**Summary:**
In response to a question regarding the potential replacement of minimum wages with living wages, the Ministry of Labour and Employment clarifies its position. The current framework, as outlined in the Minimum Wages Act, 1948, incorporates a cost of living allowance within minimum wages. This allowance, known as Variable Dearness Allowance (V.D.A), is revised bi-annually (April 1st and October 1st) based on the Consumer Price Index for Industrial Workers, mitigating the impact of inflation. The Ministry highlights the Code on Wages, 2019, which subsumes and rationalizes the Minimum Wages Act, 1948, while retaining provisions for cost of living allowances. Furthermore, the Code on Wages, 2019 expands the applicability of minimum wages universally across all employments, a significant shift from the previous limitation to scheduled employments under the 1948 Act. The specific number of workers impacted by this broader application is not explicitly stated, but the policy aims to improve working and living conditions by ensuring a more comprehensive and inflation-adjusted minimum wage structure.
Key Entities Referenced
Ministry of Labour and Employment: The Indian government ministry responsible for labour policy and employment.
Lok Sabha: The lower house of the Parliament of India.
SHRI RAO RAJENDRA SINGH: Member of Lok Sabha who asked the question about minimum wages.
SUSHRI SHOBHA KARANDLAJE: Minister of State for Labour and Employment who provided the answer.
Minimum Wages Act, 1948: An Indian law that provides for fixing minimum rates of wages in certain employments.
Variable Dearness Allowance: A cost of living adjustment allowance paid to employees in India to mitigate the impact of inflation.
Consumer Price Index for Industrial workers: An index that measures the change in the price of goods and services consumed by industrial workers.
Code on Wages, 2019: A law enacted in India to consolidate and amend the laws relating to wages and bonus.
GOVERNMENT OF INDIA
MINISTRY OF LABOUR AND EMPLOYMENT
LOK SABHA
UNSTARRED QUESTION NO. 4060
TO BE ANSWERED ON 18.08.2025
MINIMUM WAGE
4060. SHRI RAO RAJENDRA SINGH:
Will the Minister of LABOUR AND EMPLOYMENT be pleased to
state:
(a)whether the Government proposes to replace minimum wages
enforced by law with living wages; and
(b)if so, the number of workers expected to impact with such a move
and the nature of impact shall have on working/living conditions of
workers in the country?
ANSWER
MINISTER OF STATE FOR LABOUR AND EMPLOYMENT
(SUSHRI SHOBHA KARANDLAJE)
(a) & (b): The Minimum Wages Act, 1948 provides for cost of living
allowance as a component of minimum wages. Accordingly, the
Central Government revises the cost of living allowance called as
Variable Dearness Allowance (V.D.A) on basic rates of minimum
wages under the Minimum Wages Act, 1948, every six months
effective from 1st April and 1st October every year on the basis of
Consumer Price Index for Industrial workers to protect the minimum
wages against inflation.
Recently the provisions of the Minimum Wages Act, 1948,
have been rationalized and subsumed under the Code on Wages, 2019
and the components of minimum wages stipulated therein also
provide for cost of living allowance. Further, the Code makes
minimum wages universally applicable across employments and thus
moves ahead from restrictive applicability of minimum wages limited
to scheduled employments as provided for under the Minimum Wages
Act, 1948.
*****