Thursday, July 4, 2019

Economic Survey calls for Redesigning a Minimum Wage System in India for Inclusive Growth -- PIB

Economic Survey calls for Redesigning a Minimum Wage System in India for Inclusive Growth

Suggests Policy recommendations for an effective design of Minimum Wage System A well-designed and effective implementation of minimum wages will help decrease wage inequality A Mechanism should be developed to adjust minimum wages regularly and more frequently. A  National level dashboard can be set up under the Ministry of Labour & Employment with access to the State Governments Establishing a Toll-free number recommended to register grievances on non-payment of the statutory minimum wages
A well-designed and effective implementation of minimum wages will strengthen the trend towards decreasing wage inequality especially at lower levels. This becomes all the more significant as women constitute the majority of the bottom rungs of the wage distribution. This was the stated in the Economic Survey 2018-19 presented by the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman in Parliament today.

The Economic Survey 2018-19 states that an effective minimum wage policy that targets the vulnerable bottom rung of wage earners can help in driving up aggregate demand and building and strengthening the middle class, and thus spur a phase of sustainable and inclusive growth.

Following are the Policy recommendations for an effective design of minimum wages system as per the Economic Survey 2018-19:
  • Simplification and Rationalisation: Rationalisation of minimum wages as proposed under the Code on Wages Bill needs to be supported. This code amalgamates the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976 into a single piece of legislation. The definition of ‘wage’ in the new legislation should subsume the present situation of 12 different definitions of wages in different Labour Acts.

  • Setting a National Floor Level Minimum Wage: Central Government should notify a “national floor minimum wage” that can vary broadly across five geographical regions. Thereafter, states can fix their minimum wages at levels not lower than the “floor wage”. This would bring some uniformity in minimum wages across country and would make all states almost equally attractive from the point of view of labour cost for investment as well as reduce distress migration.

  • Criteria for setting minimum wage: The Code on Wages Bill should consider fixing minimum wages based on either of the two factors viz; (i) the skilled category i.e. unskilled, semi-skilled, skilled and highly skilled; and (ii) the geographical region, or else both. This Key change would substantially reduce the number of minimum wages in the country.

  • Coverage: The proposed Code on Wages Bill should extend applicability of minimum wages to all employments/workers in all sectors and should cover both the organized as well as the unorganized sector.

  • Regular Adjustment and Role of Technology: A mechanism should be developed to adjust minimum wages regularly and more frequently. A national level dashboard can be created at the Centre with access to the state governments whereby the states can regularly update the notifications regarding minimum wages. This portal must be made available at Common Service Centres (CSCs), rural haats etc., with the required mass media coverage so that the workers are well-informed their bargaining skills and decision-making power are strengthened.

  • Grievance Redressal: There should be an easy to remember toll-free number to register grievance on non-payment of the statutory minimum wages should be given wide-publicity to provide low-paid workers a forum to voice their grievance.

The Economic Survey further states that establishing an effective minimum wage system      that will have beneficial impact on multiple dimensions of growth is therefore an urgent necessity.


Deregulating labour law restrictions -- PIB

Ministry of Finance04-July, 2019 12:11 IST
Deregulating labour law restrictions
The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman tabled the Economic Survey 2018-19 in Parliament today.
Deregulating labour law restrictions can create significantly more jobs, as seen by the recent changes in Rajasthan when compared to the rest of the states.  The Survey states no major labour reforms were initiated by the states from 2007 to 2014.  In 2014, Rajasthan was the first State that introduced labour reforms in the major Acts.  Thereafter, many States followed Rajasthan.  A comparison between the indicators for labour, capital and productivity of manufacturing firms makes it clear that flexibility labour laws creates a more conducive environment for growth of industry and employment generation.  The States which are rigid in respect of their labour laws are suffering in all dimensions and are unable to create enough employment and cannot attract adequate capital into their States.
On average, plants in labour-intensive industries and in States that have transited towards more flexible markets are 25.4 per cent more productive than their counterparts in States which continue to have labour rigidities.

Size based Limitations posed by Key Labour Legislations

Labour Acts
Applicability of Establishments
Industrial Disputes Act, 1947, Chapter V relating to strikes, lockouts, retrenchment, layoff
Employing 100 or more workers
Trade Union Act, 2001 – Registration of trade unions
Membership of 10 per cent or 100 workmen whichever is less
Industrial Employment (Standing Orders) Act, 1946
100 or more workmen
Factories Act, 1948
10 or more workers with power and 20 or more workers without power
Contract Labour (Regulation & Abolition) Act, 1970
20 or more workers engaged as contract labour
The Minimum Wages Act, 1948
Employment in the schedule having more than 1000 workers in the State
Employees’ State Insurance Act, 1948 – ESI Scheme
10 or more workers and employees monthly wage does not exceed Rs.21000/-
Employees’ Provident Fund & Miscellaneous Provisions Act, 1952
20 or more workers




