A Guide To Minimum Wage in India - India Briefing News

9/11/23, 12:24 PM A Guide to Minimum Wage in India - India Briefing News
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A Guide to Minimum Wage in India in 2023

August 8, 2023Posted by India BriefingWritten by Dezan Shira & AssociatesReading Time: 7 minutes
Foreign businesses in India can have a challenging time comprehending and calculating the
minimum wage as they differ in every state, and are categorized under multiple criteria, such as
region, industry, skills level, and nature of work.
The minimum wage has for a long time been regulated under the purview of the Minimum Wages
Act, 1948. This will now be subject to the provisions of the Code on Wages Act, 2019, which was
notified in August 2019.
In fact, the Code on Wages Act replaces four labor regulations – Minimum Wages Act, 1948;
Payment of Wages Act, 1936; Payment of Bonus Act, 1965; and Equal Remuneration Act, 1976.
The new wage code prohibits employers from paying workers less than the stipulated minimum
wage. Further, minimum wages must be revised and reviewed by the central and state
government at an interval of not more than five years.
This article will address some frequently asked questions, including how minimum wages are
calculated in India, what is the penalty for non-compliance, and what are some useful resources
that hiring departments in foreign companies may refer to when assessing the country’s labor
costs.
How is the minimum wage calculated in India?

It must be noted that India’s minimum wage and salary structure differs based on the following
factors: state, area within the state based on development level (zone), industry, occupation, and
skill-level. This offers foreign investors a range of options when choosing where to locate their set
up.
https://www.india-briefing.com/news/guide-minimum-wage-india-2023-19406.html/ 1/14
India uses a complex method of setting minimum wages that defines nearly 2,000 different types
of jobs for unskilled workers and over 400 categories of employment, withOther
a minimum daily wage
for each type of job. The monthly minimum wage calculation includes the variable
Briefings ▼ dearness
▼
allowance (VDA) component, which accounts for inflationary trends, that is, the increase or
decrease in the Consumer Price Index (CPI), and where applicable, the house rent allowance
(HRA).
As mentioned earlier, the calculation of the minimum wage factors in the skill-level of the worker
and the nature of their work. Broadly, workers in India are categorized as unskilled, semi-skilled,
skilled, and highly skilled. The minimum wage rates across Indian states and union territories must
therefore be regularly tracked as they are subject to periodic changes, especially for the variable
and dearness allowance rates.
How to Understand Labor Costs in India?

India boasts the most competitive labor costs in Asia, with a national-level minimum daily wage of
approximately INR 178 (equivalent to US$2.15), translating to around INR 5340 (approximately
US$65) per month. It’s important to note that this figure serves as the baseline wage, subject to
adjustments based on factors, such as geographical location and specific criteria.
Regional disparities in minimum wage floors are evident in India. Geographically, the minimum
wage can range from INR 160 (US$1.93) per day in Bihar to INR 423 (US$5.11) per day in Delhi, in
accordance with the Minimum Wages Act of 1948. Specifically, the Kerala region stands out with
the highest minimum daily rates for non-laborers, while other parts of the country maintain
relatively uniform minimum wage levels for such workers.
Minimum Wages for States Across India (per month) (in INR)
State Unskilled Skilled Highly skilled
13,988 17,680 19,188

Andaman and
Nicobar Islands
Effective date: July 1,
2023
Andhra Pradesh 12,344 13,844 14,844
Other
Briefings ▼ ▼
Effective date: April

