MINIMUM WAGE HIKE IN HARYANA : SHALL AFFECT EMPLOYMENT &
FORCE CLOSURE SAYS PHD CHAMBER

The 41% hike in minimum wages announced by the Haryana Government, effective 1st July 2007, is a severe blow to the SMEs sector in the State.  PHD Chamber fears migration of labour intensive industries out of Haryana to states where the wages are lower.   As against the hiked minimum wages of Rs.3510/- for unskilled workers in Haryana, in neighbouring Punjab the wage is  Rs.2440/-, in HP Rs.2100/-, in UP Rs.2600/- and in Uttarakhand Rs.2080/-.

Mr. Sanjay Bhatia, President, PHD Chamber lamented that objections of SMEs to the draft Notification to hike wages have not been favourably considered by the State Government.  He added that disadvantage of SMEs and other, labour intensive units in particular have been compounded in Haryana on account of tax exemption in neighbouring Himachal Pradesh & Uttarakhand as well as power shortages, frequent tripping etc. which shall be detrimental to industrial growth and employment creation.  Power shortage is acutely affecting industry in Gurgaon, Faridabad, Bahadurgarh, Sonepat, etc.

At a meeting of employers convened by PHD Chamber, it was feared that the wage hike shall lead to lower employment creation which in fact should have been primary consideration of the Government.  Automation and minimizing labour usage in manufacturing and services would be encouraged, thus shrinking employment opportunities further which is against the interest of the state.

The Minimum wages Act, 1948 empowers the state to fix rates of minimum wages only and their revision from time to time.  It is therefore astonishing that while revising wages for various scheduled employments, the Government for the first time in the country has also prescribed an automatic promotion policy even for unskilled workmen which is not in tune with the spirit of Minimum Wages Act.  

The Act does not empower the State Governments to declare and prescribe any promotion policy which is purely a management function.  PHD Chamber has pointed out that the notification surprisingly prescribes that unskilled employees with 10 years experience would be deemed to be categorized as Semi-skilled-A and after 3 years the semi-skilled-A would be categorized as semi-skilled-B employees.

Mr. Sanjay Bhatia stated that a worker may be entitled to wages for the job he has been actually performing and as such while performing the job of unskilled nature he can not be deemed to be semi-skilled or skilled merely by working for a specified number of years in a particular trade.