New Delhi: Despite economic growth and gradual formalization of the workforce, low wages and wage growth remain key challenges with 57% of regular employees earning ₹ 10,000 or less a month, a new report published on Tuesday by Azim Premji University revealed.

The State of Working India report said people earning ₹ 50,000 or more constitute just 1.6% of the Indian workforce. “The key measure of the quality of jobs is, perhaps, how remunerative they are. Broadly speaking, wage levels have remained low and have grown slowly over the last three decades."

“Even among regular wage workers, more than half (57%) have monthly average earnings of ₹ 10,000 or less, well under the Seventh Central Pay Commission (CPC) minimum stipulated salary of ₹ 18,000 per month. As for casual workers, 59% have monthly earnings of up to ₹ 5,000," it added.

While the average monthly salary of regular workers was at ₹ 13,562, non-regular workers earned ₹ 5,853 per month. “This can probably account for the extremely high demand for government employment seen all over the country," it said.

The report went on to add that between 2000 and 2015, real wages grew in every sector. In agriculture and un-organized manufacturing and services, the compounded annual growth rate (CAGR) was about 3%.

Interestingly, wage growth in organized manufacturing has been slower than that in the unorganized sector, resulting in a narrowing of wage gap among organized and unorganized sector employees. In the most recent period, from 2010 to 2015, real wages grew faster, at a CAGR of 2% for organized manufacturing, 4% for unorganized manufacturing, and 5% for unorganized services, the report added.

The services sector was key for employment generation and annual wage in the sector grew by 5% between 2011 and 2015, higher than unorganized manufacturing. The report, however, noted that the average salary is much below the central pay commission Group D salary.

The report reiterated that India has been struggling to convert its high economic growth into jobs growth. Currently, a 10% increase in GDP results in less than 1% increase in employment, it said. “In the 1970s and 1980s, when GDP growth was around 3-4%, employment growth was around 2% per annum. Since the 1990s, and, particularly in the 2000s, GDP growth has accelerated to 7%, but employment growth has slowed to 1%, or even less."

Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.

Share Via