India has one of the largest workforces in the world, spread across multiple sectors such as agriculture, manufacturing, construction, IT and various other services. With such a level of diversity, protecting workers’ rights and ensuring them fair pay becomes essential. To address this issue, the Government of India has introduced the legal provision, which is the Minimum Wages Act, 1948, which is now subsumed under the Code on Wages, 2019.
This law ensures that every worker is entitled to a minimum wage that meets their basic needs and requirements. However, since the cost of living varies at a wide level across the country, the minimum wage is not uniform. Instead, it is fixed by both the Central Government and State Governments, depending on the type of work, location, and skill level.
In this blog, we will understand what minimum wage means, how it is determined, and look at state-wise variations across India.
What is Minimum Wage?
A minimum wage is the lowest amount of remuneration that an employer is legally required to pay a worker. It acts as a safety net to prevent exploitation and also ensures workers can afford basic living standards such as food, housing, clothing, shelter, healthcare and education.
The wage rate may differ, which is based on various factors: –
- Skill level of the worker (which may be Unskilled, Semi-Skilled, Skilled or Highly Skilled)
- Geographical location or area (which may be Urban, Semi-urban, Rural)
- Nature of the employment (which may be Agriculture, Construction, Industrial, Shops & Establishments, etc.)
- Cost of living in that particular state or region
National Floor Level Minimum Wage
The Central Government sets a National Floor Level Minimum Wage (NFLMW), which acts as a benchmark. States cannot fix wages below this level.
As of the latest revision (October 2024):
- Unskilled workers: ₹783 per day
- Semi-skilled workers: ₹868 per day
- Highly skilled workers: ₹1,035 per day
This floor wage ensures uniformity to some extent, but states are free to set higher wages depending on local conditions.
Why Do Wages Differ State-Wise?
India’s economic diversity is huge. Living costs in Delhi, Mumbai, or Bangalore are far higher compared to smaller towns or rural regions. Hence, the law allows states to determine wages suited to their conditions.
Some reasons for state-wise variations are:
- Cost of living index
- Urban vs. rural expenses
- Industrial development
- Availability of labour
- Inflation and consumer price index (CPI)
State-Wise Minimum Wages in India
Below is a suggestive list of the daily minimum wages in some of the major states. These values may vary frequently, so the employers and workers must always check the latest or updated notifications issued by the Labour Department of each state.
| State / UT | Unskilled (₹/day) | Semi-Skilled / Skilled (₹/day) | Remarks |
| Delhi | ₹695 | ₹767 – ₹843 | Highest wages in India due to the high cost of living |
| Maharashtra | ₹385 – ₹420 | ₹520 – ₹556 | Mumbai & industrial zones have higher rates |
| Karnataka | ₹494 – ₹555 | ₹575 – ₹650 | Bangalore wages are among the highest in South India |
| Tamil Nadu | ₹390 – ₹450 | ₹500 – ₹600 | Different rates for agriculture and factories |
| Uttar Pradesh | ₹300 – ₹333 | ₹364 – ₹395 | Lower compared to industrialised states |
| Bihar | ₹412 | ₹500 – ₹521 | Among the lowest in India |
| West Bengal | ₹297 – ₹383 | ₹364 – ₹464 | Varied across zones (A, B, C areas) |
| Assam | ₹297 | ₹346 | Covers tea plantation and rural workers |
| Goa | ₹537 | ₹593 | Higher due to tourism and small size |
| Punjab | ₹395 – ₹415 | ₹460 – ₹515 | Agricultural wages play a big role |
| Chandigarh (UT) | ₹532 | ₹549 | Aligned with Punjab & Haryana wages |
Note: These are approximate rates based on recent state notifications. In most cases, wages also include a Variable Dearness Allowance (VDA) linked to inflation.
Key Features of State Notifications
- Skill-Based Classification – Each state classifies workers into four categories:
- Unskilled
- Semi-Skilled
- Skilled
- Highly Skilled
- Zonal Division – Many states divide cities/towns into Zones (A, B, C) depending on urbanization and cost of living. Zone A (metros) usually has higher wages.
- Variable Dearness Allowance (VDA) – Added to the basic wage to adjust for inflation, revised every 6 months or annually.
- Industry Specific Rates – Some states fix different wages for industries like construction, agriculture, mining, textiles, and IT.
Importance of Minimum Wages
For Workers
- Protects them from exploitation.
- Ensures access to basic living standards.
- Improves health, education and quality of life.
- Provides financial security for families.
For Employers
- Creates fair competition among businesses.
- Improves employee morale and productivity.
- Reduces labour disputes.
- Enhances company reputation and compliance.
For the Economy
- Increases the purchasing power of workers.
- Reduces poverty and income inequality.
- Boosts local consumption and economic growth.
Challenges in Implementation
- Informal Sector Dominance – Nearly 80–85% of the Indian workers are in the informal sector, where compliance is weak or sensitive.
- Lack of Awareness – There are various workers, especially those who are migrants, who are unaware of their fundamental rights.
- Frequent Changes – States can easily revise the wages on a regular basis, which makes it difficult for small businesses to keep them on track.
- Enforcement Gaps – The inspections done by labour officers and grievance redressal mechanisms are often inadequate and inaccurate.
- Regional Disparities – A worker in Delhi may earn twice as much as one in Bihar for the same level of work.
Government Efforts
- Code on Wages, 2019 –To consolidate the labour laws and extend their coverage of minimum wages to all workers.
- National Floor Wage – It prevents the states from setting very low wage rates.
- Digital Compliance Platforms – States are adopting online portals for notifications and filing.
- Awareness Programs – Campaigns to inform the workers about their legal rights.
Conclusion
The concept of the minimum wage is one of the strongest and productive tools for ensuring social justice and protecting workers from exploitation. While the National Floor Level Minimum Wage sets a benchmark, state-wise minimum wages reflect India’s regional diversity in costs and also the economic conditions.
Delhi, Goa and Karnataka lead with the higher wage levels, while the other states like Bihar and Assam have relatively lower rates. For workers, it is important to know the prevailing minimum wage in their state and category, and for employers, compliance is not just a legal duty but also a step toward sustainable business practices.
As India’s economy grows, ensuring fair wages will remain at the heart of inclusive development. A robust and regularly updated minimum wage system benefits not only workers but also industries and the nation as a whole.
