Proposed Revision Of Minimum Wage in Karnataka: Time to implement a Need-Based Minimum Wage?

By Rekha Chakravarthi & Dr. Supriya RoyChowdhury

A recent draft notification by the Government of Karnataka (GOK) to raise the minimum wage for unskilled workers to ₹20,000 per month is an occasion to examine the overall implications of a state-stipulated minimum remuneration. The concept of minimum wage has gone through a long journey in India, with a few notable landmarks.

The Minimum Wage Act, 1948, allowed for ‘a basic rate of wages and an allowance’ referred to as ‘cost of living allowance.’ Thereafter the Industrial Policy Resolution (1948) emphasized ‘fair wage’ and appointed a committee to determine the principles of fair wage. The Fair Wage Committee set the minimum wage as the lower end of a fair wage. The Committee provided a broad framework to determine the minimum wage covering five categories of needs (food, clothing, housing, light and fuel, and other miscellaneous needs) for a family comprising three consumption units (male earner including his wife and two children below the age of 14), and suggested that food consumption should be based on the Dr. W.B. Aykroyd’s formula for diet and nutrition (Jehosh Paul: 2023). In addition, the Committee also differentiated between minimum wage, fair wage and a living wage making the Committee’s recommendations a landmark in the history of wage policy in India. The Fair Wage Committee norms being largely qualitative, the Indian Labour Conference (ILC) was entrusted with the task of translating these norms into quantitative calculations for minimum wage.

Historical Foundations of Minimum Wage in India

The 15th Indian Labour Conference of 1957, headed by a tripartite committee, provided a quantitative basis to calculate minimum wage and was considered “the best approach to estimating the minimum pay as it is a need-based wage calculation that directly costs the requirements, normatively prescribed to ensure a healthy and a dignified standard of living.” It included a family of three consumption units (husband, wife and two children), with an intake of 2,700 calories per day per consumption unit consisting of cereals and pulses, dairy, vegetables and fruits, and meat, fish and eggs; clothing requirements of 65.8 meters per year per family, housing rent as per rent charged for low income groups, and fuel, light and miscellaneous expenses constituting 20 per cent of the total minimum wage. The 15th ILC recognised the minimum wage as need-based, one that allows the worker to meet their human needs. In 1992, a Supreme Court judgment, Workmen v. Reptakos Brett. & Co. Ltd., extended the scope of needs to include children’s education, medical requirement, minimum recreation, including festivals/ceremonies, and life cycles events such as old age, marriage, etc., constituting 25% of the total minimum wage. The Supreme Court observed that, “the wage structure comprising these six components was a minimum wage at the subsistence level” (Jehosh Paul: 2023).

In essence, these norms help us understand that wage determination in India recognises three levels – need-based minimum wage, fair wage and living wage. Need-based minimum wage is to be calculated based on the six criteria laid down by Reptakos Brett Co. judgement, which in turn is based on the recommendations of the 15th ILC. The big gap has been in the implementation and enforcement of a need-based minimum wage in compliance with the two main norms. The gap becomes more pronounced when trade unions and civil society groups, both at the state and national levels, particularly those representing women workers, have struggled to incorporate women’s

equal pay for equal work, as well as women’s unpaid work and care work into the calculations of minimum wage. Minimum wage policies reflect a complex interplay of politics, power of employers, weakness of trade unions and the general tendency of governments to ignore working-class issues in the political economy context of market hegemony vis-à-vis state regulation.

Looking at unskilled workers, who constitute the lowest rung in the labour market, the minimum wage in 2024 ranged widely, from ₹9,956 in West Bengal, ₹17,988 in Delhi, ₹14,610 in Gujarat, ₹11,130 in Tamil Nadu, to ₹15,000 in Kerala and Karnataka. This applies to Zone 1 areas of states, whereas the minimum wage is pegged significantly lower in Zones 2 and 3.

Minimum Wage Versus Actual Earnings

However, it is when we look at the actual wages earned at the lowest levels of the working class, that the functionality of minimum wage is brought into question to some extent. From a recent analysis by Surajit Das and Preksha Mishra of data provided by the Periodic Labour Force Survey (PLFS) July 2023-June 2024, it appears that 27.68% of the workforce earn less than ₹3000 per month, 26% earn between ₹3000 and 9000, 24% earn between ₹9000-15000, and only 22.13% earn above ₹15,000. To add to this, 85% of the female labour force, 91% of the rural female labour force, and 64% of urban females earned less than or equal to ₹300 a day or ₹9000 per month (Outlook Business: 2025). Moreover, women workers in the unorganised sector suffer severe disadvantages in terms of their wage entitlements in the labour market.

Minimum Wages in Karnataka’s Garment Sector

It is against this background that we draw from the recent report ‘The Home and the World of Work: Examining the Intersections of Gender, Labour and Capital in Karnataka’s Apparels Export Industry (CIVIDEP: 2024)’. Globally, India is one of the largest exporters of Readymade Garments (RMG), with Karnataka, Tiruppur and the Delhi NCR region being the three large hubs of export apparels production. In Karnataka there are around 1,500 production units employing more than 500,000 workers, about 85% of whom are women. Women workers are predominantly migrants (both short-distance and long-distance migrants), typically with less than high school education. Except for master tailors, who are usually men, garment work is considered to be unskilled or semi-skilled. A high rate of attrition, whereby women workers frequently leave the job to be quickly replaced by another waiting to find work, demonstrates that minimal, on-the-job training is all that is offered for a work that is repetitive, disconnected from the final product, and largely non-creative.

