JAMIA MILLIA ISLAMIA

Faculty of law

SEMINAR-I ASSIGNEMNT

Topic: Laws regarding removal of financial disability and poverty in

India

Submitted to

Richa Khare

Submitted by -
Aasd Khan

B.A.LL.B (Hons) Self- Finace

9th Semester

Batch-2019-2024
 ACKNOWLEDGEMENT

I would like to express my special thanks to my teacher Richa Khare Ma’am

who gave me the golden opportunity to prepare assignment on the topic “Laws

regarding removal of financial disability and poverty in India”. In the process

of doing this assignment I did a lot of research and came across much valuable

information for which I am very thankful to my ma’am. I would also like to

thanks my friend who helped me to complete this assignment within limited

time frame.

Asad khan
B.A.LL.B (S/F)
9th SEMESTER
 Contents
INTRODUCTION ............................................................................. 2

LITERATURE REVIEW ................................................................. 4

RESEARCH METHODOLOGY ..................................................... 6

RESEARCH QUESTIONS ............................................................... 6

HISTORICAL ROOTS OF POVERTY IN INDIA ......................... 7

POVERTY LINE IN INDIA ............................................................. 8

COVID 19 IMPACTS OVER POVERTY IN INDIA ..................... 9

CAUSES OF POVERTY ................................................................. 10

GLOBALIZATION ........................................................................ 11

ESTIMATES OF POVERTY.......................................................... 12

WHY DO POOR BECOME VICTIMS OF CRIME? .................. 19

THEORIES REGARDING POVERTY ........................................ 20

NEED FOR POVERTY LAW IN INDIA ....................................... 21

CONSTITUTION OF INDIA AND POOR .................................... 22

SCHEMES BY GOVERNMENT ................................................... 24

LABOUR LEGISLATIONS ........................................................... 33

THE MINIMUM WAGES ACT 1948............................................. 33

PAYMENT OF WAGES ACT 1936 ................................................ 47

WORKMEN COMPENSATION ACT 1923 ................................. 56

IMPACT OF THESE MEASURES ................................................ 63

CONCLUSION ................................................................................ 64

BIBLIOGRAPHY ............................................................................ 66
 Abstract
India is home to more than 40 crore poor people who lack the means to access

the consumption basket that serves as the standard of living. 83.3% of these

were located in rural areas. 33% of the world's poorest people live in India and

are considered to be subhuman. Given that one of the main goals of the

development planning process has been to eradicate poverty, such a high

incidence of poverty is cause for concern. Yes, poverty is a global problem. Its

elimination is regarded as essential to humanity's effort to achieve sustainable

development. Reduction of poverty in India is, therefore, vital for the

attainment of national and international goals. Agricultural wage earners, small

and marginal farmers and casual workers engaged in non agricultural activities,

constitute the bulk of the rural poor. Small land holdings and their low

productivity are the cause of poverty among households dependent on land-

based activities for their livelihood. Poor educational base and lack of other

vocational skills also perpetuate poverty. Due to the poor physical and social

capital base, a large proportion of the people are forced to seek employment in

vocations with extremely low levels of productivity and wages. The creation of

employment opportunities for the unskilled workforce has been a major

challenge for development planners and administrators.

Poverty alleviation has been one of the guiding principles of the planning

process in India. India’s anti-poverty strategy for urban and rural areas has

three broad strands; promotion of economic growth; human development and

targeted programmes to address the multidimensional nature of poverty. The

1|Page
role of economic growth in providing more employment avenues to the

population has been clearly recognized. The growth-oriented approach has

been reinforced by focusing on specific sectors which provide greater

opportunities to the people to participate in the growth process. The various

dimensions of poverty relating to health, education and other basic services

have been progressively internalized in the planning process. Central and state

governments have considerably enhanced allocations for the provision of

education, health, sanitation and other facilities which promote capacity-

building and well-being of the poor. Investments in agriculture, area

development programmes and afforestation provide avenues for employment

and income. Special programmes have been taken up but there no change in the

life of Indian people. In the light of the above discussion in the present paper I

have tried to focus the actual to poverty in India and also the efforts of the

union government and its consequences. This assignment focuses on poverty

alleviation measures taken by the government. It also includes the various

labour legislation which deals with poverty reduction.

Keywords: Poverty, equality, participation and non-discrimination,

accountability, development, opportunities, poverty alleviation, inclusion,

legislation, judiciary, agriculture.

2|Page
INTODUCTION

Over 40 crore impoverished people live in India, yet they lack the means to

access the consumption basket that serves as the benchmark for poverty. Given

that one of the main goals of the development planning process has been to

eradicate poverty, such a high incidence of poverty is cause for concern.

Poverty is, in fact, a global problem. The goal of sustainable development for

humanity is viewed as requiring its eradication. Therefore, reducing poverty in

India is essential for achieving both national and global objectives.

The majority of the rural poor are wage earners in agriculture, small and

marginal farmers, and casual employees involved in non-agricultural

enterprises. For households that depend on land-based activities for their

livelihood, poverty is caused by small landholdings and their low productivity.

Poverty is also sustained by a weak educational foundation and a lack of other

practical skills.

A huge percentage of the population is compelled to seek employment in

professions with incredibly low levels of productivity and earnings because of

the weak physical and social capital base. For those responsible for planning

and implementing development projects, creating employment possibilities for

the unskilled workforce has been a significant concern. One of the main themes

of India's planning process has been the reduction of poverty. The three main

pillars of India's anti-poverty policy for urban and rural areas are human

development, economic growth promotion, and tailored programmes to address

the multifaceted character of poverty. Economic expansion has a noticeable

impact on the population's access to greater employment opportunities.

The growth-oriented strategy has been strengthened by a focus on particular

industries that give individuals more possibilities to take part in the growing

process. Planning has gradually integrated the numerous aspects of poverty

3|Page
 related to health, education, and other fundamental services.

The allocations made by the federal and state governments for the provision of

facilities that support the development of the poor's capacity and general well-

being have been significantly increased. Investments in agriculture, community

development initiatives, and afforestation open doors to employment and

financial security. The welfare of the disabled, scheduled castes, scheduled

tribes, and other disadvantaged populations is the focus of special initiatives. The

third strand of the larger anti-poverty approach combines public works programmes

that help people cope with temporary hardship with anti-poverty initiatives that aim

to transfer assets and skills to people for self-employment. The Designated Public

Appropriation Framework (TPDS) shields the poor from the unfavorable impacts of

ascend in costs and guarantees food and nourishment security at reasonable costs.

The last ten years of the 20th century in India have seen a discernible shift in the

focus of improvement planning, from the straightforward expansion of labor and

product creation, and the resulting development of per capita pay, to planning for

upgrade of human prosperity. The idea of human well-being itself is more broadly

conceived to include not only the consumption of goods and services in general, but

also to specifically ensure that the basic material needs of all segments of the

population, especially those below the poverty line, are met and that they have

access to basic services like health and education. Because of this strategy, poverty

has decreased and overall quality of life has improved

4|Page
LITERATURE REVIEW

For the present research on poverty and poverty alleviation programs in India,

the researcher has gone through the number of reference books, Journals,

annual reports, press notes, as well as various kinds of publications. To study

the concept of poverty was a very herculious task. It would not have been

possible to study it without the previous material on this topic. There are many

studies of poverty in India as well as overseas. This kind of research is essential

for an analysis of poverty and its various aspects and effects on human life. As

far as India is concerned the following studies were reviewed by me-

1) Dandekar, V.M. and N. Rath -‘Poverty in India’ Economic and Political

weekly (1971).

2) P.K Bardhan, Labor and Rural Poverty: The Political Economy of Develop-

ment in India.
3) B.S Minhas, L.R Jain, The Incidence of Urban Poverty in States.

4) P.D Ojha, Estimates of Poverty ,2016.

Some of the points of these researches were relevant for my research work.

I have also referred

1) A Sen, Poverty and Famines, ‘An Essay on Entitlement and Deprivation’,

Oxford University Press,1983.

2) Krishna, Meeta, ‘Poverty Alleviation and Rural Poor’, Mittal Publications,

New Delhi, 2015.

3) S.K Mishra, Labour and Industrial laws, Central law publications,

Prayagraj, 2019.

4) Mukesh Eshwaran and Ashok Kotwal, Why Poverty Persists in India: A

Framework for Understanding the Indian Economy, Oxford University

5|Page
 press, London 1997.

5) S R Myneni, Law and poverty, Allahabad law agency, Faridabad, 2019.

Some of the chapters of these books were relevant for of my research work.

