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By Madhur Singh
Aug. 15—All categories of workers in Delhi will soon receive a 50 percent increase in minimum wage, Delhi Chief Minister Arvind Kejriwal said in televised remarks Aug. 15.
According to Kejriwal's announcement, monthly minimum wages for unskilled labor will increase to 14,000 rupees ($209) from 9,500 rupees ($142), semi-skilled labor minimum wages will increase to 15,500 rupees ($231) from 10,600 rupees ($158) and skilled labor minimum wages will increase to 17,000 rupees ($254) from 11,600 rupees ($173).
Wages covered under India's Minimum Wages Act of 1948 will increase once a formal gazette notification is issued. The notification will include the date from when the hike will be operational.
The hike will apply to all businesses situated in the National Capital Territory (NCT) of Delhi, which includes areas in and around the country's capital city of New Delhi. The NCT houses a range of manufacturing and services businesses, including textiles, automobile spare parts, hospitality, health care and transport.
India's Minimum Wages Act of 1948 requires governments to fix wages by considering the nation's Cost of Living Index, which takes into account various factors such as cost of food, clothing and accommodation.
Announcing the wage hike, Chief Minister Kejriwal urged all state chief ministers and the prime minister to follow suit, pointing to high inflation and a widening rich-poor divide.
While industry associations have warned that higher wages in Delhi may lead to an exodus of businesses for greener pastures, political analysts say the hike will pose a challenge to the state governments facing elections early next year: Punjab, Uttar Pradesh, Uttarakhand, Manipur, Himachal Pradesh, Goa and Prime Minister Modi's home state of Gujarat.
The last mandated wage hike took place in Delhi in July 2011, and a hike was due this year under a policy of rasing wages every five years, Ajay Raghavan, partner at India-based law firm Trilegal, told Bloomberg BNA in an e-mail Aug.11.
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The national Minimum Wages Act of 1948 is available at http://www.ilo.org/dyn/travail/docs/623/Minimum%20Wages%20Act%201948.pdf.
The full list of areas of employment covered by the Minimum Wages Act of 1948 is available at http://delhi.gov.in/wps/wcm/connect/doit_labour/Labour/Home/Statistics+And+Miscellaneous/Schedule+of+Employment+covered+under+the+Minimum+Wages+Act,+1948.
More information on payroll issues in India can be found in the India country primer.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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