Polity & Governance

ILO report flags wage inequality in India

The News

  • Recently, the International Labour Organization (ILO) has published India Wage Report.
  • According to the report, real average daily wages in India almost doubled in the first two decades after economic reforms, but low pay and wage inequality remains a serious challenge to inclusive growth.


Important facts from the report

  • Overall, in 2009-10, a third of all of wage workers were paid less than the national minimum wage, which is merely indicative and not legally binding. That includes 41% of all casual workers and 15% of salaried workers.
  • In 2011-12, the average wage in India was about ₹247 rupees a day, almost double the 1993-94 figure of ₹128. However, average labour productivity (as measured by GDP per worker) increased more rapidly than real average wages.
  • India’s labour share or the proportion of national income which goes into labour compensation, as opposed to capital or landowners has declined.
  • Widening gap in wages:
  1. The rise in average wages was more rapid in rural areas, and for casual workers. However, these groups started at such a low base that a yawning wage gap still remains.
  2. Average wage of casual workers (62% of earning population) is only ₹143 a day
  3. Daily wages in urban areas (₹384) also remain more than twice as high as those in rural areas (₹175).
  4. Regional disparities in average wages have actually increased over time, with wages rising more rapidly in high-wage States than in low-wage ones.
  5. The gender wage gap decreased from 48% in 1993-94 to 34% in 2011-12, but still remains high by international standards.
  6. And of all worker groups, the average wages of casual rural female workers was the lowest, at just ₹104 a day.



  • Note- The lack of timely data is the main hindrance, ILO’s analysis and the decisions of Indian policy makers was dependent on 2011-12 data from the Employment and Unemployment Survey (EUS) of the National Sample Survey Office (NSSO) (as that was the last year in which the survey was done).


Steps to be taken

  • The ILO has called for stronger implementation of minimum wage laws and strengthening of the frameworks for collective bargaining by workers.
  • This is essential to combat persistent low pay in some sectors and to bridge the wage gaps between rural and urban, male and female, and regular and casual workers.
  • State-specific and comparative studies on wages and collaborative work between government agencies, academic institutions and expert organisations are needed.


About International Labour Organization 

  • ILO is the only tripartite (involving three parties) U.N. agency that brings together governments, employers and workers representatives of 187 member states, to set labour standards, develop policies and devise programmes promoting decent work for all women and men.
  • The unique tripartite structure of the ILO gives an equal voice to workers, employers and governments to ensure that the views of the social partners are closely reflected in labour standards and in shaping policies and programmes.
  • The ILO was created in 1919, as part of the Treaty of Versailles that ended World War I to reflect the belief that universal and lasting peace can be accomplished only if it is based on social justice.
  • The ILO became the first specialized agency of the UN in 1946.
  • In 1969, ILO received the Nobel Peace Prize for improving peace among classes, pursuing decent work and justice for workers and providing technical assistance to other developing nations.


    • Geneva, Switzerland



    • To promote rights at work.
    • Encourage decent employment opportunities.
    • Enhance social protection and strengthen dialogue on work-related issues.



    1. Set and promote standards and fundamental principles and rights at work
    2. Create greater opportunities for women and men to decent employment and income
    3. Enhance the coverage and effectiveness of social protection for all
    4. Strengthen tripartism and social dialogue

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