India is one of the progressive country in the world but still significant number

of people are living below poverty line so that I found it necessary to study

poverty in India. For this I went through many of the poverty alleviation

schemes launched by the Central Government as well labour legislations which

deals with the benefit given to poor labour class.

In addition to this I have also inserted some of the facts from relevant websites

which were necessary for my research like-

6|Page
5)

7|Page
 POVERTY ANALYSIS IN INDIA (www.legalservicesindia.com).

1) POVERTY IN INDIA (www.bloomberg.com).

2) CONDITION OF POOR IN INDIA (blog.ipleaders.in).

RESEARCH METHODOLOGY

The study was done using the Doctrinal Research Methodology, which uses a

descriptive and analytical approach to analysis. Numerous books and online

sources have been consulted while conducting studies on the topic. To con-

duct a thorough investigation into the project's subject, all analysis and justifi-

cations have been considered. The project topic has been developed, to the

best of my knowledge, based on the informations offered.

For my project, I have consulted a wide range of additional sources, such as

websites, legal journals, and newspapers. All relevant information on my

subject that I could find across the various sources I used, has been

incorporated.

RESEARCH QUESTIONS

The study deals with certain research questions which are as follows:

1. How lack of legal awareness in the poor leads them to exploitation?

2. Why poor people are more prone to crimes also why this section of the

society is more involved in crimes?

3. How the legal empowerment of the poor can be done?

4. What are the measures undertaken by the Indian government to curb

poverty and issues related to that?

5. What are the impact of these measures?

8|Page
 HISTORICAL ROOTS OF POVERTY IN
INDIA

In the colonial period, India had a huge number of poor people but a few were

hungry that means people had enough resources to fulfil their basic needs and

requirements and poverty became one dimensional phenomena i.e. only about

hunger and food. But as we all know that poverty is a multidimensional

phenomena and food cannot be the only concern India was termed as poor.

Then the British introduced rigorous tax collection policies which are very

detrimental for the poor like the one who were not able to pay the taxes due to

any certain reasons like famine, either their lands were captured or they were

made the slaves of the British officers till the repayment of the taxes which was

a vicious cycle. Also zamindari laws were enacted which further made the

things worse. In this way the middle class became poor and the poor became

poorer. Poverty however was neither inevitable nor natural, being direct

consequence of British rule especially the land revenue policy. Law and order

was further was never in the favour of the poor section of the society.

In the post independence era a new class of poor came into picture which are

'urban poor'. Even though there were urban poor before they were not a big

issue as it became after independence. After independence the cities were

expanding at a fast pace and people's migration from rural areas to urban

increased in search of job or in search of better standard of living. As more and

more people make this migration the space left to accommodate them becomes

less and less. Given the present lack of affordable housings the migrated people

started informal settlements which are also termed as slums and the lack of

9|Page
opportunities and skill training of the working age population compelled them

to be in this situation.

POVERTY LINE IN INDIA

India has a sizable part of the world's poor. A poverty line serves as a threshold

to separate those who are poor from those who are not. The official poverty line

is based on the amount of money required to give each person a specific

minimum amount of calories each day. This topic has generated a lot of

discussion and disagreement over the years.

The Government of India's Planning Commission calculates the quantity and

percentage of the poor in both urban and rural areas. It has been asserted that

the percentage of the impoverished has decreased gradually over time. But how

poverty is defined affects how much people are living in it. Currently, the

poverty line establishes a norm for per capita consumption or income based on

a minimum standard of living, and individuals who fall below the threshold are

classified as "poor." Government has a social responsibility to end poverty by

creating appropriate policies and successfully implementing them. The purpose

of a poverty line is to monitor changes in poverty and evaluate the effectiveness

of poverty-reduction measures.1

1
A Sen, Poverty and Famines An Essay on Entitlement and Deprivation (Oxford University Press

,London, 3rd edn.,1983)

10 | P a g e
The trend clearly shows that although there is decline in poverty over the years,

but the impact of pandemic has again changed the dynamic. Now the

downward trend has again started moving upward.

COVID 19 IMPACTS OVER POVERTY

IN INDIA
The COVID-19 pandemic has caused vast monetary failure, lack of jobs and

homelessness. These outcomes have created huge problems for India. 12

months after the beginning of the pandemic, there were a record 7 million

jobs misplaced. Indian families have misplaced approximately 7% of totality of

their income.

“We’re speaking approximately about a decade of misplaced possibilities and

setbacks, until there are a few massive reforms and essential adjustments within

the manner that monetary coverage is done, you’re now no longer going to

be everywhere near what we noticed within the growth years. A lot of effort

is to manifest so as to get back to the 7% to 8% increase that we desperately

11 | P a g e
need,” said Brown University Fellow Arvind Subramanian in an interview with

Bloomberg.2

Unemployment has traditionally peaked in India way to the pandemic, and

GDP should keep dropping. Even earlier than the COVID pandemic, In-

dia was having problem with its poor economic system. The Indi-

an authorities were taking steps to deliver the country’s economic sys-

tem up considerably through the 12 action plans over the years. COVID-19 in

India has triggered many setbacks to this plan.

CAUSES OF POVERTY
Due to the structure of economy prevailing in India, there exists a huge gap in

Incomes among Due to the structure of economy prevailing in India, there

exists a huge gap in Incomes among the rich and the poor. Not only that,

government policies is directed in a way that focuses upon the rich and the

poor. Not only that, government policies is directed in a way that focuses upon

kind of people, rich and the poor; as a result of which the so called gap between

the rich and the kind of people, rich and the poor; as a result of which the so

called gap between the rich and the poor remains the same always. Poor

remains the same always.

There are numerous reasons behind the existence of such deep roots of poverty

in India. There are numerous reasons behind the existence of such deep roots of

poverty in India.3

2
Poverty in India, India, available at: http://www.bloomberg.com (last visited on October 23, 2022).
3
Poverty analysis, India, available at: http://www.legalserviceindia.com (last visited on November 12,
2022).

12 | P a g e
Of the post-independence reforms that have achieved the most in terms of

reducing poverty of the post-independence reforms that have achieved the most

in terms of reducing poverty in India, land reforms get the winning prize. By

suppressing intermediaries, simplifying and in India, land reforms get the

winning prize. By suppressing intermediaries, simplifying and standardizing

the system of tenancy, production relations were made more efficient and rural

standardizing the system of tenancy, production relations were made more

efficient and rural wages went up. But if they had actually redistributed the

land - as opposed to preserving the wages went up. But if they had actually

redistributed the land - as opposed to preserving the nearly- feudal system plus

incentives and subsidies for big land owners they could have nearly feudal

system plus incentives and subsidies for big land owners they could have really

eradicated one of the causes of poverty in India.4

GLOBALIZATION

1991 was the year that India embraced globalization and started, like many

India embraced globalization and started, like many countries, its market

countries, its market liberalization coupled with privatization and deregulation

while ensuring macroeconomic liberalization coupled with privatization and

deregulation while ensuring macroeconomic stability. 5China has been one of

the few countries that have successfully managed stability. China has been one

of the few countries that have successfully managed their transition to the

global market; the picture is more mixed with India, with lots of ups their

transition to the global market, the picture is more mixed with India, with lots

of ups and downs.

4
Supra note 3
5
A. Verma, Poverty alleviation programmes in India : a study ( Lambert Academic Publishing, Ger-
many , 1st edn.,2015).

13 | P a g e
 ESTIMATES OF POVERTY
Ojha’s Estimate of Poverty6

Mr. P.D. Ojha estimated the number of persons below the poverty line on the

basis of an average calorie intake of 2.250 per capita per day. This entailed

monthly per capita consumption expenditure of Rs. 15-18 (1960-61) in urban

areas and of Rs. 8-11 in rural areas. On this basis, Ojha estimated that 184

million persons in the in the rural areas (51.8 per cent of total rural population)

and 6 million persons in the urban areas (7.6 per cent of urban population)

lived below the poverty line. For the country as a whole, 190 million persons

(44 per cent of total population) could be classed as poor in 1960-61. For 1967-

68, Ojha estimated that 289 million persons (70 per cent of the rural population)

lived below poverty line.

Dandekar and Rath’s Estimate of Poverty 7

Dr. V.M. Dandekar and Mr. Nilkantha Rath estimated the value of the diet with

2,250 calories as the desired minimum level of nutrition. They suggested that

whereas the Planning commission accepts Rs. 20 per capita per month (or Rs.

240 per annum) as the minimum desirable standard, it would not be fair to use

this figure for both the urban and the rural areas. Dandekar and Rath, therefore,

suggested somewhat lower minimum for rural population i.e., Rs. 180 per

capita per annum and a somewhat higher minimum Rs. 270 per capita per

annum for the urban population at 1960-61 prices. However, at 1968-69 prices,

the corresponding figures for the rural and urban population work out to be Rs.

