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Recommendations of Anoop Satpathy Committee on National Minimum Wage

Date: 15 February 2019 Tags: Economic Planning

Expert Committee on “Determining the Methodology for Fixation of the National Minimum Wage (NMW)”, headed by Dr. Anoop Satpathy has submitted its report. The committee was constituted by Union Ministry of Labour and Employment in January 2017 to review and recommend methodology for fixation of NMW on recommendations of Central Advisory Board (CAB) on Minimum Wages.

It has examined and evaluated standards of national minimum wages and determined base level National minimum wages/wages through evidence-based approach. It undertook rigorous analysis and verified changes in demographic structure, nutritional intakes, consumption pattern, composition of food baskets and relative importance of non-food consumption items to address realities in Indian context.

Recommendations of Expert Committee

  • National Minimum Wage for India: to be fixed at Rs 375 per day or Rs 9,750/month irrespective of sectors, skills, occupations and rural-urban locations for family comprising of 3.6 consumption units.
  • Minimum nutritional requirement: It is culturally edible for fixation of national minimum wage. Proposed particular amount of food items per day per person to constitute national level balanced food basket.
  • This amount is more or less than 10% of 2400 calories + proteins greater than or equal to 50 gm + fats greater than or equal to 30 gm per day per person.
  • It is as per nutritional requirement norms as recommended by the Indian Council of Medical Research (ICMR).
  • Expenditure on essential non-food items: Minimum wage should include reasonable expenditure on essential non-food items such as clothing, fuel, house rent, education, light, medical expenses, footwear and transport which must be equal to the median class.
  • Expenditure on any other non-food items should be equivalent to 25-30% of household expenditure distribution as per National Sample Survey Office (NSSO) survey data of 2011-12.
  • Additional Allowance: additional house rent allowance or city compensatory allowance of Rs 55 per day or Rs 1,430 per month should be for urban workers over and above minimum national wage.
  • Updation: Basic minimum wage must be revised and updated at least every six months in line with Consumer Price Index (CPI) to reflect changes in the cost of living.
  • Food consumption basket should be revived once in every five years, subject to the availability of NSSO-CES data.
  • Regional classification of national minimum wages: It will take account different geographical regions of the country and suit to local realities.
  • States have been grouped into five regions and region specific national minimum wages has been recommended.
  • Region I (national minimum wage Rs 342 per day or Rs 8,892 per month): It will cover states of Assam, Bihar, Jharkhand, Madhya Pradesh, Odisha, Uttar Pradesh, and West Bengal.
  • Region II (Rs 380 per day or Rs 9,880 per month): Andhra Pradesh, Telangana, Chhattisgarh, Rajasthan, Jammu & Kashmir and Uttarakhand.
  • Region III (Rs 414 per day or Rs 10,764 per month): Gujarat, Karnataka, Kerala, Maharashtra, and Tamil Nadu.
  • Region IV (Rs 447 per day or Rs 11,622 per month): Delhi, Goa, Haryana, Himachal Pradesh and Punjab.
  • Region V (Rs 386 per day, Rs 10,036 per month): Arunachal Pradesh, Manipur, Meghalaya, Nagaland, Sikkim, Mizoram and Tripura
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