The government recently revised the base year for the Wage Rate Index (WRI) to 2016, replacing the old series, which had the base year of 1963-65.
Context
The government recently revised the base year for the Wage Rate Index (WRI) to 2016, replacing the old series, which had the base year of 1963-65.
What Is the Wage Rate Index?
- The Ministry of Labour and Employment has announced a new series of Wage Rate Index (WRI) with the base year of 2016.
- The WRI is compiled and maintained by the Labour Bureau, a ministry-attached office.
- It is based on the International Labour Organization's and the National Statistical Commission's recommendations.
- In contrast to the preceding series, which was compiled on an annual basis, the new WRI series was compiled on a half-yearly basis (on the first of January and July each year).
- In comparison to the former WRI series (1963-65=100), the new WRI basket (2016=100) has expanded the scope and coverage of occupations and industries.
- The manufacturing sector now includes 16 new industries, including textile garments, footwear, and petroleum, among the 37 industries.
- The oil mining industry has been introduced to the basket in place of the mica mining industry in the new series to make the mining sector more inclusive of the three types of mining: coal, metal, and oil.
- Tea, coffee, and rubber are the three plantation industries that have been preserved in the new WRI basket with enhanced coverage.
- Motor vehicles, textile garments, coal mines, iron & steel, and cotton textiles make up the top five industries, accounting for 46 percent of total weight.
Significance
- The new base will be more representative, and it will be used to determine minimum wages, national floor wages, and other parameters.
- The government updates the base year for major economic indicators on a regular basis to reflect changes in the economy and workers' wage patterns.
- It gives employers helpful advice on how to choose the best human resource strategy.
What Is WRI 2020?
- In 2020 (half-yearly 2), the All India Wage Rate Index Number for all 37 industries was 119.7, an increase of 1.6 percent over the index in 2020 (half-yearly 1).
- The Plantation Sector had the highest Wage Rate Index in 2020 (half-yearly 2), followed by the Manufacturing Sector and the Mining Sector.
- Wage Rate Index at the Highest Level: Drugs & Medicines had the highest Wage Rate Index, followed by Sugar, Motor Cycles, Jute Textiles, and Tea Plantation.
- Wage Rate Index at the Lowest Level: Rubber Plantation had the lowest Wage Rate Index, followed by Paper, Castings & Forgings, Woollen Textiles, and Synthetic Textiles.