6
P. D Ojha, “Estimates of Poverty” Journal of O P School of Economics 211 (2016).
7
Dandekar and Rath, “On how to Estimate poverty levels in India” Glasglow School of Economics
journal (2006).

14 | P a g e
324 and Rs. 486 per capita per annum Interpolating at this basis Dandekar and

Rath estimated that in 1968-69 about 40 per cent of rural population (i.e., 166

million) and a little more than 50 per cent of the urban population (i.e, 49

million) lived below the poverty line. The total number of persons living below

the poverty line showed an increase from 1960-61 to 216 million in 1968- 69,

but there was no change in the percentage of rural and urban poor to the

population in the two years it stood at 41 per cent.

Minhas Study of Rural Poor Another estimate made by B.S.Minha on the basis

of NSS data revealed that if one regards the level of per capita annual

consumption expenditure as the bare minimum, then 50 6 per cent of the

population lived below the poverty line in 1967-68. During the period 1956-57

and 1967-68, the proportion below the poverty line among the rural poor seems

to have fallen in good harvest years but shot up again in bad harvest years.

However, there has been a steady decline in the proportion of people below the

poverty line, i.e., from 65 per cent in 1956-57 to 50.6 per cent in 1967-68. In

other works, we had around 210 million poor people in rural areas in 1967-68,

and the corresponding number in the earlier years varied between 206 and 221

million.

Bardhan’s Study of Rural Poor8

Dr. P.K. Bardhan questioned the validity of the GNP deflator used by Dr B S.
Minha in his study. Bardhan suggested the use of agricultural labour price

index as a more suitable deflator. His main argument was that the national

income deflator covers both the agricultural and manufactured commodities

and as such it is very likely to understate the rise in prices paid by the rural

poor because the budget of the poor in the rural areas includes a much smaller

8
Poverty Measurement, India, available at: http://economicdiscussions.net (last modified on June
28, 2021).

15 | P a g e
proportion of the manufactures than the national average. Bardhan considered

Rs. 15 at 1960-61 prices to be the national minimum as it was a conservative

approximation to the minimum standard fixed by the Planning Commission’s

Study. Bardhan's study brought out the conclusion the percentage of rural

people below the poverty line as defined above has gone up from 38 per cent in

1960-61 to 54 per cent in 1968-69.

Montek Ahluwalia’s Study of Rural Poverty9

Montek Ahluwalia studied the trends in incidence of rural poverty in India for

the period 1956-57 to 1973-74 .He used the same concept of poverty line i.e.,

an expenditure level of Rs. 15 in 1960-61 prices for rural areas and Rs. 20 per

person for urban areas. The most important feature of Montek Ahluwalia’s

study is the marked fluctuation over time in the extent or incidence of rural

poverty. The proportion of rural poverty declined initially from over 50 per cent

in the mid-fifties to around 40 per cent in 1960- 61, rose sharply through the

mid-sixties, reaching a peak in 1967-68, and then declined again.

Gaurav Datt and Martin Ravallions’ study on Poverty Line and Poverty

Gap10

Gaurav Datt and Martin Ravallions’ are developed the concept of poverty gap

along with the poverty line. The authors have also used Rs. 89 as the poverty

line. Since all NSS data on consumption expenditure are in current local prices,

the study has used rural interstate price relatives (ratio of rural prices in a state

to all India Prices) for 1973-74 constructed by Bhattacharya updated to 1983

using Consumer Price Index for agricultural labourers as the rural price deflator.

9
Supra note 8.
10
Ibid.

16 | P a g e
Similarly, consumer price Index for Industrial Workers the interstate price

relatives for urban areas. According to his study, 43.9 per cent of the population

was below the poverty line 40.9 per cent of urban population and 45 per cent of

the rural population was reckoned as poor in 1983. He measured poverty gap as

the distance from the poverty line of average consumption expenditure of the

poor in each state as a proportion of the national poverty line.

B.S. Minhas, L.R.Jain and S.D.Tendulkar’s Study of Incidence of Poverty

in India11

B.S. Minhas, L.R.Jain and S.D.Tendulkar made a study of incidence of poverty

for the period 1970- 71 to 1987-88 with the help of NSS data, using adjusted

price relatives of the consumers’ price index series for agricultural labourers

(CPIIW) for rural areas and the combined price relatives’ data of consumer

price index for industrial workers (CPIIW) and for non-manual employees

(CPINM) for urban areas. The data have been processed for 20 states and on

that basis, the all-India Headcount Ratios of the poor have been computed and

the inter-state variations have been worked out. The study revealed) the

incidence of poverty in rural India declined from 58.8 per cent 1970-71 to 50.8

per cent in 1983 and further to 48.7 per cent in 1987- 88. In the urban sector,

the corresponding decline in the incidence of poverty was from 46.2 per cent

1970-71 to 39.7 per cent in 1983 and to 37.8 per cent in 1987-88. For rural and

urban India taken together, the incidence of poverty declined from 56.3 per

cent in 1970-71 to 48.1 per cent in 1983 and further to 45.9 per cent in 1987-88.

ii) The absolute numbers of the rural poor rose from 258 million in 1987-88. In

urban India, the numbers of the poor rose from 50 million in 1970-71 to 77

11
Supra note 8.

17 | P a g e
million in 1987-88. For the Indian union as a whole, the population in poverty

grew from 308 million in 1970-71 to 361 million in 1987-88.

iii) For India as a whole, the population of the poor grew at the annual rate of

about 0.9 per cent between 1970-71 and 1987-88, which may be compared with

the overall growth rate of population of around 2.2 per cent since 1971. This

implies that development and poverty alleviation programmes did have a

healthy effect in reducing the growth rate of the population of the poor.

Planning Commission Expert Group Report12

The planning Commission constituted in September 1989 an Expert Group

under the chairmanship of Prof. D.T. Lakdawala to consider methodological

and computational aspects of estimation of proportion and number of poor in

india and it was submitted its report in July 1993. Taking into account various

consideration, the poverty line recommended by the Task Force on projection

of minimum needs and effective consumption demand, namely a monthly per

capita total expenditure of Rs. 49.09 in rural and Rs. 56.64 in urban rounded

respectively to Rs. 49 and Rs. 57 at all-India level at 1973-74 prices be adopted

as the base line.

Prof. S. D. Tendulkar Estimation of Poverty13

Former Chief Economic Adviser to Prime Minister, Prof. S.D.Tendulkar

submitted the report of the Expert Group to Review the Methodology for

Estimation of Poverty in November 2009. Prof. Tendulkar noted that the

existing all-India rural and urban official poverty lines were originally defined

12
Supra note 8.
13
Poverty Estimation in India, India, available at: http://economicshub.net (last modified on April 2,
2022).

18 | P a g e
in terms of per capita total consumer expenditure (PCTE) at 1973-74 market

price and adjusted over time and across states for changes in prices keeping

unchanged the original 1973-74 rural and urban underlying all-India reference

poverty line baskets (PLB) of goods and services. These all-India rural and

urban PLBs were derived for rural and urban areas separately, anchored in the

per capita calorie norms of 2400 (rural) and 2100 (urban) per day.

However, they covered the consumption of all the goods and services

incorporated in the rural and urban reference poverty line baskets. On the basis

of new methodology adopted, Prof. Tendulkar, finds that in 2004-05, 37 per

cent of Indian population was living below poverty line. This figure is

significantly high as compared to figure of given by planning commission;

according to which 27.5 per cent were living below poverty line. The Planning

Commission of India has accepted the Tendulkar Committee report which says

that 37 per cent of people in India live below the poverty line (BPL). The All

India HCR has declined by 7.3 percentage points from 37.2 per cent in 2004-05

to 29.8 per cent in 2009-10, with rural poverty declining by 8.0 percentage

points from 41.8% to 33.8 per cent and urban poverty declining by 4.8

percentage points from 25.7 per cent to 20.9 per cent.

Guruswamy and Abraham’s study 14

Mohan Guruswamy and Ronald Joseph Abraham have highlighted the

distinction between poverty and hunger. According to their poverty is an

economic condition. Hunger is a physical condition that arises out of severe

economic condition. While the definition of hunger in terms of calories can

remain constant, the definition of poverty is relative to the present levels of

14
Supra Note 13.

19 | P a g e
general prosperity. The present official is based only on calories (650 grams of

food grains per day) and hence accounts for little else but the sanitation of

one’s hunger. It would have been more accurate to define this as a starvation

line as that is exactly what it is. Guruswamy and Abraham have made the

following components of basic human needs to arrive at a new poverty line for

India which is claimed to be one of the fastest developing economies of world

i.e., Nutritional Norms and Cost involved, expenditure on health, expenditure

on clothing, energy consumption, and miscellaneous expenditure.

