India needs strong wage policies to promote inclusive growth: ILO

• The International Labour Organization said India needs strong wage policies to promote inclusive growth as inequality, informality and gender wage gap still persists in India.

• While India’s economy in the past two decades has seen an annual average GDP rate of 7% – low pay and inequality persist, ILO said in its India Wage Report: Wage policies for decent work and inclusive growth.

• According to ILO, about 62 million workers are still paid less than the indicative national minimum wage with the rate of low pay is higher for women than for men.

• “Wages have seen a faster growth for the most vulnerable categories including workers in rural areas, informal employment, casual workers, female workers and low-paid occupations. Nevertheless, there remain huge disparities,” ILO said citing the NSSO estimates which indicate that the real average daily wage has doubled between 1993-94 and 2011-12.

• As per the Employment and Unemployment Survey of National Sample Survey Office, in 2011-12, the average wage in India is about Rs 247 per day and the average wage of casual workers was an estimated at Rs 143 per day.

• Only a limited number of regular/salaried workers, mostly in the urban areas, and the highly-skilled professional earned higher average wages. A casual rural female worker earns the least, pervasive inequality.

• According to ILO, though the overall wage inequality in India has declined somewhat since 2004-05, it continues to remain high. The gender wage gap, however, is still steep, as per international standards, despite having declined from 48% in 1993-94 to 34% in 2011-12.

• The wage gap exists for all kind of workers – regular and casual, urban and rural. The women employed as casual workers in the rural economy earn the lowest in India, which is 22% of what urban regular male workers earn.

• In order to improve the current minimum wage system in India, ILO has recommended extending legal coverage to all workers in an employment relationship, ensuring full consultation with social partners on minimum wage systems, undertaking regular evidence-based adjustments, progressively consolidating and simplifying minimum wage structures, and taking stronger measures to ensure a more effective application of minimum wage law. It also calls for collection of statistical data on a timely and regular basis.

• In its report, ILO also recommends other complementary action to comprehensively address how to achieve decent work and inclusive growth. These include fostering accumulation of skill to boost labour productivity and growth for sustainable enterprises, promoting equal pay for work of equal value, formalizing the informal economy and strengthening social protection for workers.

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