Home/ News / India/  How government calculates minimum wage

New Delhi: The minimum wage for workers off late has gained a traction as the centre is brininging a national mandatory minimum wage under which states wont be able to pay. Whether this will benefit a large section of workers is still under debate. Mint explains what kind of criteria government uses to calculate minimum wage.

The 15th Indian Labor Conference (ILC) in 1957 had determined the need-based minimum wage for a single industrial worker. The norms set by the ILC had said that it should cover all the needs of a worker’s family.

The normative family is taken to consist of a spouse and two children below the age of 14. With the husband assigned 1 unit, wife, 0.8 unit and two children, 0.6 units each, the minimum wage needs to address 3 consumption units.

The food requirement per consumption was derived from the recommendations of Dr. Wallace Aykroyd, the noted nutritionist of that time. Aykroydn had stated that an average Indian adult engaged in moderate activity should, on a daily basis, consume 2,700 calories comprising 65 grams of protein and around 45-60 grams of fat.

Aykroyd had further pointed out that animal proteins, such as milk, eggs, fish, liver and meat, are biologically more efficient than vegetable proteins and suggested that they should form at least one-fifth of the total protein intake.

The clothing requirements should be based on per capita consumption of 18 yards per annum, which gives 72 yards per annum (for a family of 4) or 5.5 meters per month for the average worker’s family.

For housing, the rent corresponding to the minimum area provided under the government’s industrial housing schemes is to be taken. The 15th ILC kept it at 7.5% of the total minimum wage. Besides, fuel, lighting and other items of expenditure should constitute an additional 20 percent of the total minimum wage.

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Updated: 13 Jul 2019, 11:32 AM IST
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