Low pay and wage inequality pose a serious challenge for India to achieve decent working conditions and inclusive growth, said the India Wage Report published by the International Labour Organization on Monday.

Disparity in wages remains a challenge despite the Gross Domestic Product increasing at an annual average rate of about 7% since 1993 and the real average daily wage doubling between 1993-’94 and 2011-’12, the report said.

Though rural wages have increased faster than urban wages, the wages in urban India is more than double that of rural India, which shows inequality and how quality of jobs has not picked up despite economic growth, the report said.

The International Labour Organization is a United Nations agency which deals with labour problems.

The report cited data from the Employment and Unemployment Survey of the National Sample Survey Office, which said that in 2011-’12, the average wage in India was about Rs 247 per day, almost double the 1993-’94 figure of Rs 128.

Referring to data from the National Sample Survey Office, the report said the real average daily wage increased more rapidly in rural areas than in urban areas and for casual workers more than for regular workers. Average wages increased faster for women than for men, and rose faster in the unorganised sector than in the organised sector.

At Rs 384, the average daily wages in urban areas is more than twice as high as those in rural areas, the report said.

Gender wage gap

The gender wage gap remains steep as per international standards, according to the report. It has declined from 48% in 1993-’94 to 34% in 2011–’12. The wage gap exists for all kind of workers – regular and casual, urban and rural.

Women employed as casual workers in the rural economy earn the lowest in India, which is 22% of what urban regular male workers earn, the report said. Among casual women workers, Dalits and those from the Other Backward Classes earned slightly higher than those from the general and adivasi categories in both rural and urban areas.

The average labour productivity, as measured by the GDP per worker, has increased, but the labour share, which is the proportion of national income that goes into labour compensation, has declined from 38.5% in 1981 to 35.4% in 2013.

The report has called for stronger implementation of minimum wage laws and strengthening of the frameworks for collective bargaining by workers. This will help combat persistent low pay in some sectors and to bridge wage gaps between rural and urban, male and female, and regular and casual workers, the report said.