This decision is considered a Diwali gift for laborers across various sectors such as construction, mining, and agriculture. The new wage rates will be effective from October 1, 2024, and the details are available on the government’s official website, clc.gov.in.

The government has revised the wages by increasing the Consumer Price Index (CPI) for workers by 2.40 points. As per the new rates, the minimum wage for workers will be Rs. 783 per day or Rs. 20,358 per month. For security guards, the minimum wage will rise to Rs. 1,035 per day. These changes stem from the biannual revision of the Variable Dearness Allowance (VDA).

The revision comes at a time when thousands of workers had participated in protests earlier in the week demanding wage increases and the repeal of four labor laws. Many workers voiced concerns about laws favoring multinational corporations.

The wage structure is divided into three geographical categories known as Areas A, B, and C, based on the economic conditions and cost of living in those regions. Area A comprises regions with high living costs and robust economic standing, thus receiving the highest minimum wages compared to Areas B and C. This classification seeks to align wages with economic realities, ensuring fair compensation based on location.

The Ministry of Labour & Employment stated that this increase is crucial for aiding workers amidst rising inflation and helps align wages with regional economic conditions. This adjustment followed a previous revision in April 2024 and underscores the government’s commitment to improving the livelihoods of workers in India’s unorganized sectors.