The minimum wage in the garment industry has had a tortuous journey in Karnataka. In the last decade, the minimum wage for the garment sector was revised in 2010, which, upon non-implementation, was challenged through a Public Interest Litigation (PIL) filed by garment workers’ union. In 2013, the High Court squashed the 2010 notification and ordered the state government to come up with a revised notification. Following this the state government formed a sub-committee under the State Minimum Wage Advisory Board to address the wage issue specifically for the garment industry. However, the sub-committee was abolished in the post- Covid 19 years, and the issue of wage for the garment industry continues to be a subject of the Karnataka State Minimum Advisory Board, a tripartite body that advises the government on fixing and revising minimum wage rates. In February 2018, the government brought out a draft ruling, in which ₹445.69 was announced as the minimum wage for garment workers. Due to pressure by the industry, the minimum wage was later brought down to ₹341.94 per day.

In essence, minimum wage revisions for the garment industry in Karnataka have been subject to the unequal power balance between workers and garment factories.

In addition, a notification by the Government of Karnataka on 4 January, 2025 announced the extension of daily maximum work to 9.5 hours, subject to a maximum of 48-hours a week, as specified under Section 51 (Factories Act 1948), to a large garment manufacturer in Karnataka, with two days of the week as paid holidays. This increase of working hours may well become a model for other garment companies. Although the total weekly working hours remains the same, trade unions have resisted these changes claiming that in a highly intensive work process, longer hours and reduced rest time would place severe physical hardships on workers. The move to increase weekly overtime hours similarly spells trouble for workers, in a context where there is very poor regulation of overtime payment. In our report, 17% of respondents stated that overtime work was often linked to their unfinished work of the day or unscheduled leave they might have taken. As such they received no overtime compensation.

The debate around minimum wage in the garment industry has time and again brought to the surface that wages are indefensibly low in this industry. In a 2018 publication of the National Law School of India University (NLSIU) – Critiquing the Statutory Minimum Wage: A Case of the Export Garment Sector in India – it was calculated that the then average minimum monthly expenditure per family was ₹13,742 in Karnataka. This was based on the expenditure pattern of households whose members worked in the ready-made export garment industry. Yet, the minimum wage at that time was only around 60% of this expenditure. This monthly expenditure calculated, however, was not representative of real needs but it was based on low income in the industry. The study suggested two normative constructions of an appropriate food basket for a standard family size, which should include 3 adults and 2 children, and a minimum housing consisting of 2 rooms, an independent kitchen and bathroom facility. Using the food basket calculation of the Delhi Minimum Wage Advisory Committee estimated in December 2016, and the rent estimate for a two-room house in the areas where garment workers lived, the need-based minimum wage was pegged at ₹18,000 to 20,000 per month in 2018. Likewise, recent conversations with trade union leaders in Bangalore point to a need-based minimum wage of close to ₹32,000 for unskilled workers in Zone 1 based on the criteria laid down in Reptakos Brett Co. judgement, the 15th ILC, and using Dr. Aykroyd’s formula for diet and nutrition.

Gap between Norms and Implementation

These advisories have remained unheeded. The debate over minimum wage in the garment industry reflects to a great extent successive governments’ capitulation to industry reasoning and demands. The garment industry in Bangalore has made systematic efforts to move to rural areas, in search of lower wages. The industry now has a growing presence in Malavalli, Maddur, Mandya, Chamrajnagar, and Hassan.  Factory owners’ overall position on the question of wage is pegged on the frequently made point that the predominantly female workforce are secondary earners in households where they are wives or daughters. They do not therefore run the household solely on the basis of their earnings. There can be no justification for denying a worker a fair wage, whatever her earning status in the household. But the point of fact, however, is worth highlighting that our Report shows that 50% workers in the garment industry in Bangalore were supplementary earners, that is, those whose income was less than that of their husband or father.  29% were in the category of sole earner, that is, the household’s only breadwinner and 21% were the main earners, that is, their earnings were the highest in the household. Therefore, half of the garment women workers in our representative sample had sole or primary responsibility of running their households.

Additionally, our report shows that women workers were earning less than ₹11,000 after spending 10-15 years in the industry (as of 2023), and for 83% workers, the total household income was between ₹8,000 to 25,000 only. The monthly wage for a garment worker is therefore a hugely stretched amount. There is an urgent need to a) address the issue of systematically low wage paid to the industry’s predominantly female workforce, and b) close the gap between the principles and calculation of a need-based minimum wage, as per the Supreme Court judgement and the recommendations of the 15th ILC, and in its implementation and enforcement.

A version of this article appeared in the Deccan Herald: https://www.deccanherald.com/opinion/mandating-a-minimum-wage-3477086