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Five Year Plan

Labour Policy

First Five Year Plan

The conditions of work should be such as to

safeguard the worker's health and protect him
against occupational hazards
Greater attention has to be paid to the spread of
literacy and the healthy development of trade
Workers' enthusiasm for the success of public
undertakings should be enhanced

Minimum Wages Act

State Governments are required to fix minimum

rates of wages for agricultural labor by the end
of 1953*
In nine States, including Punjab and Uttar
Pradesh, minimum wages have been fixed
The implementation of the minimum wage
legislation should be reviewed from time to

Wages and Social Security

Steps are necessary to divert saving, to present

expenditure to increase production, which leads
to the restriction on

Large dividends and profit distribution

Remuneration of management
Issue of bonus shares
Any upward movement in wages

Payment by results as proposed by ILO

DA is made a necessary part of wages

Second Five Year Plan

A wage policy (by ILO) aiming at increasing real

wages was difficult to quantify
To bring wages into conformity with the
expectations of the working class
The settlement of wage disputes - Tripartite
Wage Board for cotton, jute textiles, cement and
A welfare fund for Coal, Mica and Manganese
industry should be instituted

Security Measures

The Employees' Provident Funds Scheme

should be extended to cover industries and
commercial establishments having 10,000
workers or more in the country as a whole*
A proposal regarding the provision of medical
benefits to worker's families (under the
Employees' State Insurance Scheme) is under

Third Five Year Plan

Wage Board was extended to Iron and Steel

Apart from the minimum wage, care should be
taken in fixing fair wages for different classes
of workers, and adequate incentives are
provided for the acquisition and development of
skills and for improvements in quality*

Security Measures

Implemented Schemes* like

Employee State Insurance Scheme - the scheme will

be extended to all centers where there is concentration
of five hundred or more industrial workers
Accepted provision of medical benefits to worker's
The Employees' Provident Fund Scheme, which now
covers 58 industries

Sixth Five Year Plan

The provisions of the Minimum Wages Act, 1948 which provides for the fixation
and periodical revision of minimum rates of wages in agriculture and other
employments in the unorganised sectors
The protection mainly benefits the landless agricultural labourers and workers in
other 'sweated' employments. Except in the employments under ths Central
Government which do not account for much under these categories, the
implementation of this Central legislation is the responsibility of the State
Slow-coverage of new employments, delay in periodical revisions of the minimum
rates fixed under the Act and ineffective enforcement of the existing provisions
have been the main issues relating to this measure.
The need for strengthening the enforcement machinery, simplification of the
procedure relating to coverage and revisions, the linkage of the rates with the
Consumer PriceIndex Numbers, involvement of the rural workers' organisations in
the implementation of the provisions are among the steps advocated to improve the


The necessary amendments in the statutory provisions are likely to

be initiated soon. Sufficient strengthening of the enforcement
machinery would provide an effective arrangement for better
implementation of the. Minimum Wages Act.
In this context it may be pointed out that this measure coupled with
programmes like National Rural Employment Programme and
Integrated Rural Development etc. would represent a coordinated
and mutually supporting effort for raising large number of rural
poor above the poverty line. Proposals for Central legislation for
agricultural workers


Seventh Five Year Plan (1/2)

Higher labour productivity ensures higher
The creation of employment opportunities in
the large, medium and small-scale industry,
both in the public and private sectors of the
economy to increase the wage output


Seventh Five Year Plan (2/2)

TRYSEM was introduced to provide technical

skills and to upgrade the traditional skills of
rural youth belonging to families below the
poverty line
Wage employment is also introduced in it


Eighth Five Year Plan (1/3)

A statutory provision of minimum wages for

employments has been included in the schedule
to the Minimum Wages Act, 1948
For implementation of minimum wages
workers' organisations, non-governmental
voluntary organisations and organised trade
unions also ensures minimum wages, instead of
solely relying on the official enforcement

Eighth Five Year Plan (2/3)

Khadi and village industries were created to provide

additional employment opportunities in the non-farm
sector and to ensure increased wages/earnings to
rural workers
Handloom industry seek to encourage employment
generation, ensure reasonable wages for weavers,
supply of hank yarn at reasonable prices, establish
silk yarn bank, set up marketing infrastructure, help
export development, etc