The minimum costs on the assumption of basic needs approach work out to be

Rs. 840 per month or Rs. 4,200 per month per family; balanced nutritious diet

Rs. 573; health insurance expenditure Rs. 30; clothing Rs. 17; energy

consumption Rs. 55 and miscellaneous expenditure Rs. 164. On the basis of the

holistic approach regarding the poverty line inclusive of basic needs,

Guruswamy has calculated that 69 per cent of India’s population is below the

poverty line i.e, over 71 crore persons. This has to be seen against the official

figure of 26 per cent persons below the poverty line i.e, nearly 2.65 times. The

situation in rural India is appalling with 84 per cent of the rural population

below the more holistic poverty line, it is certainly better in urban India at

around 42 per cent.

World Bank Report

Poverty in India is widespread, with the nation estimated to have a third of the

world's poor. In 2010, the World Bank reported that 32.7 per cent of the total

Indian people fallen below the international poverty line of US$ 1.25 per day

(PPP) while 68.7 per cent live on less than US$ 2 per day.

20 | P a g e
 United Nations Development Programme15

According to 2010 data from the United Nations Development Programme, an

estimated 29.8% of Indians live below the country's national poverty line.

Oxford Poverty and Human Development Initiative16

A study by the Oxford Poverty and Human Development Initiative using a

Multidimensional Poverty Index (MPI) found that there were 650 million

people (53.7 per cent of population) living in poverty in India, of which 340

million people (28.6 per cent of the population) were living in severe poverty,

and that a further 198 million people (16.4 per cent of the population) were

vulnerable to poverty.

421 million of the poor are concentrated in eight North Indian and East Indian

states of Bihar, Chattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan,

Uttar Pradesh and West Bengal. This number is higher than the 410 million

poor living in the 26 poorest African nations. The states are listed below in

increasing order of poverty based on the Multi-dimensional Poverty Index.

WHY DO POOR BECOME VICTIMS OF

CRIME?
The poor are more likely to be the victims of the crimes than other

economically sound individuals. They become victims of the crimes sometimes

because of the greed of other people; they are used as a means. For example if

a drug peddler wants to supply the drug he/she might need someone who could

take the risk to face legal proceedings if caught, so he might offer a certain

15
United nations estimate , available at: https://www.un.org (last modified on August 2, 2022).
16
Oxford Poverty and Human Development Initiative, United Kingdom , available at:
https://www.ox.ac.uk (last modified on May 21, 2022).

21 | P a g e
amount of money to a poor individual and the poor would agree to perform the

crime.17

When they are caught they don't have money to represent them in the court and

hence has to face conviction.18 Sometimes they do the crime when they know

the objective of the person asking and sometimes they don't even know that

they are going to be the part of the crime scene.

Even one of the honourable SC judge once said:

The main cause of crime is poverty. As long as you have poverty, you'll have

crime. Most of the people you will find in jail in India, in America or in any

other country are poor. Unless you create a social and political order in which

everybody gets decent life, which means proper employment, proper income,

healthcare, education and nutritious food for the children, you cannot abolish

crime. Our aim is to create a more politically and economically favourable

situation for all in the country.

The poor can be of different income levels, different caste, class, or anything

which distinguishes them but they all suffer from one thing that is poverty itself.

People are very clear about what they want it is the policymakers or the law

makers to make them legally empowered. Protecting poor from crime is not

only sending habitual offenders to the prison but also to lower the term of

punishment for them.

THEORIES REGARDING POVERTY

There have been many theories on poverty; these have addressed the causes of

poverty as well as ways to reduce or eliminate it. One of the first hypotheses

for reducing poverty was the trickle-down theory. There was a presumption

17
Poor and the law, India, available at: https://www.legalservicesindia.conm (last visited on October

22 | P a g e
that when a county experiences large-scale growth, the advantages will

naturally accrue to all sections, including the weaker and poorer sections,

therefore there was really no need for special programmes for the

underprivileged and backward sections of society. This theory somewhat

matched Gandhi's notion of trusteeship in society. It was believed that after a

particular segment of society had evolved, they would distribute the additional

benefits to the less fortunate people.

But it wasn't until much later that policymakers began to realise that this notion

is utopian and can never be implemented on a wide scale in the majority of

countries, particularly developing ones. Therefore, unless there were specific

programmes designed to assist them, the advantages would never reach the

weaker portions.

The World Bank, which initially supported the trickle-down theory, later

switched to a more practical two-pronged strategy that aimed to both increase

the productivity of the poor and provide them with more effective public

services.

NEED FOR POVERTY LAW IN INDIA

Before delving deep into this subject, we should tend to initially per-

ceive the connection between impoverishment associate degreed educations.

Poor youngsters are seldom given a solid education, and as a result, adults

from an equivalent socioeconomic level are denied steady and applicable jobs

albeit children begin faculty at an early age, circumstances force them to drop

out and work for his or her family’s survival, inflicting them to stay within

the same social stratum as their parents.19

19
Supra note 2.

23 | P a g e
Poverty robs folks of the many requirements that others regard granted. This is

often one in every of the causes why the poor have interaction in

such misappropriated activities: they need to possess access to opportunities

and materials that they need been denied for a protracted time. As a re-

sult, folks resort to illicit means that to fulfill their demands, that contributes to

crimes admire burglary, theft, robbery, assault, rape, & tried rape, among oth-

ers.

The justice system regards them as criminals instead of poor people as a result

of them committed the crime and met all of the conditions for being a crimi-

nal. Impoverishment has very little impact or what you call no impact on

crime, nevertheless crime will keep people poor attributable to factors such as

a listing and education. We tend to cannot erase crime unless we develop a so-

cial and social group in which everybody incorporates a smart existence, which

incorporates correct employment, proper income, healthcare, education,

and biological process food for children.

CONSTITUTION OF INDIA AND POOR

The question of the role of law combating poverty is a primary question.

Constitution of India is the supreme commander of law in India and the makers

of constitution had this concern that each and every citizen has right to be

developed and uplifted and hence they had made the provisions for the same.

Though poverty as a term has not been mentioned in the Indian Constitution,

the Preamble, the Fundamental Rights and the Directive Principles of State

Policy stand affirmation to the welfare state mode.20

Article 21 Protection of life and personal liberty:

20
Dr J.N Pandey, Constitutional law of India (Central law Agency, Prayagraj, 56th edn.,2019).

24 | P a g e
No person shall be deprived of his life or personal liberty except according to

procedure established by law. Life is not just survival it means to live with

dignity. Also right to life is a human right and not even state can take this right
21
away from its citizens unless procedure established by the law. It also

includes right to livelihood as held by the SC in Board of Trustees of the Port

of Bombay v. Dilipkumar Raghavendranath Nandkarni22, Supreme Court held

that right to life under article 21 also includes right to livelihood.

Further in Pavement Dwellers Case23 court observed that:

The sweep of the right to life conferred by Art.21 is wide and far-reaching. It

does not mean, merely that life cannot be extinguished or taken away as, for

example, by the imposition and execution of death sentence, except according

to procedure established by law. That is but one aspect if the right to life. An

equally important facet of the right to life is the right to livelihood because no

person can live without the means of livelihood.

Article 39A (5) Equal justice and free legal aid:

The State shall secure that the operation of the legal system promotes justice,

on a basis of equal opportunity, and shall, in particular, provide free legal aid,

by suitable legislation or schemes or in any other way, to ensure that

opportunities for securing justice are not denied to any citizen by reason of

economic or other disabilities. Every party to the case has lawful access to the

court to present their cases but the proceedings require payment of court fees

and assistance of skilled lawyer.

The poor cannot easily afford the hefty fees so an amendment was done in

article 39 of Constitution of India which states that legal system should provide

free legal aid to those who need it so that they get equal number of
21
Ibid.
22
AIR 1983 SC 109.
23
AIR 1986 SC 180.

25 | P a g e
opportunities to present themselves in the court and the justice is therefore not

denied to any citizen by the reason of economic disability.

In Sheela Barse v. State of Maharashtra24 case the court observed that it is

necessary to provide free legal aid to the poor who are arrested to represent

themselves in front of the judiciary as it their fundamental right under article 14

and article 21, apart from Article 39A. The court also held that the prisoners

should be allowed to meet any lawyer appointed by the legal committee with

respect to any subject matter.

Article 15 and 16:

These articles of Constitution of India provide the power to the state to make

special provisions for the backward caste and sections of the society. They

contain provisions for reservation for socially, educationally and economically

weaker section of the society in state owned institutions and government jobs.

