FED report says India's high minimum wages hinder formal jobs
A new report from the Foundation for Economic Development (FED) says India's high minimum wages are making it harder to create formal jobs.
According to recent data, 64% of workers earn less than the legal minimum, and even a 30% wage hike hasn't made hiring much easier.
Strict rules mean many low-income workers can't be hired officially, pushing them into informal work.
India's labour-intensive exports miss $60 billion
India's minimum wage is about 50% higher than in countries like China and Vietnam, which makes it tough for industries here to compete globally.
Because of these rules and uncompetitive overtime pay, India loses around $60 billion in annual export shortfalls for labour-intensive industries and nearly 90% of its workforce stays in informal jobs.
The FED suggests changes like more flexible wage talks and wage subsidies could help open up better opportunities.