1, 2023
Arunachal Pradesh 6,600 7,200 NA

1, 2023
Assam 9,246.10 13,430.85 17,265.55

Effective date:
December 1, 2021
Bihar 10,088 12,766 15,600

1, 2023
Chandigarh 12,623 13,298 13,698

Effective date:
October 1, 2022
Chhattisgarh 10,480 11,910 12,690

1, 2023
Dadra and Nagar 9,237.80 9,653.80 NA

Haveli
Effective date:
October 1, 2022
Daman and Diu 9,237.80 9,653.80 NA

Effective date:
October 1, 2022
Delhi 17,234.00 20,903 NA

1, 2023
Other
Briefings ▼ ▼
Goa 10,790 13,728 NA

1, 2023
Gujarat 11,752 12,324 NA

1, 2023
Haryana 10,532.84 12,802.69 13,442.82

Effective date:
January 1, 2023
Himachal Pradesh 11,250 13,062 13,592

1, 2023
Jammu and Kashmir 8,086 12,558 14,352

Effective date:
October 17, 2022
Jharkhand 8,996.34 12,423.87 14,351.39

1, 2023
Karnataka 14424.63 16,858.07 18,260.20

1, 2023
Madhya Pradesh 9,650 11,885 13,185

1, 2023
Maharashtra 12,699 14,310 NA

Effective date:
January 1, 2023
Other
Briefings ▼ ▼
Nagaland 5,280 7,050 NA

Effective date: June
14, 2019
Punjab 10,353.77 12,030.77 13,062.77

Effective date:
March 1, 2023
Rajasthan 6,734 7,358 8,658

2021
Tripura 7,277 8,928 NA

1, 2023
Uttar Pradesh 10,089 12,432 NA

1, 2023
Uttarakhand 9,891 11,078 NA

1, 2023
West Bengal 9,784 11,804 13,023

2023
Source: Simpliance
Tracking by e-commerce firm Picodi.com showed that India’s average minimum wage in 2021 was
US$95, much lower than the Southeast Asian markets of Vietnam (US$160), Thailand (US$220),
and Malaysia (US$258).
Most media report that the average Indian salary for unskilled work ranges between INR 2250
(US$27.17) to a maximum of INR 70,000 (US$845.40) per month, under the Minimum Wages Act.
Other
However, the median monthly salary in India comes at around just INR 29,400
Briefings(US$355.07).
▼ ▼
According to the latest data released by World of Statistics on May 1, 2023, India has an average
monthly wage of INR 46,861 (US$566).
These rates apply very differently among the respective industries – with higher salary wages
reported in skilled professional services industries like software and consultancy work as compared
to manufacturing and construction.
Minimum Wage Data for Central Government as of April 1, 2023 (in INR)
Category Area A Area B Area C
Sweeping and 19,136 16,016 12,844

cleaning
Watch and ward 23,322 21,216 18,070

without arms
Watch and ward 25,298 23,322 21,216

with arms
Construction, 19,136 16,016 12,844

maintenance –
unskilled
Construction, 21,216 18,070 15,002

maintenance – semi
skilled/ supervisory
Construction, 23,322 21,216 18,070

maintenance –
skilled/clerical
Construction, 25,298 23,322 21,216

maintenance – highly
skilled
India’s labor market size

Other
Overall, India’s labor market size is above 471 million as per the World Bank. Consequently,
Briefings ▼ ▼ several
state governments, like Andhra Pradesh, offer tax breaks for companies generating local
employment.
Delhi’s minimum wage: 2023 rates
The Delhi government has announced that effective from April 1, 2023, the wages of unskilled
workers will be increased from INR 16,792 (US$202.63) to INR 17,234 (US$207.97), semi-skilled
workers from INR 18,499 (US$223.23) to INR 18,993 (US$229.19) and skilled workers from INR
20,357 (US$245.65) to INR 20,903 (US$252.24).
The minimum wage rates for supervisor and clerical categories of employees have also been
revised by the city government. The minimum monthly wages of employees who have not
completed their Grade 10 schooling (non-matriculate) is increased from INR 18,499 (US$223.23) to
INR 18,993 (US$229.19) and for matriculate employees from INR 20,357 (US$245.65) to INR 20,903
(US$252.24).
For graduates and those with higher educational qualifications, the monthly wages have been
hiked from INR 22,146 (US$267.24) to INR 22,744 (US$274.46).
Monthly Minimum Wages in Delhi (in INR)
Class of employment Wages (2022) Hike Wages (2023)
Unskilled 16,792 442 17,234
Semi-skilled 18,499 494 18,993
Skilled 20,357 546 20,903
Clerical and 18,499 494 18,993

supervisory staff
(non-matriculate)
Other
Monthly Minimum Wages in Delhi (in INR)
Briefings ▼ ▼
Class of employment Wages (2022) Hike Wages (2023)
Clerical and 20,357 546 20,903

supervisory staff
(matriculate)
Clerical and 22,146 598 22,744

supervisory staff
(graduates and
above)
Is there a non-compliance penalty?
Under the new wage code, the government will appoint inspectors-cum-facilitators to carry out
inspections to ensure that the companies are compliant with the code. The penalty would depend
on the nature of the offense. The maximum penalty is imprisonment for three months and/or a
fine of up to INR 100,000 (US$1,405).
It is important that companies are compliant with the wage norms stipulated by the respective
state government and industry body. Inspections are likely to be more stringent on companies with
foreign investment, especially in the event of any labor unrest.
If workers are paid less than the government declared minimum wages, then they can file a
complaint with the labor inspectorate. The complaint can be filed individually by the worker, or
through a lawyer, or through an official of the registered trade union.
Why India has no national minimum wage

Under the Code on Wages Act, 2019, workers from all industries are entitled to receive minimum
wages fixed by their respective state governments. Matters concerning labor and its welfare come
under the purview of, both, the state and central governments as per constitutional law, thereby
resulting in multi-jurisdictional regulation.
Earlier, only workers from a particular set of industries (40 percent of the entire workers’
population) were entitled to receive minimum wages. Nevertheless, since passing
Other the wage code in
2019, there has been no new development on implementing a national minimumBriefings ▼ wage for▼Indian
workers.
The government has not prioritized the implementation of a minimum wage plan as it is highly
polarizing and would adversely impact employers in the post-pandemic period.
Labor law reforms

