Government Increases Minimum Wage Rates to Support Workers Amid Rising Costs

The government announced an increase in minimum wage rates by revising the Variable Dearness Allowance (VDA) on Thursday. This move aims to help workers cope with the rising cost of living, especially those in the unorganised sector. Workers in various fields, including construction, loading and unloading, cleaning, and agriculture, will benefit from the revised wage rates.

New Wage Rates Effective October 1

The new wage rates will take effect from October 1. The last revision occurred in April this year. Minimum wage rates are categorized by skill levels—unskilled, semi-skilled, skilled, and highly skilled—as well as by geographical area—A, B, and C.

According to the Ministry of Labour and Employment, minimum wage rates in area “A” will be as follows: unskilled workers will earn Rs 783 a day (Rs 20,358 per month); semi-skilled workers will earn Rs 868 a day (Rs 22,568 per month); skilled workers will earn Rs 954 a day (Rs 24,804 per month); and highly skilled workers will earn Rs 1,035 a day (Rs 26,910 per month).

VDA Revision Based on Consumer Price Index

The government revises the VDA twice a year, effective from April 1 and October 1, based on the six-month average increase in the Consumer Price Index for industrial workers. Retail inflation for industrial workers has moderated to 2.15 percent in July, down from 7.54 percent in the same month last year.

Year-on-year inflation for June 2024 was 3.67 percent, compared to 5.57 percent in June 2023. The Consumer Price Index-Industrial Workers (CPI-IW) has been declining since February 2024 and was at 3.87 percent in April 2024, according to Labour Ministry figures. The all-India CPI-IW for July 2024 increased by 1.3 points, reaching 142.7, up from 141.4 in June.

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