This wage hike, approved by the Delhi government, will impact various categories of workers, including daily wage laborers, domestic workers, and those employed in small businesses and street vending. It is expected to benefit hundreds of thousands of workers who currently fall outside formal employment structures and are often deprived of the protections and benefits available to employees in regulated sectors. The wage revision has been met with praise from labour rights organisations, while industry groups have raised concerns over the possible implications for business costs.
The new wage structure introduces a tiered system based on skill levels. Unskilled workers will now receive ₹16,792 per month, semi-skilled workers will earn ₹18,499, and skilled workers will see their pay rise to ₹20,357. These wages reflect a modest increase compared to the previous rates, yet they are seen as essential in improving living standards. Daily wages have also been adjusted, with unskilled workers now entitled to ₹645 per day, semi-skilled workers ₹711, and skilled workers ₹782.
Labour rights advocates have long called for more comprehensive policies to support the unorganised workforce, which constitutes a large portion of Delhi's working population. The new pay structure is regarded as a step in the right direction, though some argue it does not fully meet the needs of these workers, who often face precarious working conditions, job insecurity, and a lack of social safety nets. In particular, many unorganised workers continue to lack access to healthcare, pension schemes, and insurance benefits.
However, business owners, particularly those running small and medium-sized enterprises (SMEs), have voiced concerns over the impact of the wage hike on their operational costs. While larger companies may be able to absorb the additional expenses, smaller businesses operating on tight margins could struggle to accommodate the wage increases without cutting back on staff or raising prices. Some industry groups have expressed fears that this could lead to job losses or force businesses to relocate to other states where labour costs are lower.
The Delhi government has defended the decision, emphasising that the wage hike is essential to ensure that all workers, regardless of their employment status, are able to maintain a basic standard of living. Officials have noted that the cost of living in Delhi has risen steadily over the past several years, and wages for informal workers had not kept pace. The wage increase is seen as a necessary measure to address the growing economic disparities between formal and informal workers.
The government's decision comes amid growing pressure from labor unions and activists, who have been calling for wage revisions for several years. Union leaders have pointed out that the unorganised sector is often the most neglected in terms of labor rights, even though it plays a critical role in the city's economy. The revised wages are expected to help alleviate some of the financial hardships faced by workers in this sector, many of whom were severely affected by the economic disruptions caused by the pandemic.
The informal economy in Delhi is vast and diverse, encompassing a wide range of occupations such as construction workers, street vendors, drivers, and household help. These workers are typically excluded from formal employment contracts and protections, which leaves them vulnerable to exploitation and abuse. According to estimates, nearly 85% of the workforce in Delhi is engaged in the unorganised sector, underscoring the importance of policies that address their needs.
The wage hike also reflects broader national conversations about labor reforms and workers' rights, particularly in the wake of the pandemic. Across India, the unorganised workforce has been one of the hardest hit by the economic fallout, with millions of workers losing their jobs or facing significant pay cuts. The Delhi government's move to revise wages can be seen as part of a larger effort to address the inequities faced by informal workers, though much more is needed to provide them with comprehensive social protections.
Labour experts have noted that while the wage increase is a positive development, it is unlikely to resolve all of the challenges faced by the unorganised sector. Many workers in this sector remain outside the reach of formal regulatory frameworks, making it difficult to enforce wage standards and other labor protections. Moreover, with inflation continuing to erode purchasing power, even the revised wages may fall short of providing a truly sustainable living standard for many workers.