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Increasing Minimum Wages Hurts the Already Troubled Traders

The enhanced minimum wages for unskilled laborers have been increased from Rs 13,550 to Rs 14,842. The wage of a semi-skilled worker has been increased from Rs. 14,698 to Rs. 16,341. The wages of skilled laborers have been increased from Rs 16,182 to Rs 17,991. Non-metric wages have been increased from 14,698 to 16,341 rupees.

In order to reduce poverty and dealing with the economic slowdown, and further increasing demand and production Delhi Government has decided to increase minimum wages yet again saying this move will also generate employment.

The enhanced minimum wages for unskilled laborers have been increased from Rs 13,550 to Rs 14,842. The wage of a semi-skilled worker has been increased from Rs. 14,698 to Rs. 16,341. The wages of skilled laborers have been increased from Rs 16,182 to Rs 17,991. Non-metric wages have been increased from 14,698 to 16,341 rupees.

According to Arvind Kejriwal, around 55 lakh workers in the city will benefit from the increased minimum wages that have been notified by the Delhi government following the Supreme Court’s recent order.

The enhanced minimum wages for unskilled laborers have been increased from Rs 13,550 to Rs 14,842. The wage of a semi-skilled worker has been increased from Rs. 14,698 to Rs. 16,341. The wages of skilled laborers have been increased from Rs 16,182 to Rs 17,991. Non-metric wages have been increased from 14,698 to 16,341 rupees.

Addressing a press conference Kejriwal said employees will also get dearness allowance for the months of April to September, besides a Diwali bonus of one month’s salary.

The government has removed 1,373 contractors so far for not paying minimum wages to their workers. “We had run two special drives and booked over 100 employers for violating minimum wages rules. Six contractors were registered under cases of cheating,” Kejriwal said.

“There is no doubt that the rise in minimum wages will certainly help in the standard of living and means of the workers. However, if we talk about the industry, the industry is already running through a struggling phase with the recession, less demand etc. In this tough situation there is no possibility for the industry to increase the pricing. So with the increase in wages, the industry will go in further losses and it will hit the bottom line of all companies certainly. The implementation ideally should have been later when the industry recovers through the slowdown and not at the present, but we have no choice other than abiding the laws. We should increase the wages of course as the workers also need the wages but this is definitely not the correct time of its implementation and it should wait till the economy takes a favourable shape.”

Rakesh Grover, Groversons Apparel Pvt. Ltd., Delhi.

However, this step to fight for the employees has left the employers/traders in a pickle. Kejriwal said Delhi has the highest minimum wages in the country. This hike amidst such economic conditions has however resulted in revolt. Traders’ body CAIT  opposed the Delhi government’s move to increase minimum wages and demanded a roll back of the decision, saying it will prove to be a major financial burden on traders and employers in the city.

The Confederation of All India Traders (CAIT) has sent a communication to Delhi Chief Minister Arvind Kejriwal on this issue and said that the Delhi government has taken such an important decision without taking the traders and employers of Delhi into confidence. It said such a “unilateral decision” will put much higher financial pressure on traders and employers in Delhi.

“Industry in Delhi has already reduced in size because of the cheaper wages available in NCR like Faridabad, Gurgaon, Noida, Manesar. So industry has already moved out and with this increase in wages the remaining part of the industry will also move out shortly. They cannot afford to pay such wages. International competition is killing the industry and in such situation an exporter cannot even compete by being in the NCR also. It will be a big pressure on exporters of Delhi to pay the increased wages and I am sure very soon they will plan to move out. Government has a welfare agenda and other industries will be comfortable and comply to the increased wages and I am sure and a lot of people will also get benefitted, but unfortunately garment industry cannot.

Animesh Saxena, Neetee Clothing Apparel Llp, Delhi.

CAIT said on behalf on Delhi traders, it has lodged a “strong protest against such unjustified, arbitrary, unilateral and uncalled for increase in minimum wages”.

The Confederation of All India Traders (CAIT) has sent a communication to Delhi Chief Minister Arvind Kejriwal on this issue and said that the Delhi government has taken such an important decision without taking the traders and employers of Delhi into confidence. It said such a “unilateral decision” will put much higher financial pressure on traders and employers in Delhi.

“Industry’s reaction is quiet diverse and there are different opinions on the rise of the minimum wages. In our organisation we are definitely complying with the rules and revised minimum wages. There is no other way round. Indeed, this adds to the challenges the industry is facing already with the international slowdown but it is the need of the hour and cannot be denied. We need to work harder and compensate the wages with better productivity, efficiency, quality, better supplier management. This will also have an effect on the final product costs but again now we need to work even harder to be in the game.

R.C Kesar, OGTC, Delhi.

CAIT Secretary General Praveen Khandelwal said that while fixing the said minimum wages, the Delhi Government did not held any consultation with traders and it appears that neither the impact of such increase on trade of Delhi has been assessed.

“The Delhi trade which has been acknowledged as the largest distribution centre of goods in the country is already reeling under an unprecedented slowdown and the traders are finding it difficult to survive in the business and the steep hike in minimum wages will result into unnecessary huge financial load on the traders,” Khandelwal said.

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