India should raise minimum wages or adopt a living wage approach
₹176 ($2.1) per day, last updated in 2017, is one of the lowest in the Asia-Pacific region, surpassed by China’s $11.9, Vietnam $6.5 and even Bangladesh’s $3.7. Brazil’s minimum wage of $47 per day is closer to the figure in developed economies like Australia ($14.8 per hour), the UK ($14.1) and the US ($7.2). While India’s minimum wage remains unchanged, the government routinely updates its dearness allowance (DA) for central government employees.
As the name suggests, DA is meant to compensate for inflation and it was last increased by 4% in March 2024, along with related allowances. It’s time India aligns the floor minimum wage of ₹176 per day with the cost of living and inflation, or replace it with a living wage considering expenses on food, transport, housing, education, healthcare, etc, as defined by ILO for a decent standard of living. Indian states have their own minimum wage mechanisms, usually exceeding the national floor, with larger states revising it annually.
However, discrepancies remain across states for the same job role. This is on account of varying living costs, industrialization levels and labour availability. For example, the minimum wage for a security guard ranges from ₹521-580 per day in Karnataka and ₹395 in Uttar Pradesh to as low as ₹176 in Nagaland.
The current monthly minimum wages ranging from ₹7,000 to ₹20,000 across states are not adequate for a family to maintain a decent standard of living. The Household Consumption Expenditure Survey 2022-23 estimates the country’s average monthly per capita consumer expenditure at ₹3,773 in rural India and ₹6,459 in urban areas, which indicates that the current state minimum wages fall short for a family of four, especially with 5-6% inflation. With
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