 Hello everyone my name is Deeksha Jain and I secured rank 22 in civil services examination 2018. In this video I will be talking about chapter 11 of the economic survey which is titled redesigning a minimum wage system in India for inclusive growth. So firstly going into the historical background which was given by the economic survey minimum wage actually finds a historical mention in Arthashasthra of the second century BC where both government servants as well as private workers were to be given a minimum wage of 60 panas and recent studies have shown that minimum wage can promote social justice without any major negative implications on the economy which is basically saying that it does not mean that if you increase minimum wages then the economy can go down because of rising wages. So studies have shown that there is no such relationship therefore with 93 percent workers in the informal economy in India. If we have a well designed well implemented minimum wage system it can reduce inequalities of income it can bridge gender gaps and wages which is very high in India and it can also alleviate poverty. So let us first look at the minimum wage system in India. India was one of the first countries to introduce a minimum wages law or the minimum wages act way back in 1948 it covered both regular and casual workers minimum wages in India are set by both the central government as well as the state government and they are all basically they have a certain list of scheduled employees which are included in this minimum wage system. In 1992 the Supreme Court of India ruled that minimum wage should also be keeping in account aspects such as children's education, medical requirements etc. In 1996 the government adopted for the first time a non statutory national floor level minimum wage basically what it means is that it was a floor level minimum wage for the entire nation on top of which the state can increase their own minimum wage as per the requirements of their own states and the living expenses of that particular state. So the NFLMW which is the floor wage has been increasing over the years according by incorporating inflation and all and in 2017 it was rupees 176 per day. So there is also the idea of having a national level minimum wage and the problem with implementing such an idea in India are the existence of wide disparities in economic development and large variation in cost of living across the states. So it is very difficult to have a single minimum wage across the country. So anyways it has been 70 years since independence, more than 70 years and we have had a very good economic growth but despite that minimum wage has not been properly implemented in India and we have not been able to function work towards an inclusive growth as we would have wanted to and minimum wage can actually help us in driving the economic growth, it can increase the aggregate demand, it can strengthen the middle class and it can reduce the income inequalities. Now the problems with the current minimum wage system as it exists in India the first is extreme complexities. We have 1,915 minimum wages defined in different various schedules and various laws of India and there are different categories for job and jobs and skilled and unskilled. So it leads to a lot of variability. Variability is also there because of interstate differences. So for example the highest minimum wage is there in Kerala which is 905 and it is 16 in Nagaland so there is a lot of interstate variability. Second problem is that despite this complex structure there are a lot of loopholes and minimum wage which means that people are not covered by this minimum wage. One in every three wage earners is actually not covered under the minimum wage law. So these people don't have social security and their wages are they don't have bargaining power on the basis of minimum wage. So anyways let us now talk about the steps that have been taken by India. The national level floor wage we have already spoken about. There has been a strengthening of coordination of the central advisory body and the state advisory body to strengthen the minimum wage implementation. The states have also been promoted to determine minimum wage rates through consultation with different sections and with different stakeholders in this approach by broader regional committees and also district committees. Now another important issue that this economic survey raises the gender disparity in minimum wage and what it is saying is that there is a systemic discrimination built into the law and how does this happen? So basically for example women dominate in the category of domestic workers and within this category security guards are also there. So men dominate in as security guards and women are dominating as domestic workers. While both these occupations fall within unskilled labour the disparity between the wages of these two categories is very high and it varies across state. So women within the system itself women are getting less paid for unskilled labour they are getting very much less paid for unskilled labour than their male counterparts are getting paid. Now if we talk about compliance of the minimum wage law it has not been very good because the law is very complex it is people don't really know about the minimum wage law so it is difficult to implement it as they don't come with their grievances. There are different statutory minimum wages in different states so what happens is if in state A the wages are less and in state B the wages are high then the industries tend to migrate from state B to state A. So there is a need to curb that tendency also so that the industry does not migrate. However one good thing about the minimum wage law in India is that it has shown a lighthouse effect according to the economic survey in some areas. Now what is a lighthouse effect? It basically means that even though minimum wage is not being implemented properly but it pulls the overall wage and it gives more bargaining power to the workers. So it sort of acts as a benchmark which pulls the wage even if they are not up to the mark as per the minimum wage and the vulnerable workers do get some benefit out of having a minimum wage. So again one more point that I would like to mention is that if we actually are able to implement the minimum wage properly and if we have a less complex more simplified system then one of the biggest beneficiaries would be vulnerable section and women because they dominate in the unskilled and the unorganized sector and if their wages come with in parity with the other sections of the society then the income inequality will definitely reduce and they will be economically empowered. Now the economics survey talks about way forward that what is it that we can do to improve the minimum wage scenario in India. The first thing is simplification and rationalization. The complex web of laws and categories that is there in minimum wage system in India needs to be simplified and one of the good things that can be done in which is also you know it is on the charts is the Code of Wages Bill because it sort of consolidates all these diverse laws into four codes of wages. So that can a four labor code so that can really lead to a simplification of wage laws. The second thing that we can have is a national floor level wage which we already have but we can divide it as per four regions. So instead of having a different wage form for every state we can have it for only four regions. So this will create some sense of uniformity across the country and that migration of industries that I spoke about a few minutes ago that will be curtailed. The third is the criteria for setting minimum wage. So it should consider fixing the minimum wages based on number one the skilled category and the unskilled category and the geographical region or both of these categories can be taken into account but it should not have the diversification of categories of labor that it has right not just for simplification. Number four is coverage. As I said earlier that one in three people are excluded from the minimum wage law so we should focus on universal coverage under the minimum wage law. Number five is regular adjustment. A mechanism should be developed that minimum wage can be adjusted as per inflation as per different requirements and different stakeholders considerations and we can develop technology for similar to countries like Montenegro, Nicaragua, Netherlands etc. The role of technology in this is also very central. If we use more technology we can have a central dashboard where every state can lock in their experiences of minimum wages how many the statistics related to minimum wages its implementation. So we can have a data which can focus on better policy making and better implementation. Apart from that we can also have number seven which is grievance attress. There should be an easy to remember toll-free number where anybody who is not being paid the minimum wage can talk and register their grievances. So what this will do is that it will empower people and it will make sure that the implementation is done properly. Finally the economics survey also talks about some international examples. I will be mentioning two or three and the rest will be there in the slide. For example in UAE all enterprises are legally required to pay their wages both whether their nationals or migrant workers through banks and other financial service providers. So there is a lot of transparency in who is being paid what so they cannot escape the minimum wage laws. In US there is an app called the wage and hour guide for employees app. It puts federal and state wage our laws at the fingertips of the employers so that there is no confusion regarding the laws and there are other grievance attress mechanisms in South Africa as well. So we can learn from these international examples and there are other measures suggested in the economic survey itself to improve minimum wage which will help in taking the economy forward and making the society socially equitable. Thank you. Subscribe to our channel and click on the bell icon to get latest updates on upcoming videos.