Government Initiates National Floor Wage Exercise with Advisory Board

 The Labour Ministry has begun work on determining India's statutory National Floor Wage under the Code on Wages, marking a key step in implementing the country's labour reforms, as per The Business Standard report. 

Officials are currently working on the wage calculation methodology and updating the household consumption basket, while parallel consultations with states are also underway. 

Methodology Under Preparation 

The Centre is preparing the methodology for fixing the National Floor Wage, drawing on the framework recommended by an expert committee in 2021. 

The proposed approach is based on household consumption requirements and regional variations in the cost of living. The methodology is expected to account for changes in inflation since the committee submitted its report. 

Central Advisory Board to Guide Wage Fixation 

The Centre has begun constituting a Central Advisory Board (CAB), which will hold consultations before recommending the National Floor Wage. 

A senior official said one of the biggest challenges is the wide variation in minimum wages across states, adding that consultations with state governments are already underway.  

The proposed 15-member board will include representatives of employers, trade unions, independent members, and five state government representatives nominated by the Centre. 

National Floor Wage to Have Legal Backing 

Once notified, the National Floor Wage will become the legally binding minimum threshold below which states and Union Territories cannot fix their minimum wages. 

The Code on Wages requires the Centre to determine the wage after considering workers' minimum living standards and other relevant factors.  

This replaces the earlier National Floor Level Minimum Wage; a non-statutory benchmark last revised to ₹176 per day in 2017. 

Impact on States and Timeline 

The government has not announced a timeline for notifying the National Floor Wage. 

Once implemented, the framework is expected to influence wage levels across states and sectors, with states and Union Territories that currently prescribe lower minimum wages likely to revise them in line with the new statutory floor wage. 

Read More: Government Mandates Licenses for Medicines with Over 12% Alcohol! 

Conclusion 

The ongoing exercise marks the next phase of implementing the Code on Wages, combining technical assessment, stakeholder consultations, and updated consumption data to determine a nationally applicable statutory floor for minimum wages.   

Want to read stock market updates in Hindi? Angel One News gives comprehensive share market news in Hindi.  

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.