The Union Government launches several schemes for the citizens of India from

time to time.

SCHEMES BY GOVERNMENT

The schemes launched by the Union Government which concentrates on

providing benefits for an individual are the Union Government Schemes for

Individuals in India. They are launched for the purpose of improving the

livelihood of the people and providing security for leading a better life. Each

scheme is launched to provide benefits to the individual in certain areas of their

life. Some schemes grant financial security while others aim to provide socio-

economic measures. The beneficiaries covered under most of the individual

schemes are the rural people, urban poor, low-income families, economically

24
JT 1988 (3) 15.

26 | P a g e
backward sections or weaker sections of the society. The list of Union

Government Schemes for Individuals in India is stated below.

Atal Pension Yojana

Atal Pension Yojana was passed in the Union Budget of 2015-16.by the then

Honorable Finance Minister, Mr Arun Jaitley. This scheme is a pension scheme

which aims at providing pension to the unorganised sector of the society such

as the maids, gardeners, delivery boys, etc. Even the Private sector employees

or employees who work in an organisation which does not provide pension

benefits to them can also apply for this scheme.

Atal Pension Yojana is administered by the Pension Fund Regulatory and

Development Authority (PFRDA). This scheme provides options for getting a

fixed pension starting from Rs.1000 to Rs.5000 on attaining the age of 60 years.

The individuals who can avail this scheme must be between the age of 18 and

40 and should contribute for a minimum of 20 years.

Unnat Jeevan by Affordable LEDs and Appliances for All (UJALA)

The Government of India introduced the Unnat Jeevan by Affordable LEDs and

Appliances for All Scheme in 2015. This scheme is implemented by the Energy

Efficiency Services Limited, a joint venture of four Public Sector Undertakings

under the Ministry of Power. This scheme enables the price-sensitive customers

to buy LEDs at affordable rates.

This scheme aims to promote every household to have LED-powered

appliances. This scheme is of utmost importance to enable the country’s

broad base of price-sensitive customers to purchase LEDs at affordable rates.

27 | P a g e
Every domestic household in the country can obtain the benefits under this

scheme if they have a metered connection from their respective Electricity

Distribution Company.

Ayushman Bharat Yojana

Ayushman Bharat Yojana is a health protection scheme which provides health

insurance to the citizens of India. It was launched on 23 September 2018. It is

an initiative under the existing National Health Protection Scheme and also

referred to as Ayushman Bharat – National Health Protection Scheme (AB-

NHPS).

Under this scheme, insurance coverage of up to Rs.5 lakh on a family floater

basis is provided to the beneficiaries every year. The insurance coverage

provided is for receiving primary, secondary, and tertiary healthcare services.

The poor deprived rural families and identified occupational category of urban

workers’ families based on the Socio-Economic Caste Census (SECC) are

eligible to avail this scheme as beneficiaries.

Grameen Kaushalya Yojana or DDU-GKY

Deen Dayal Upadhyaya Grameen Kaushalya Yojana is a part of another

scheme,i.e. National Rural Livelihood Mission scheme. This scheme was

announced on 25 September 2014 by the Ministry of Rural Development. This

scheme was launched to provide training, employment and placement for jobs

to the poor rural youth between the age of 15 and 35. Even the unemployed

rural youth or anyone who earns a daily wage doing odd jobs with even a little

bit of schooling is eligible for obtaining training and employment under this

scheme.

28 | P a g e
 Pradhan Mantri Gramin Awaas Yojana
Pradhan Mantri Awaas Yojana-Gramin, previously the Indira Awaas Yojana

scheme, came into effect from 1 April 2016. This scheme was effected for

addressing the gaps in the rural housing program and for achieving the

Government’s commitment to providing “Housing for Al l ’’ by 2022.

This scheme aims to provide a pucca house which has all the necessary

amenities to the houseless and to the households living in kutcha and

dilapidated houses. The beneficiaries under this scheme are all the houseless

and households living in zero, one or two-room houses with kutcha hall and

kutcha roof as per SECC (Socio-Economic and Caste Census) data.

Pradhan Mantri Matritva Vandana Yojana

Pradhan Mantri Matritva Vandana Yojana is a social welfare scheme introduced

in the year 2017. This scheme is implemented under the Ministry of Women

and Child Development. This scheme provides a direct cash benefit to the

pregnant and lactating mothers who are above the age of 19 for the birth of

their first living child.

Pradhan Mantri Matritva Vandana Yojana covers all pregnant women or

lactating mothers except those employed with the Government or those who

receive similar benefits under some other law for the time being. But this

scheme covers only those women whose pregnancies commence after

01.01.2017.

29 | P a g e
 Deen Dayal Upadhyaya Antyodaya Yojana

Deen Dayal Upadhyaya Antyodaya Yojana (DDUAY) is the integration of two

Government schemes,i.e. National Urban Livelihoods Mission (NULM) and

National Rural Livelihoods Mission (NRLM). The Ministry of Housing and

Urban Poverty Alleviation launched NULM. The Ministry of Rural

Development launched NRLM in June 2011. The aim of DDUAY is the

upliftment of the urban and rural poor by providing them skill development and

enhancement of their sustainable livelihood opportunities.

NULM is implemented for the reduction of poverty and vulnerability of the

urban poor households. NRLM provides effective and efficient institutional

platforms to the rural poor for providing improved access to financial services

and increasing their household income through sustainable livelihood

opportunities.

Pradhan Mantri Adarsh Gram Yojana

Pradhan Mantri Adarsh Gram Yojana is a rural development programme to

empower the deprived sections of society. The Central Government of India

launched this scheme in the financial year 2009-10. It comes under the

Ministry of Social Justice and Empowerment. The objective under this scheme

is for making the villages of our country a model village having a physical and

social infrastructure which helps in socio-economic development.

It aims to eliminate the disparity between SCs and other communities in the

area of literacy rate, infant mortality rate/maternal mortality rate, the

completion rate of elementary education and ownership of productive assets.

This scheme targets the development of villages that have a higher ratio (over

50%) of people belonging to the scheduled castes.

30 | P a g e
 Pradhan Mantri Kaushal Vikas Yojna

Pradhan Mantri Kaushal Vikas Yojna was launched in 2015 by the Ministry of

Skill Development and Entrepreneurship. The objective of this scheme is for

providing Indian youth with industry-relevant skill training which will help

them to achieve a better livelihood. Even the individuals with existing skill sets

can be assessed and provided with a certificate under the Recognition of Prior

Learning. The school or college dropouts or the unemployed youth who have a

valid ID and bank account can avail the skill training and employment

opportunities under this scheme.

Pradhan Mantri Suraksha Bima Yojana

Pradhan Mantri Suraksha Bima Yojana is one of the three social security

schemes that was announced by the Government in the Union Budget of 2015-

16. This scheme offers a one-year accidental death and disability cover, which

is renewed every year. The individual bank account holders of the age group

between 18 and 70 are eligible to apply for this scheme. The risk coverage

provided under this scheme is for accidental death and full disability is Rs.2

lakh. It also provides a cover of Rs.1 lakh for partial disability.

Pradhan Mantri Jeevan Jyoti Bima Yojana

Pradhan Mantri Jeevan Jyoti Bima Yojna is one of the three social security

schemes announced by the Government in the Union Budget of 2015-16. It is a

life insurance scheme which provides insurance on the sudden demise of the

policyholder. Any individual who has a savings bank account of the age group

between 18 and 50 are eligible for this scheme. The life cover under this

scheme is Rs.2 lakh to the beneficiary of the policyholder, in case of his demise.

31 | P a g e
 Pradhan Mantri Jan Dhan Yojana
Pradhan Mantri Jan Dhan Yojana is a nationwide scheme launched by the

Government of India in August 2014. The objective of this scheme is to ensure

financial inclusion of every individual who is not having a bank account in

India. It aims at providing access to financial services i.e. Banking/Savings and

Deposit Accounts, Credit, Remittance, Pension and Insurance in an affordable

manner to all. An individual can open an account under this scheme with any

bank branch or Business Correspondent (Bank Mitra) outlet with zero balance.

Pradhan Mantri Awas Yojana

Pradhan Mantri Awas Yojana is a social welfare flagship programme of the

Indian Government which was launched in the year 2015. The objective of this

scheme is for providing housing at an affordable price to the weaker sections of

the society, urban poor, rural poor and lower-income group people.

This scheme aims to construct around 20 million houses at an affordable price

by 31 March 2022. The beneficiaries under this ‘Housing for All Scheme’

are the economically weaker sections of the society, which includes the low-

income groups, middle-income groups and slum dwellers.

