To determine the new wage, the government takes into account the six-month average increase in the Consumer Price Index and inflation.
The central government has announced an increase in the minimum wages of workers working in the informal sector. The increased wages will be implemented from October 1.
After this increase, the minimum wage of laborers working in the construction sector will be Rs 783 per day i.e. an average of Rs 23,430 per month.
The government on Thursday (September 26) said that due to rising cost of living, there is a marginal increase in the minimum wages for workers employed in construction, mining and agriculture sectors.
The government revises wages twice a year
The government revises the wages paid to workers working in the industrial sector twice a year – in April and October.
To determine the new wage, the government takes into account the six-month average increase in the Consumer Price Index and inflation.
After the increase in the minimum wage rate, the wages of unskilled workers engaged in construction, sweeping, cleaning, loading and unloading in Area A will be Rs 783 per day.
The wages for semi-skilled workers will be Rs 868 per day and for skilled, clerical and watch and ward without arms the wages will be Rs 954 per day.
For highly skilled workers and armed watch and ward workers, the wages will be increased to Rs 1,035 per day.
The government uses inflation as a source to decide on wages, so it is important to see the retail inflation, wholesale inflation and the average price of a plate of vegetarian food in the country.
Inflation is directly related to purchasing power. For example, if the inflation rate is 6%, then the value of Rs 100 earned will be only Rs 94. Therefore, investment should be made keeping inflation in mind. Otherwise, the value of your money will decrease.
How does inflation increase or decrease?
The rise and fall of inflation depends on the demand and supply of the product. If people have more money, they will buy more things. Buying more things will increase the demand for things and if the supply is not according to the demand, the price of these things will increase.
In this way the market falls prey to inflation. In simple words, excessive flow of money in the market or shortage of things causes inflation. On the other hand, if the demand is less and the supply is more, then inflation will be less.
Inflation is determined by CPI
As a consumer, you and I buy goods from the retail market. The Consumer Price Index (CPI) shows the changes in the prices related to this. CPI measures the average price we pay for goods and services.
Apart from crude oil, commodity prices, manufactured cost, there are many other things which play an important role in determining the retail inflation rate. There are about 300 items on the basis of whose prices the retail inflation rate is decided.
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