By Sumarbin Umdor
The State government is all set to implement the recommendations of the Fifth Pay Commission bringing cheers to over 92 thousand regular government employees and pensioners but which will also raise salary burden by Rs. 1000crore annually over current amount, that too just in the first year of its implementation. The pay hike is justified as employees of Central government and even state owned company like the Meghalaya Energy Corporation Limited are already enjoying enhanced salary packages for some months now. So, while the welfare of workers in the organised sector (government and corporates) is well taken care of, what about those employed in the unorganised/informal sector?
Workers in the unorganised/informal sector comprise of those working in the unorganised enterprises or households (unincorporated private enterprises engaged in the sale and production of goods and services operated on a proprietary or partnership basis and with less than ten workers), including casual/contract workers employed in the formal sector without access to employment and social security.
In our country,the percentage of those informally employed stands at 92 percent. A worrying trend is that over the years the share of informal workers in the organized sector has increased significantly because of a greater use of contract and other forms of casual labour as highlighted in the ILO India Labour Market Update (2016).
As per 2011 census in In Meghalaya close to about 6.9 lakhs workers were engaged in agriculturewith almostall of that employment being informal in nature, which is about 10 times the current number of serving state government employees. Those engaged in this sector faces multitude of problems ranging from lack of access to inputs(fertilizer, etc) at affordable price, absence of storage and regulated markets, weak extension support, limited access to finance, volatility of output prices- all of which causes hardship and distress tocultivators and farm labourers. While many of the above issues need long term policy measures, there are two areas where the state government can provide immediate relief to the farmers.
Although major agricultural products of the state are not covered under the minimum support prices (MSP) of the central government, there is an alternative mechanismcalled the Market Intervention Scheme (MIS) implemented on the request of State Governments to provideprice support to farmers for perishable and horticultural commodities in the event of a fall in market prices. The regular implementation of this scheme will save farmers in the state from incurring huge losses at times of price volatility of commodities. However, what dither state government in implementing this scheme is the condition that it has to contribute 25 per cent of the losses during procurement.
Recently, farmers in the state have demanded waiving of farms loans of Rs. 50000 borrowed under Kisan Credit Card Scheme (KCC) which many are unable to pay off due to low returns on agricultural produce. The total outstanding loans under KCC in Meghalaya at the end of March 2016 was about Rs. 308 crorewhich at present may have increased to aboutRs. 400crore. While loan waiver does not make sound economics and will only bring temporary relief to farmers, I wonder why the state should not occasionally indulge this hard working segment of the population, particularly when it does so to the government employees at regular intervals. Surely, the state government which is considering an expenditure of Rs. 4000crore per year on salaries of its employees can mobilise another 10 percent for the benefit of farmers of the state.
Let us turn now to informal employment in non-agricultural sectors where 78percent of employment is informal in nature. In Meghalaya, the services sector accounts for a large percentage of the informal workers in the non-agricultural sector. An important legislation to protect the interest of the workers in the informal sector is the Minimum Wage Act of 1948.
Since labour is included in the concurrent list, the Act requires the appropriate government to fix minimum rates of wages in respect of employment specified in the schedule, and review and revise the minimum wages at intervals not exceeding five years.
When we reviewthe minimum wages in Meghalaya which was revised in 2015,we find that the wages are probably among the lowest of the recently revised state minimum wages in the country. For example, the minimum wages for unskilled and skilled workers in Assam are Rs. 250 and Rs. 350 respectively, while in Mizoram they stand at Rs. 270 and 370. The corresponding wages for Meghalaya is Rs. 170 and Rs. 191.Many states have also introduced different rates for clerical and supervisory workersand are having more number of schedule employments than the 27 listed in Meghalaya
The argument for increasing the minimum wages in Meghalaya is even more pressing as the State Fifth Pay Commission has recommended theminimum pay for its lowest category of government employeesat Rs. 17400 per month ( as on 1.01.2006) based on the norms suggested by the Indian Labour Conference in 1957 for fixing of minimum wage. Accordingly to the Commission, the above amount is required by a family of four members including the employee to meet basic needs of calories, clothing, housing, water, electricity, medical and entertainment to ensure a healthy and dignified standard of living.
The proposed monthly minimum pay for Meghalaya government employees is almost four times the amount being paid to unskilled workersin the state at current wage rate. Even if we were to consider only essential need based items as per their cost and unit requirements tabulated and calculated by the State Fifth Pay Commission and also factor in the subsidised items provided under public distribution system, the minimum wage for unskilled worker in the state would still require to be raised by 50 percent just to enable a worker and his family to maintain half of the expected standard of the lowest rank state government employee.
While the benefit of the hike in minimum wages may not be enjoyed by informal workers in the unorganised sector due to enforcement and other issues, significant number of casual and contract workers employed by the government will benefitted if the minimum wages are raised by a substantial amount.
Besides wages, the state government should also consider other measures to protect the interest and welfare of the informal workers. Rajasthan has recently introduced labour reforms for domestic workers by setting working hours and other conditions to protect the interests of these workers. Similarly, other states have introduced accidental insurance policy covering private and commercial drivers who are constantly facing accident hazards.
So, at a time when the government of Meghalaya is considering spending Rs.4000 crore on the nearly 69 thousand government employees, it should also spare some thoughts for the lakhs of informal workers in the state.
(The author teaches Economics at NEHU, Shillong)