India Boosts Minimum Wages for Unorganised Sector Workers from October 2024

India's central government increased minimum wage rates applicable to workers in the unorganized sector yesterday from October 1, 2024. This is part of the biannual revision of Variable Dearness Allowance (VDA). Every six months, the increase in the cost of living is taken into account when revising VDA.

Key Details of the Minimum Wage Hike

• Effective Date: New minimum wages apply from 1 October 2024.
• Categories of Workers: The new wages are categorized based on skill levels—unskilled, semi-skilled, skilled, and highly skilled—and differentiated further by their geographical areas being classified as A, B, and C.

Revised Wage Rates for Area "A"

For workers categorized under Area "A," the new daily and monthly wages are as follows:

• Unskilled Workers: ₹783 per day (₹20,358 per month)
• Semi-Skilled Workers: ₹868 per day (₹22,568 per month)
• Skilled Workers (including clerical roles): ₹954 per day (₹24,804 per month)
• Highly Skilled Workers and those in watch and ward roles carrying arms: ₹1,035 per day (₹26,910 per month).

The new minimum wage hike in India would then make area A a geographical classification to determine the wages. It divides areas into three areas; A, B, and C based on economic conditions and areas to consider the cost of living.

Characteristics of Area A

Economic status: Area A comprises countries that entail high costs of living and positively concluded economic statuses.

Wage Rates: Workers in Area A are paid the highest minimum wage rates in comparison to Areas B and C. This would imply that living costs in those areas are the highest.

This classification helps ensure that the wages are congruent with the economic realities in a given area; thus, workers get fair wages depending on the location.

Purpose of the Revision

This wage hike aims to support workers across various sectors such as construction, loading and unloading, housekeeping, mining, and agriculture. The government revises the VDA biannually based on fluctuations in the Consumer Price Index for industrial workers. This latest adjustment follows a previous revision made in April 2024.

The Ministry of Labour & Employment emphasizes that this increase is crucial for helping workers manage their expenses amid rising inflation.

The revised minimum wages signify a crucial step toward improving the livelihoods of workers in India’s unorganized sector. By aligning wages with regional economic conditions, the government aims to provide essential support in the face of inflation, thereby fostering a more equitable work environment across different areas and skill levels.

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