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29-April-2016

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

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 council said.

“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,” AEPC chairman HKL Magu said.

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.

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, AEPC said.

Magu 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.

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