Eighth Five Year Plan (3/3)

New marketing approaches for artisans

was introduced so that their wage


Ninth Five Year plan

The improvement of labour welfare with increasing

productivity and provision of a reasonable level of social
The Minimum Wages Act, 1948 is primarily applicable to
unorganized sector and empowers both central and
State Governments to fix the minimum rates of wages
Under Minimum Wages Act, 1948 no wage is fixed
below Rs. 35 per day
Minimum wages can offer greater potential for income
transfers then special employment generation schemes


Tenth Five Year Plan

It covers extensive policies for women workers

Wage bill is expected to grow
The increase in productivity of labour should be
reflected in higher growth of real wages
The rise in the real wages of casual labour only
cannot be a conclusive evidence either of an increase
in the real income or of tightening of labour market
when the incidence of unemployment has not
reduced, and has rather gone up

Government Initiatives

Sampoorna Grameen Rozgar Yojana (SGRY)

Jai Prakash Rozgar Guarantee Yojana (JPRGY)
Vocational training for women
equal pay for equal work concept


Eleventh Five Year Plan

Shift the surplus labour from agriculture to high wage

non agricultural sector
Increase in male casual labour wages
Real wages stagnated or declined for workers in the
organized industry although managerial and technical
staff did secure large increase
Wage share in the organized industrial sector has halved
after the 1980s



Continued manufacturing and service industry helped for regular

salary wage
Employment opportunity for casual wage worker has slowed
The incidence of poverty among the regular wage/salaried
workers is much lower (around 11%) as compared to the casual
labour (32%) and the self employed workers (17%)
Efforts should be made to increase the regular wage/salaried jobs


Women and Wage

Women have vulnerable position when they seek regular wage jobs
in the unorganized or even in the private organized sector, in urban
areas due to inequality
Women have low wage rate than male for comparable occupations
Equality can be seen in various sectors like
IT and enabled services sectors
Education and health


Migrant Workers and Wages

Supply of Migrant labour come from the states

as source have low wages
To protect their interest government passed the
bill The Unorganized Workers Social Security
Bill, 2007 in the Rajya Sabha


Casual wage Employee or Self


They account for 83% of work force

Their strength lies in occupational skills and to
negotiate for labour price
Shift in pattern from agriculture to nonagriculture sector due high wage


Service Sector and Wage

Unique opportunity to grow due to its labour

cost advantage, reflecting one of the lowest
salary and wage levels in the world coupled with
a rising share of working age population
Two initiatives required

Fostering the establishment of a viable size for

delivery of services based on labour intensive
A massive skill development effort

Success of Labour Policy

It can be seen in terms of the number of regular wage

employment opportunities based on some form of a
written contract between the employer and the employee,
that is, an increase in the number of formal jobs
Change in policy need to accessed by

Linking incentive benefits in terms of employment and wage

Formal employment



Regular wage employment mode, is a critical

factor in improving the quality of employment
of the workers hired by the unorganized
Protective measures for employees in
unorganized sector

A statutory national minimum wage for all workers


Scheduled Caste and Wage

60%still depend on wage labour

Employment rate and labour earnings are also
Discrimination by caste in cities also for low
Large number of SC and STs depend on
agriculture wage thus government needs to
revise wages every five year


Initiatives taken by government for poor are

Sampurna Grameen Rozgar Yojana
Creation of infrastructure
Increasing labour productivity through technology change
and innovation is the main route for the creation of
additional wealth to enterprises and better wages to
NREGAsoft is used to collect workers database and wages


Social Security

Social security will be treated as an inclusive concept that also

covers housing, safe drinking water, sanitation, health ,
educational, and cultural facilities for the society at large
It is necessary to ensure living wages, distinct from the
concept of minimum wages, which can guarantee the workers
a decent life
ESI has existing wage limit of Rs.10,000 per month


Social Security

A national policy for fixing minimum wages would be

crystallized and made effective
Discrimination in wages based on gender and age would be
An information network will also be built to promote awareness,
to educate employers (some of whom do alternate as wage labour
too), and to prevent malpractices (perpetrated by design or by
ignorance) with the help of the media, NGOs, and PRIs


Thank You