AEPC opposes govt proposal to hike contract wages

29 Apr '16
2 min read

The Apparel Export Promotion Council (AEPC) has opposed a Labour Ministry proposal to set the minimum wage to be paid to contract labourers at Rs 10,000 per month.

It said such a move would drive up the costs for the labour-intensive apparel sector and drag down garment exports by 10 per cent, or Rs 11,000 crore, a year.

“The industry witnesses peak demand between October and February, while orders decline by around 30 per cent in other seasons. With the proposed increase in wages, the industry will not be able to exercise its flexibility of engaging more labour to meet its peak-time requirements and will lose to competitors in Bangladesh and China, who already have a cost advantage,” said AEPC Vice Chairman HKL Magu.

The Labour Ministry had recently proposed amendment of the Contract Labour (Regulation and Abolition) Central Rules suggesting Rs 10,000 as the minimum payable wage to contract labour. The Ministry’s initiative is part of the government’s efforts to check exploitation of labour employed by the industry on a contractual basis.

According to the AEPC, if the provision is uniformly implemented across all States, the result will be over 90 per cent increase in wages for contract labour in States such as Odisha and Rajasthan and over 30 per cent in most other States.

Apparel companies will effectively have to pay Rs 14,100 to a contract labourer after factoring in increase in PF (12 per cent), ESI (4.75 per cent) and Bonus (8.33 per cent) and service tax, Magu said.

He argued that the Labour Ministry’s proposal is arbitrary, as wages are fixed according to the work performed and on the basis of skills of a labourer. (SH)

Fibre2Fashion News Desk – India

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