Antyodaya Anna Yojana

Antyodaya Anna Yojana was launched in December 2000 for implementing the

TPDS more beneficially and for providing food grains to the right category of

the population. The Targeted Public Distribution System (TDPS) aims to

provide food and grains to the needy. This Government scheme provides highly

subsidised food to around one crore poorest of the poorest families from

amongst the Below Poverty Line (BPL) families in India.

32 | P a g e
 MGNREGA

The Mahatma Gandhi National Rural Employment Guarantee Act

(MGNREGA) has the following objectives:

1) Provide 100 days of guaranteed wage employment to rural unskilled la-

bour

2) Increase economic security

3) Decrease migration of labour from rural to urban areas

MGNREGA differentiates itself from earlier welfare schemes by taking a

grassroots-driven approach to employment generation. The programs under the

act are demand-driven and provide legal provisions for appeal in the case, work

is not provided or payments are delayed. The scheme is funded by the central

government which bears the full cost of unskilled labour and 75% of the cost of

material for works undertaken under this law. The central and state govern-

ments audit the works undertaken under this act through annual reports pre-

pared by CEGC (Central Employment Guarantee Council) and the SEGC

(State Employment Guarantee Councils). These reports have to be presented by

the incumbent government in the legislature.

A few salient features of the scheme are:

• It gives a significant amount of control to the Gram Panchayats for man-

aging public works, strengthening Panchayati Raj Institutions. Gram Sa-

bhas are free to accept or reject recommendations from Intermediate and

District Panchayats.

• It incorporates accountability in its operational guidelines and ensures

compliance and transparency at all levels.

33 | P a g e
Ever since the scheme was implemented, the number of jobs has increased by

240% in the past 10 years. The scheme has been successful in enhancing eco-

nomic empowerment in rural India and helping overcome the exploitation of

labour. The scheme has also diminished wage volatility and the gender pay gap

in labour. This can be substantiated the by the following data available at the

official site of MGNREGA:

1. 14.88 crores MGNREGA job cards have been issued (Active Job Cards –
9.3 crores)

2. 28.83 crores workers who gained employed under MGNREGA (2020-

21) out of which active workers are 14.49 crores.

Pradhan Mantri Ujjwala Yojana

Pradhan Mantri Ujjwala Yojana is a social welfare scheme launched by the

Government on 1 May 2016. It is a scheme by the Ministry of Petroleum and

Natural Gas for providing LPG connections to women belonging from the

Below Poverty Line (BPL) household. LPG connections are provided at a

concessional rate to the women living below the poverty line under this scheme.

This scheme aims to envisage a smoke-free Rural India by providing LPG

connections to the entire nation and benefit around five crore families. Any

adult woman belonging to a low-income family who does not have an LPG

connection in her household is considered as an eligible beneficiary under this

scheme.

Swamitva Yojana

The Swamitva Yojana aims to provide an integrated property validation

solution for rural India. Under this scheme, a property card is created and

issued for each house of the village by the Government. The Honourable Prime

34 | P a g e
Minister, Shri Narendra Modi launched the physical distribution of property

cards under the‘Survey of Villages and Mapping with Improvised Technology

in Village Areas’ (SVAMITVA) scheme on 11 October 2020.

This scheme aims to provide a certificate of ownership of the property to the

people of the village which is mapped by the Government. The Government

can also do a digital survey of the village using drones in the villages to grant

ownership certificates for the eligible people. Through this scheme, the people

living in rural areas can obtain bank loans on their village property.

THE MINIMUM WAGES ACT 1948

The Minimum Wages Act, 1948 envisages to provide a minimum statutory

wages for scheduled employments with a view to obviate the chances of

exploitation of labour through payment of very low and sweating wages. The

Act also provides for the maximum daily working hours, weekly rest day and

overtime. Rates fixed under Minimum Wages Act prevail over the rates fixed

under award/agreement. The Act applies to all establishments employing one or

more persons and engaged in any Scheduled employment. The State

Governments have been empowered to fix rates of wages for different classes

of employees -skilled, unskilled, clerical, supervisory, etc. employed in any

Scheduled employment and to review and revise the same from time to time,

the interval between two revisions not to exceed five years, considering the

change in price index and dearness allowance. 25

25
S.N Mishra, Labour and Industrial Law (Central Law Agency, prayagraj, 15th edn, 2019).

35 | P a g e
 OBJECT AND SCOPE
The main objective of this Act, is fixing a minimum rate of wages in number

of industries where the labours are not organized and sweated labours are most

dominant.26 The Act aims at preventing the exploitation of workers or labours

in some industries, for which, the appropriate Government is empowered to

take steps to prescribe minimum rates of wages in certain employment.27 The

Minimum Wages Fixing Machinery convention was held at Geneva in the year

1928 by ILo (International Labour organisation) with reference to remuneration

of workers in those industries where the, level of wages was substantially low

and the labour was vulnerable to exploitation, being not well organised and

having less effective bargaining power. This Act may be called the Minimum

Wages Act 1948.The Act enables the Central and State Government to fix

minimum rates of wages payable to employees in selected number of ’sweated’

industries. The Act extends to the whole of India.

CONCEPT OF MINIMUM WAGE, FAIR WAGE, LIVING WAGE AND

NEEDS BASED MINIMUM WAGE

Wages have been classified into three categories:

(1) Living wages

(2) Minimum wages

(3) Fair wages

LIVING WAGES
Living wages has been defined differently by different people in different

countries. The best definition is given by Justice Higgins which reads "Living

wage is a wage sufficient to ensure the workman food, shelter, clothing, frugal

comfort, provision for evil days etc. as regard for the skill of an artisan, if he is

26
Ibid.
27
Ibid.

36 | P a g e
one".28 According to Fair Wages Committee Report: "The living wage should

enable the male earner to provide himself and his family not merely the basic

essentials of food, clothing and shelter but a measure of frugal comfort

including education for the children, protection against ill-health, requirement

of essential social needs and measures of insurance against old age." Thus

living wages means the provision for the bare necessities plus certain amenities

considered necessary for the wellbeing of the workers in terms of his social

status. Article 43 of the Constitution of India states that the state shall

endeavour to secure by suitable legislation or economic organisation or in any

other way to all workers a living wage, conditions of work ensuring a decent

standard of life and full enjoyment of pleasure and social and cultural

opportunities. Thus, Government of India has adopted as one of the directives

of the principle of slate policy to ensure living wages.

MINIMUM WAGES
The minimum wage may be defined as the lowest wage necessary to maintain a

worker and his family at the minimum level of subsistence, which includes

food, clothing and shelter. When the government fixes minimum wage in a

particular trade, the main objective is not to control or determine wages in

general but to prevent the employment of workers at a wage below an amount

necessary to maintain the worker at the minimum level of subsistence.

Minimum wage in a country is fixed by the government in consultation with

business organisations and trade unions. The law relating to the minimum wage

either states definitely the wage considered to the minimum or the

determination of the wage left to an administrative commission which from

28
Labour laws in India, India, available at: http://www.legalservicesindia.com (last modified on June
24, 2022).

37 | P a g e
time to time determines the minimum wage according to the varying economic

conditions, e.g., variation in the price level should be compensated with the

variation in the wage rates because the prime aim of the minimum wage low is

just to cover "minimum living cost." The authority entrusted with the task of

fixing of minimum wage should consider such factors as local economic

conditions, transportation cost and the size of the units in the industry in fixing

minimum wages.29 The Government of India passed a Minimum Wage Act in

1948 under which farm labourers were to be paid a minimum wage between 66

paise and Rs. 1.5o per day, keeping in view local costs and standards of living.

Since conditions in various parts of the country were different, the law allowed

different rates of wages to be fixed in a poor country such as India. In practice,

it was very difficult to enforce minimum wages effectively. Fortunately, the

recent inflationary situation had pushed up the rural wages much above the

minimum wages fixed by law. Minimum wages legislation is supposed to have

the following benefits:

(i) These laws prevent unscrupulous employers from exploiting igno-

rant persons who possess very little bargaining power.

(ii) (ii) These abolish the competition of the lower strata of workers with

the upper grades and tend to prevent depressing of wages.

(iii) (iii) The productivity of industry is increased by foreign employers

to use the most efficient production methods and the most modern

equipment, in order lo enable employees to earn the living wage. But

at the same time, the workers are stimulated to increase his efficien-

cy in order to hold his job. (iv) Employer with high standards are

protected against underselling by competitors with low standards.

But some critics of the minimum wage assert that it is impossible for
29
Supra note 25.

38 | P a g e
 a group of men to control the wages of labour by law because wages

depend upon the supply and demand of labour.

