Ministry of labour releases new wage index series

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admin December 6, 2021
Updated 2021/12/06 at 3:17 PM

The Ministry of Labour released a new series of Wage Rate Index (WRI) with the base year of 2016 on Wednesday. The WRI is collected and maintained by the Labour Bureau, a ministry-attached entity.

According to a labour ministry announcement, the new WRI series with a base 2016 = 100 will replace the existing series with a base 1963–65.

According to the government, the base year for main economic indicators is revised on a regular basis to reflect changes in the economy and incorporate employees’ pay patterns.

The base year of WRI statistics has been amended from 1963–65 to 2016 by the Labour Bureau, in accordance with suggestions from the International Labour Organization, the National Statistical Commission, and others, in order to improve coverage and make the index more representative.

In terms of number of industries, sample size, occupations within chosen industries, weightage of industries, and other factors, the new WRI series has expanded the breadth and coverage.

Professor SP Mukherjee and other members of the expert group on minimum wages and national floor wages believe that the WRI’s base revision will be crucial in determining minimum wages and national floor wages, as well as other criteria that will be determined by the expert group in due course.

The new WRI series would be compiled twice a year, on January 1 and July 1 of each year, on a point-to-point half-yearly basis.

The data from the Occupational Wage Survey (seventh) round was used to create the weighting diagram in the new WRI series.

In all, 37 industries are included in the new WRI basket, compared to 21 in the 1963–65 series.

The 37 industries chosen for the new series are divided into three categories: manufacturing (30 industries), mining (4 industries), and planting (3 industries).

In the previous series, there were 14 manufacturing industries, 4 mining industries, and 3 plantation industries.

The current salary data for the new WRI basket was gathered from 2,881 units across 37 sectors, compared to 1,256 units across 21 industries in the previous series.

In the new series of WRI, almost 700 vocations have been covered under 37 industries.

The base year estimated employment estimates in corresponding vocations in each chosen industry were used as the weights in both WRI series.

The WRI at the industry level is calculated by taking the weighted average of the occupation level indices in a given industry, with the weights being the base year’s anticipated total employment bill in each profession.

The sectoral/All-India Index is calculated by taking the weighted average of the industry/sector level indices, with the weights being the base year’s anticipated total employment bill in each industry/sector.

As compared to the previous series, the sector level weights in the new series have altered. The manufacturing sector’s weight has risen significantly over time, whereas the weight of the plantation and mining sectors has decreased under the new series compared to the previous one.

Synthetic fabrics, textile garments, printing and publishing, footwear, petroleum, chemicals and gases, fertilisers, medications and medicines, and other industrial sectors have all been included in the new WRI basket.

In the new series, the oil mining business has replaced the mica mining industry in the basket to make the mining sector more reflective of the three types of mining: coal, metal, and oil.

Tea, coffee, and rubber are the three plantation sectors that have been preserved in the new WRI basket with expanded coverage.

 

Source: Business Standard

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