Besides addressing wage standards in the country, key labor legislation have also been rolled out
as promised by the central government in the pursuit of labor reforms. Three new labor codes were
approved by India’s parliament on September 22-23, 2020, in a historic move to consolidate the
country’s multiple labor legislation and compliance norms. The new codes are – Industrial Relations
Code Bill, 2020; Code on Social Security Bill, 2020; and the Occupational Safety, Health and
Working Conditions Code Bill, 2020.
The implementation of the labor codes are deferred until all states notify implementing rules.
The four labor codes will bring gig workers and inter-state migrant workers into the ambit of social
security for the first time. This will impact minimum wage considerations, but businesses should
note that they will also make it easier to be flexible in their hiring and firing decisions as well as in
shutting down operations in the country.
For more analysis, read our overview India’s New Labor Codes: A Brief Note for Foreign Investors;
and deep dives India’s New Industrial Relations Code and its Impact on Labor Law and India’s
Occupational Safety, Health and Working Conditions Code, 2020: What is it and How Should
Companies Prepare?
Seeking local expertise is important

Foreign entities doing business in India can learn more about the minimum wages in India through
the Ministry of Labor and Employment database, which provides industry-wise wage norms. The
new wage code can be accessed here, and the website for the chief labor commissioner can be
accessed here.
FIND BUSINESS SUPPORT

Other
Where to locate your investment in India Briefings ▼ ▼
Since determining wages in India is complex, and labor compliances are carefully monitored, it is
recommended to seek advice from a local firm to assess costs and other liabilities. Otherwise the
firm may be exposed to additional risks during times of labor unrest and strikes by workers that
can lead to reputational and financial damage to the company.
For more information and advice for foreign investors on doing business in India, please feel free to
email us at india@dezshira.com.
(This article was originally written on January 22, 2020. It was last updated August 8, 2023.)
About Us
India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors
throughout Asia from offices across the world, including in Delhi and Mumbai. Readers may
write to india@dezshira.com for more support on doing business in in India.
We also maintain offices or have alliance partners assisting foreign investors in Indonesia,
Singapore, Vietnam, Philippines, Malaysia, Thailand, Italy, Germany, and the United States,
in addition to practices in Bangladesh and Russia.
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9/11/23, 12:24 PM A Guide to Minimum Wage in India - India Briefing News

A Guide to Minimum Wage in India in 2023

How is the minimum wage calculated in India?

How to Understand Labor Costs in India?

State Unskilled Skilled Highly skilled

13,988 17,680 19,188

Andhra Pradesh 12,344 13,844 14,844

State Unskilled Skilled Highly skilled

Effective date: April

Arunachal Pradesh 6,600 7,200 NA

Assam 9,246.10 13,430.85 17,265.55

Bihar 10,088 12,766 15,600

Chandigarh 12,623 13,298 13,698

Chhattisgarh 10,480 11,910 12,690

Dadra and Nagar 9,237.80 9,653.80 NA

Daman and Diu 9,237.80 9,653.80 NA

Delhi 17,234.00 20,903 NA

State Unskilled Skilled Highly skilled

Goa 10,790 13,728 NA

Gujarat 11,752 12,324 NA

Haryana 10,532.84 12,802.69 13,442.82

Himachal Pradesh 11,250 13,062 13,592

Jammu and Kashmir 8,086 12,558 14,352

Jharkhand 8,996.34 12,423.87 14,351.39

Karnataka 14424.63 16,858.07 18,260.20

Madhya Pradesh 9,650 11,885 13,185

Maharashtra 12,699 14,310 NA

State Unskilled Skilled Highly skilled

Nagaland 5,280 7,050 NA

Punjab 10,353.77 12,030.77 13,062.77

Rajasthan 6,734 7,358 8,658

Tripura 7,277 8,928 NA

Uttar Pradesh 10,089 12,432 NA

Uttarakhand 9,891 11,078 NA

West Bengal 9,784 11,804 13,023

Category Area A Area B Area C

Sweeping and 19,136 16,016 12,844

Watch and ward 23,322 21,216 18,070

Watch and ward 25,298 23,322 21,216

Construction, 19,136 16,016 12,844

Construction, 21,216 18,070 15,002

Construction, 23,322 21,216 18,070

Construction, 25,298 23,322 21,216

India’s labor market size

Delhi’s minimum wage: 2023 rates

Monthly Minimum Wages in Delhi (in INR)

Class of employment Wages (2022) Hike Wages (2023)

Unskilled 16,792 442 17,234

Semi-skilled 18,499 494 18,993

Skilled 20,357 546 20,903

Clerical and 18,499 494 18,993

Class of employment Wages (2022) Hike Wages (2023)

Clerical and 20,357 546 20,903

Clerical and 22,146 598 22,744

Is there a non-compliance penalty?

Why India has no national minimum wage

Labor law reforms

Seeking local expertise is important

FIND BUSINESS SUPPORT

Previous Article Next Article

Strategic Insights for European

Webinar | Thursday, September 14,

Riccardo Benussi Rohit Kapur