Minimum wages are a heavy burden to the society because persons unable to

earn a living wage will be unemployed whereas earning of small wage is

preferred to idleness or living on charity. However, basically, minimum wage

laws are not wrong if they are wisely framed and applied. It is perfectly

feasible to fix a minimum wage and forbid employment below that figure.

Some industries that cannot profitably pay the wages fixed may be forced to

wind up because of the financial burden. But, then, what is the use of an

industry if it cannot even pay a living wages to its workers and it is better to

dispense with it. Industries that can pay a living wage should, if necessary be

forced to do so. The difficulties to be encountered are rather those of practical

operation. The administration of the modern industry is very tedious due to the

complexity of the wage system. However, if the wage limit is fixed at the very

lowest minimum, the risk is slight. Fair Wages—A fair wage is something more

than the minimum wages. Fair wage is a mean between the living wage and the

minimum wage. While the lower limit of the fair wage must obviously be the

minimum wage, the upper limit is the capacity of the industry to pay fair wage

compares reasonably with the average payment of similar task in other trades

or occupations requiring the same amount of ability. Fair wage depends on the

present economic position as well as on its future prospects.

Thus the fair wages depends upon the following factors:

a) Minimum Wages

b) Capacity of the industry to pay

c) Prevailing rates of wages in the same or similar occupations in the same

or neighbouring localities

39 | P a g e
 d) Productivity of labour

e) Level of national income and its distribution.

f) The place of the industry in the economy of the country.

CONSITUTIONAL VALIDITY OF MINIMUM WAGES ACT 1948

India introduced the Minimum Wages Act in 1948, giving both the Central
government and State government jurisdiction in fixing wages. The act is
legally non-binding, but statutory. Payment of wages below the minimum wage
rate amounts to forced labour. Wage Boards are set up to review the industry’s
capacity to pay and fix minimum wages such that they at least cover a family
of four’s requirements of calories, shelter, clothing, education, medical
assistance, and entertainment. Under the law, wage rates in scheduled
employments differ across states, sectors, skills, regions and occupations owing
to difference in costs of living, regional industries' capacity to pay,
consumption patterns, etc. Hence, there is no single uniform minimum wage
rate across the country and the structure has become overly complex. The act is
not unreasonable: It can scarcely be disputed that securing of living wages to
labourers which ensure not only bare physical subsistence but also the
maintenance of health and decency is conducive to the general interest of the
public.30 This is one of the directive principles of the state policy embodied in
Article 43 of the constitution. Individual employers might find it difficult to
carry on the business on the basis of minimum wages fixed under the Act but
this must be not be the entire premise and reason to strike down the law itself
as unreasonable.31 “The restrictions, though they interfere to some extent with
the freedom of trade or business guaranteed under Article 19(1)(g) of the
constitution, are reasonable and , being imposed on the general interest of the
general public, are protected by the terms of the clause (6) of the article 19.”

30
Supra note 20.
31
Ibid.

40 | P a g e
This quote is a part of judgment in the case “ Gulmuhommad Tarasaheb , a
bidi factory by its proprietors Shamrao v. State of Bombay 32 ,. Another
important judgment that favours and supports the constitutional valitity of the
Minimum Wages Act, 1948 is Unichonoyi v. State of Kerala33. This case raised
the same questions which were raised in the case of Gulmuhommad Tarasaheb
v. State of Bombay34, that can a state be prevented from making any law, in the
interest of general public, where it creates restrictions and interferes to some
extent with the freedom of trade or business guaranteed under Article19(1)(g) ,
of the Constitution of India, and it was held that , “ Fixation of minimum wages
is for preservation of public order , and if no minimum wage is fixed then it
shall lead to arbitrariness by the employers and that shall lead to clashes of
interest between employer and labour which shall cause friction in society”.
The article 14 of the Indian Constitution which relates to equality before the
law, it must be noted that minimum wages are not fixed equally across the
whole nation but they vary from occupation to occupation and industry to
industry and from place to place. The case of Uchinoy v. State of Kerala35,
further quotes the following, As regards to the procedure for fixing of the
minimum wages, the ‘appropriate government’ has undoubtedly been given
very large powers , but it has to take into consideration, before fixing wages,
the advice of the committee if one is appointed on the representations on
proposals made by persons who are likely to be affected thereby. The various
provisions constitute an adequate safeguard against any hasty or capricious
decision by the ‘appropriate government’. In suitable cases, the ‘appropriate
government’ has also been given the power of granting exemptions from the
operations of the provisions of the Act. There is no provision undoubtedly, for a
further review of the decision of the appropriate government , but that itself

32
AIR 1962 Bom 97.
33
AIR 1962 SC 12.
34
Supra note 32.
35
Supra note 33.

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would not make the provisions of the act unreasonable”. (B) The Act doesn't
violate Article 14 of the Indian Constitution. “on a careful examination of the
various of the Act and the machinery setup by this Act, Section 3(3)(iv) neither
contravene Article19(1) of the constitution nor does it infringe the equal
protection clause of the constitution. the Courts have also held that the
constitution of the committees and the Advisory Board did not contravene the
statutory provisions in that behalf prescribed by the legislature”,- this was held
in the case of Bhikusa Yamasa Kshatriya v. Sangammar Akola Bidi Kamgar
Union36, Further , as decided in the case “ , it added to the above mentioned
case that , nor the reason that two different procedures are provided for
collecting information . Notification fixing different rates of minimum wages
for different localities is not discriminatory. where the fixation of rates of
wages and their revision were manifestly preceded by a detailed survey and
enquiry and the rates were brought into force after a full consideration of the
representations which were made by a section of the employers concerned, it
would be difficult in the circumstances to hold that notification which fixed
different rates of minimum wages for different localities was not based on
intelligent differentia having a rational nexus with the object of the Act, and
thereby violated article 14. when the Government issued notification improving
upon the existing minimum wages as revised minimum wages disregarding the
contrary report of the committee appointed under Section 5-1(a) ; such
notification was bad under the law and was to be made inoperative.”. As
pointed out by one of the India’s Union Labour and Employment Minister Shri
Mallikarjuna Kharage ;, “The variation of minimum wages between the states
is due to differences in socio-economic and agro-climatic conditions, prices of
essential commodities, paying capacity, productivity and local conditions
influencing the wage rate. The regional disparity in minimum wages is also
attributed to the fact that both the Central and the State Governments are the

36
AIR 1965 BOMLR 764.

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appropriate Governments to fix, revise and enforce minimum wages in
Scheduled employments in their respective jurisdictions under the Act”.
Referring the case of N.M.Wadia Charitable Hospital v. State of Maharashtra37,
it was decided by the Court that – “ Fixing different minimum wages for
different localities is permitted under the constitution and under labour laws ,
hence the question that any proviso of the Minimum Wages Act is in any way
against the proviso of constitution is wrong. The constitution of India accepts
the responsibility of the State to create an economic order, in which every
citizen finds employment and receives a “fair wage”. This made it necessary to
quantify or lay down clear criteria to identify fair wage. Therefore, a Central
Advisory Council, in its first session in November 1948, appointed a tripartite
Committee on Fair Wages. The committee consisted of representatives of
employers, employees, and the Government. Their task was to enquire into and
report on the subject of fair wages to the labour. Sanctity of the Minimum
Wage Act Supreme Court in three separate rulings has held that non payment of
minimum wages is tantamount to ‘forced labour’ prohibited under Article 23 of
the Constitution. The Supreme Court holds that ‘forced labour’ may arise in
several ways, including “compulsion arising from hunger and poverty, want
and destitution”. In Sanjit Roy V. State of Rajasthan 38, the Supreme Court held
that the Exemption Act in so far as it excluded the applicability of the
Minimum Wages Act 1948 to the workmen employed in famine relief work is
“clearly violative” of Article 23. Thus even public works ostensibly initiated by
the government for the sole purpose of providing employment are subject to the
Minimum Wage Act. Drawing on the Supreme Court rulings, Andhra High
Court set aside the Government of India (GoI) notification mandating that
prevailing state minimum wage be paid. This has been underscored in the legal
opinion provided by Additional Solicitor General, Ms. Indira Jaising, to the

37
(1993) IIILLJ 536 Bom.
38
AIR 1983 SC 328.

