The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 – NREGA Scheme which is now pegged to the Indian Inflation has become a benchmark for daily labour / other Wages across India. Under NREGA, implemented in bits and pieces across India, unemployed youth were provided Rs 100 / day for 100 days thus indirectly telling them not to work for ~4 months and claim this wage.
However, the ambitious demographics tell a different story. An estimated 2 million unemployed males indicated their willingness to migrate to seek employment – Delhi and Mumbai are preferred destinations. This implies a continuing strain on urban infrastructure. India’s currently unemployed urban males have a reasonable dispersion of skill sets.
Employee turnover seems highest in the Industrials sector. The availability of labor for the finance sector could be best among all sectors. This points to continuing wage cost pressure. Companies with high wage costs and low EBITDA margins could be especially vulnerable.
This will only put pressure on the Indian Industry as Min Wages have now increased to Rs 120 thus paving way for higher degree of automation to stay competitive globally.