As per the existing provisions of Minimum Wages Act, minimum wages are revised quinquennially in the Central Sphere. In order to protect the minimum wages against inflation, the Central Government introduced the idea of Variable Dearness Allowance (VDA) since 1989. The appropriate Governments are required to increase the minimum rates of wages from time to time by adding VDA, twice a year or annually, taking into account the rise in the Consumer Price Indices for the Industrial Workers. In the Central sphere, the minimum rates of wages are revised effective from 1stApril and 1st October every year.

As the Draft Cabinet Note for the amendment of the Minimum Wages Act, 1948 for enhancing penal provisions along with other proposals is under finalization, the subject matter of the question is confidential at present.

The Minister of State for Labour & Employment Shri K. Suresh gave this information in reply to a written question in the Rajya Sabha today whether it is a fact that Government is considering a proposal to amend the Minimum Wages Act to link minimum wages of factory workers to the retail inflation rate and enhance penalties for erring companies.

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September 2021