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Central Employment Guarantee Council (CEGC) Working Group on Wages
where she made it clear that using Section 6(1) to allow a payment of less than
minimum wage in MGNREGA works will amount to forced labour. 15 eminent
jurists and lawyers of India too have asked Government of India to
immediately revoke its unconstitutional notification and ensure that minimum
wages are paid to all workers in India. The Act and the judgments are in favour
of equality provided under Article 14 of the Constitution and a judgement in
the case namely, Engineering Workers Union v. Union of India39., pronounces
the judgment that, “The provision under Section 3(2)(A), that minimum rate of
wages in scheduled employment fixed or revised, shall not apply to the
employees during the period of adjudication, violated equality clause of Article
14 and hence that section is void”. In the view of the Directive Principles of
State Policy as contained in the Article 43 of the Indian Constitution, it is
beyond doubt that securing of living wages to labourers which ensures not only
bare physical subsistence but also the maintenance of health and decency it is
conducive to the general interest of the public.
FIXATION AND REVISION OF WAGES
The fixation and revision of wages falls under the Sec 3, Sec 4 and sec 5. Sec 3

deals with, the appropriate government fix the minimum wages that is payable

to the employees in any scheduled employment. The sec 4 describes on the

contents of minimum wages. Sec 5 lays down the procedure for fixing and

revising the minimum rates of wages. Minimum Number of Employees: The

appropriate government can forbear from fixing minimum rate of wages of any

scheduled employment in which there are less than 1,000 employees in the

organization. But if the appropriate government find after an inquiry that there

are more than 1,000 employees in any scheduled employment, it shall fix the

minimum rate of wages payable as soon as after the finding.

39
1991 (62) FLR 846.

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 FIXING OF MINIMUM RATES OF WAGES (Sec. 3)
Under sec 3, the appropriate Government fix the minimum rate of wages .The

appropriate government

a) shall fix the minimum rate of wages payable to the employees employed

in the employment specified in Part I or part II of the schedule( the schedule

is reproduced at the end of the unit) and in an employment to either by

notification in official Gazette.

b) The employees employed in the employment specified in Part II of the

schedule (the schedule is reproduced at the end of the unit), fix the

minimum rate of wage for apart of the state or for any specified class,

instead of fixing the minimum rate of wages for the whole state.

c) Shall review the minimum rate of wages so fixed and revise the same , at

such intervals not exceeding 5 years.

MINIMUM RATES
The Appropriate Government may fix:

a) A minimum rate of wages for time work (hereinafter referred to as "a

minimum time rate");

b) A minimum rate of wages for piece work (hereinafter referred to as "a

minimum piece rate");

c) A minimum rate of remuneration to apply in the case of employees

employed on piece work for the purpose of securing to such employees a

minimum rate of wages on a time work basis (hereinafter referred to as "a

guaranteed time rate");

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 d) A minimum rate (whether time rate or piece rate) to apply in substitution

for the minimum rate which would otherwise be applicable in respect of

overtime work done by employees (hereinafter referred to as "over time

rate").

DIFFERENT RATES OF MINIMUM WAGES

The different minimum rates of wages may be fixed for

a. different scheduled employments;

b. different classes of work in the scheduled employment;

c. adults, adolescents, children and apprentice;

MINIMUM RATES OF WAGES (SECTION 4)

The appropriate governments fix or revise minimum rate of wages may

consists of a a basic rate of wages and special allowance b. a basic rate of

wages with or with the cost of living allowance c. an all inclusive rate allowing

for the basic rate, the cost of living allowance and the cash value of the

concessions.40

PROCEDURE FOR FIXING AND REVISING MINIMUM WAGES

(SEC 5)

There are two separate modes of procedure for fixing and revising minimum

wages under sec 5.the main object of both the procedures is to enable the

government to reach a balanced conclusion with regard to fixation of a

minimum wage. The two modes are as follows: a. Mode one: Appointment of

Committee: The appropriate government should appoint as many committees

or sub-committees as to hold necessary inquires for fixation of minimum rates

of wages. b. Mode two: Publication of proposals in the official gazette: The

40
Supra note 36.

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appropriate government shall by notification in the official Gazette, publish its

proposals for the information of the person who is likely to be affected by the

fixation of minimum rates of wages.

PROCEDURE FOR HEARING AND DECIDING CLAIMS

The Appropriate Government can appoint by notification in the official Gazette

an inspector (sec 19). The inspector can within his local limit -

a) Enter at all reasonable hours, with such assistant ( if any ) or any local or

other public authority ,as think fit any premises or place of premises where

employees are employed or for the purpose of examining any register,

record of wages or notices required to be kept;

b) Examine any person he find in such premises or depending on any

reasonable causes believe is an employee or an employee who given out his

work from therein;

c) Require any person giving out work or any out-workers to give any

information, which in his power to give with respect to the names and

addresses of the persons from or to whom the work is given out or received

and with respect to the payment to be made for the work.

d) Seize or takes copies of the register, record of wages or notices in respect

of any offence under the Act. 41

e) Exercise such other powers as may be prescribed. Within the meaning of

section 175 and 176 under Indian Penal Code, any document or information

given by the inspector shall be deemed to be legally bound.

The inspector shall be deemed to be a public servant within the meaning of

Indian Penal Code.

41
Labour Laws in India, India, available at: https://www.legalservicesindia.com (Last modified on
November 12, 2022).

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The employee can claims for minimum wages (under section 20): The

Appropriate Government may by notification in the official Gazette, appoint

a) any Commissioner for Workmen’s Compensation, or

b) any officer of the Central Government exercising functions as a Labour

Commissioner for any region,

c) any officer of the State Government not below the rank of the Labour

Commissioner or, any other officer. Such person should have an experience

as a judge of a Civil Court or as a stipendiary Magistrate to hear or decide

any claims arising out of the payment of less than the minimum rates of

wages.

Again for any claims of the employees under section 3, the employees himself

or any legal practitioner or any official of a registered trade union or inspector

can apply to such Authority and the application shall present to them within six

month from the date on which the minimum wages became payable.

After the necessary enquiry, the Authority shall hear the applicant and the

employer and give them opportunity of being heard. If the wages is paid of less

than the minimum rates of wages, than the Authority may asked to the

employer to pay exceed the actual amount which has to pay in addition with

compensation not exceeding ten times the amount of such excess for such act.

In any other case, if the payment become due than the employee will get

together with the payment of such compensation as the Authority may think fit

not exceeding ten rupees. If under this section the Authority hearing any claim

and found that it was either malicious or vexatious, it may direct penalty not

exceeding fifty rupees to the employer by the person presenting the application.

Under this section if any amount is directed to be paid than as if it were a fine

imposed by the Authority as a Magistrate or if he is not Magistrate than to such

person whom the Authority makes application in this behalf as if were a fine

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imposed by such Magistrate. Every direction is final under this section. Every

Authority appointed shall have all powers of a Civil Court under the Code of

Civil Procedure, 1908.

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Conclusion
Every aspect of life has been impacted by the ongoing COVID-19 pandemic,

which is a public health emergency. The Central and State governments' current

top priorities in this situation are safeguarding both people's lives and the

critical infrastructure. Both have rolled up their sleeves to take action against

this pandemic, which has also resulted in the imposition of a nationwide

lockdown from 24 March to 31 May 2020, which has disrupted the informal

economy and caused an unprecedented reverse migration of workers.

Overwhelming negative effects of the COVID-19 crisis have been felt by low-

skilled migrant workers and unofficial workers. According to preliminary data,

there has been a sharp rise in unemployment and a correspondingly sharp

decline in earnings. Over 60% of respondents in urban areas reported not

having enough money for a week's worth of necessities, and almost 80% report

eating less food than they did previously.

The future success of the MNREGA and GKRA schemes will be greatly

influenced by the States' ability to implement their programs, particularly in

their most underdeveloped districts. Additionally, India must expand

MGNREGA, roll out a program for guaranteed urban employment, and

increase cash transfers to low-income households. There is no doubt that the

nation's poverty will get worse, but how much worse?

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 BIBLIOGRAPHY

REFERRED BOOKS-
1) A Sen, Poverty and Famines, ‘An Essay on Entitlement and Deprivation’,

Oxford University Press,1983.

2) Krishna, Meeta, ‘Poverty Alleviation and Rural Poor’, Mittal Publications,

New Delhi, 2015.

3) S.K Mishra, Labour and Industrial laws, Central law publications,

Prayagraj, 2019.

4) Mukesh Eshwaran and Ashok Kotwal, Why Poverty Persists in India: A

Framework for Understanding the Indian Economy, Oxford University

press, London 1997.

5) S R Myneni, Law and poverty, Allahabad law agency, Faridabad, 2019.

REFEREED WEBSITES-
1) www.legalservicesindia.com.

2) www.bloomberg.com

3) blog.ipleaders.in

REFERRED PAPERS-
1) Dandekar, V.M. and N. Rath -‘Poverty in India’ Economic and Political

weekly (1971).

2) P.K Bardhan, Labor and Rural Poverty: The Political Economy of Develop-

ment in India.
3) B.S Minhas, L.R Jain, The Incidence of Urban Poverty in States.

4) P.D Ojha, Estimates of Poverty ,2016.

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