New Delhi

India is hiking minimum wages marginally for workers employed in informal sectors including construction, mining, and agriculture, from October 1, a government statement said on Thursday as detailed in a report by Reuters.

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"This adjustment is aimed at helping workers cope with the rising cost of living," the statement said, referring to the 2.40-point rise in the consumer price index, opens new tab (CPI) for industrial workers.

After the hike, the unskilled workers in the upper-most band can expect a daily minimum wage of 783 rupees ($9.36), semi-skilled workers a rate of 868 rupees, and highly skilled workers 1,035 rupees.

The wages are revised twice a year according to inflation, based on the six-month average rise in CPI for industrial workers.

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Earlier this week, thousands of workers held protests across the country, seeking an increase in wages and demanding the repeal of four labour codes which they say favour multinational corporations.

The Central Government revises the Variable Dearness Allowance (VDA) twice a year, effective from April 1 and October 1, based on the six-month average increase in the Consumer Price Index for industrial workers.

Detailed information regarding the minimum wage rates by sector, categories and area, is available on the website (clc.gov.in) of the Chief Labour Commissioner (Central), Government of India.

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What is the relevance of Variable Dearness Allowance?

Variable Dearness Allowance (VDA) defines the new amount which is earned after the increase or decrease in the consumer price index (CPI). This is where the dearness allowance is calculated and updated for the workers.

What will be the impact of this move?

Starting October 1, India will slightly raise minimum wages for informal sector workers, including those in construction, mining, and agriculture, to help them cope with the increasing cost of living. The new daily minimum wage will be set at 783 rupees for unskilled workers, 868 rupees for semi-skilled workers, and 1,035 rupees for highly skilled workers.

This adjustment reflects the government's commitment to improving the economic conditions of workers in these sectors, ensuring they receive fair compensation as living expenses continue to rise. This move hence is expected to provide some respite to workers from inflation and rejuvenate the economic demand cycle.