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Main Objectives of National Wage Policy

One of the objectives of economic planning is the raising of the standard of

living of the people. This means that the benefits of planned economicdevelopment should be distributed among the different sections of the

society.

Therefore, in achieving a socialistic pattern of society, the needs for proper

rewards to the working class of the countryman never is over emphasised.

A national wage policy, thus aims at establishing wages at the highestpossible level, which the economic conditions of the country permit and

ensuring that the wage earner gets a fair share of the increased prosperity of

the country as a whole resulting from the economic development.

The term wage policy here refers to legislation or government action

calculated to affect the level or structure of wages or both, for the purpose of

attaining specific objectives of social and economic policy.

. To eliminate malpractices in the payment of wages.

!. To set minimum wages for workers, whose bargaining position is weak due

to the fact that they are either un"organised or inefficiently organised. #n

other words, to reduce wage differential between the organised andunorganised sectors.

$. To rationalise inter"occupational, inter"industrial and inter"regional wage

differentials in such a way that disparities are reduced in a phased manner.

%. To ensure reduction of disparities of wages and salaries between the

private sector and public sector in a phased manner.

&. To compensate workers for the raise in the cost of living in such a mannerthat in the process, the ratio of disparity between the highest paid and the

lowest paid worker is reduced.

'. To provide for the promotion and growth of trade unions and collective

bargaining.

(. To obtain for the workers a just share in the fruits of economicdevelopment.

). To avoid following a policy of high wages to such an e*tent that it results

in substitution of capital for labour thereby reducing employment.

+. To prevent high profitability units with better capacity to pay a level of

wages far in e*cess of the prevailing level of wages in other sectors.

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.To permit bilateral collective bargaining within national framework so that

high wage islands are not created.

.To encourage the development of incentive systems of payment with aview to raising productivity and the real wages of workers.

!.To bring about a more efficient allocation and utilisation of man"power

through wage differentials and appropriate systems of payments. #n order to

achieve the above objectives under the national wage policy, the followingregulations have been adopted by the state-

. rescribing minimum rates of wages.

!. /ompulsory conciliation and arbitration.

$. 0age boards.

. 1inimum 0ages-

#n order to prescribe the minimum rate of wages, the 1inimum 0ages Act,

+%) was passed. The Act empowers the government to fi* minimum rates of

wages in respect of certain sweated and unorganised employments. #t alsoprovides for the review of these wages at intervals not e*ceeding & years.

!. /ompulsory /onciliation and Arbitration-

0ith the object of providing for conciliation and arbitration, the #ndustrial

2isputes Act +%( was passed. #t provides for the appointment of #ndustrial

Tribunals and 3ational #ndustrial Tribunals for settlement of industrialdisputes including those relating to wages.

$. 0age 4oards-

A wage board is a tripartite body with representatives of management and

workers, presided over by a government nominated chairman who can act as

an umpire in the event of disagreement among the parties.

Technically, a wage board can make only recommendations, since there is nolegal sanction for it, but for all practical purposes, they are awards which if

made unanimously, are considered binding upon employers.