Graphic: Subrata Jana/Mint
Graphic: Subrata Jana/Mint

India’s GDP rose fourfold in 1993-2012, while wages only doubled: ILO

Rural wage grew faster than urban wage, but cumulative wage in urban India is more than double that of rural India, says ILO

New Delhi: India’s gross domestic product (GDP) rose more than fourfold between 1993-94 and 2011-12 but workers salaries only doubled, the International Labour Organization (ILO) said on Monday in the latest indication of low pay and growing wage inequality in the country.

Oever the last two decades, GDP has risen at an annual average of about 7%. “Overall, this means that GDP rose more than four-fold since 1993", but low pay and wage inequality persists, ILO said in its India Wage Report.

“The India Wage Report shows that low pay and wage inequality remain a serious challenge to India’s path to achieving decent working conditions and inclusive growth," said the report, adding that the average real wage in India has doubled between 1993-94 and 2011-12.

It said though rural wage increased faster than urban wage, the cumulative wage in urban India is more than double that of rural India, indicating the wage inequality in the country and how decent work remains a constant challenge.

Citing data from the National Sample Survey Office (NSSO), the report said real average daily wage increased more rapidly in rural than in urban areas and grew faster for casual than for regular workers. Average wages increased faster for women than for men, and in the unorganized sector than in the organized sector.

“Nonetheless, low pay remains pervasive and wage inequality is still very high. In 2011–12, the average wage in India was about 247 per day, and the average wage of casual workers was an estimated 143 per day," it added.

The report said real wage grew faster between 2004-05 and 2011-12 (5.6%) compared to the earlier decade (1993-94 to 2004-05) when it grew 2.6% per year. For the entire period (1993-94 to 2011-12), the average annual growth rate in real wages for all workers was 3.7% per annum.

The gender wage gap also remains very high in India by international standards, although it declined from 48% in 1993-94 to 34% in 2011-12. Of all worker groups, the average daily wages of casual rural female workers is the lowest at 104 per day.

Only a limited number of regular or salaried workers, mostly in urban areas, and highly skilled professionals earn substantially higher average wages, ILO said, adding that “daily wages in urban areas remain more than twice as high as wages in rural areas".

It said that though rural wages increased faster than urban, the cumulative wage in urban India is more than double that of the rural India, underscoring the extent of wage inequality and how the quality of jobs has not picked up despite good economic growth.

“...Low pay remains pervasive and wage inequality is still very high. In 2011-12, the average wage in India was about 247 rupees (INR) per day, and the average wage of casual workers was an estimated INR 143 per day," it added.

Only a limited number of regular or salaried workers, mostly in urban areas, and highly skilled professionals earn substantially higher average wages, claimed the report, adding “daily wages in urban areas remain more than twice as high as wages in rural areas".

The report lamented that average labour productivity (GDP per worker) increased more rapidly than average real wages.

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