Wednesday, July 3, 2019

Clarification regarding Annual Returns and Reconciliation Statement - PIB

Ministry of Finance03-July, 2019 17:03 IST
Clarification regarding Annual Returns and Reconciliation Statement
The Government of India has been receiving a number of representations regarding Annual Return (FORM GSTR-9 / FORM GSTR-9A) and Reconciliation Statement (FORM GSTR-9C). In this regard the following clarifications are issued for information of all stakeholders: -

a)         Payment of any unpaid tax: Section 73 of the CGST Act provides a unique opportunity of self – correction to all taxpayers i.e. if a taxpayer has not paid, short paid or has erroneously obtained/been granted refund or has wrongly availed or utilized input tax credit then before the service of a notice by any tax authority, the taxpayer may pay the amount of tax with interest. In such cases, no penalty shall be leviable on such tax payer. Therefore, in cases where some information has not been furnished in the statement of outward supplies in FORM GSTR-1 or in the regular returns in FORM GSTR-3B, such taxpayers may pay the tax with interest through FORM GST DRC-03 at any time. In fact, the annual return provides an additional opportunity for such taxpayers to declare the summary of supply against which payment of tax is made.
b)         Primary data source for declaration in annual return: Time and again taxpayers have been requesting as to what should be the primary source of data for filing of the annual return and the reconciliation statement. There has been some confusion over using FORM GSTR-1, FORM GSTR-3B or books of accounts as the primary source of information. It is important to note that both FORM GSTR-1 and FORM GSTR-3B serve different purposes. While, FORM GSTR-1 is an account of details of outward supplies, FORM GSTR-3B is where the summaries of all transactions are declared and payments are made. Ideally, information in FORM GSTR-1, FORM GSTR-3B and books of accounts should be synchronous and the values should match across different forms and the books of accounts. If the same does not match, there can be broadly two scenarios, either tax was not paid to the Government or tax was paid in excess. In the first case, the same shall be declared in the annual return and tax should be paid and in the latter all information may be declared in the annual return and refund (if eligible) may be applied through FORM GST RFD-01A. Further, no input tax credit can be reversed or availed through the annual return. If taxpayers find themselves liable for reversing any input tax credit, they may do the same through FORM GST DRC-03 separately.
c)         Premise of Table 8D of Annual Return: There appears to be some confusion regarding declaration of input tax credit in Table 8 of the annual return. The input tax credit which is declared / computed in Table 8D is basically credit that was available to a taxpayer in his FORM GSTR-2A but was not availed by him between July 2017 to March 2019. The deadline has already passed and the taxpayer cannot avail such credit now. There is no question of lapsing of any such credit, since this credit never entered the electronic credit ledger of any taxpayer. Therefore, taxpayers need not be concerned about the values reflected in this table. This is merely an information that the Government needs for settlement purposes. Figures in Table 8A of FORM GSTR-9 are auto-populated only for those FORM GSTR-1 which were furnished by the corresponding suppliers by the due date. Thus, ITC on supplies made during the financial year 2017-18, if reported beyond the said date by the corresponding supplier, will not get auto-populated in said Table 8A. It may also be noted that FORM GSTR-2A continues to be auto-populated on the basis of the corresponding FORM GSTR-1 furnished by suppliers even after the due date. In such cases there would be a mis-match between the updated FORM GSTR-2A and the auto-populated information in Table 8A. It is important to note that Table 8A of the annual returns is auto-populated from FORM GSTR-2A as on 1st May, 2019.
d)         Premise of Table 8J of Annual Return: In the press release on annual return issued earlier on 4th June 2019, it has already been clarified that all credit of IGST paid at the time of imports between July 2017 to March 2019 may be declared in Table 6E. If the same is done properly by a taxpayer, then Table 8I and 8J shall contain information on credit which was available to the taxpayer and the taxpayer chose not to avail the same. The deadline has already passed and the taxpayer cannot avail such credit now. There is no question of lapsing of any such credit, since this credit never entered the electronic credit ledger of any taxpayer. Therefore, taxpayers need not be concerned about the values reflected in this table. This is information that the Government needs for settlement purposes.
e)         Difficulty in reporting of information not reported in regular returns: There have been a number of representations regarding non-availability of information in Table16A or 18 of Annual return in FORM GSTR-9. It has been observed that smaller taxpayers are facing a lot of challenge in reporting information that was not being explicitly reported in their regular statement/returns (FORM GSTR-1 and FORM GSTR-3B). Therefore, taxpayers are advised to declare all such data / details (which are not part of their regular statement/returns) to the best of their knowledge and records. This data is only for information purposes and reasonable/explainable variations in the information reported in these tables will not be viewed adversely.
f)          Information in Table 5D (Exempted), Table 5E (Nil Rated) and Table 5F (Non-GST Supply): It has been represented by various trade bodies/associations that there appears to be some confusion over what values are to be entered in Table 5D,5E and 5F of FORM GSTR-9. Since, there is some overlap between supplies that are classifiable as exempted and nil rated and since there is no tax payable on such supplies, if there is a reasonable/explainable overlap of information reported across these tables, such overlap will not be viewed adverselyThe other concern raised by taxpayers is the inclusion of no supply in the category of Non-GST supplies in Table 5F. For the purposes of reporting, non-GST supplies includes supply of alcoholic liquor for human consumption, motor spirit (commonly known as petrol), high speed diesel, aviation turbine fuel, petroleum crude and natural gas and transactions specified in Schedule III of the CGST Act.
g)        Reverse charge in respect of Financial Year 2017-18 paid during Financial Year 2018-19: Many taxpayers have requested for clarification on the appropriate column or table in which tax which was to be paid on reverse charge basis for the FY 2017-18 but was paid during FY 2018-19. It may be noted that since the payment was made during FY 2018-19, the input tax credit on such payment of tax would have been availed in FY 2018-19 only. Therefore, such details will not be declared in the annual return for the FY 2017-18 and will be declared in the annual return for FY 2018-19. If there are any variations in the calculation of turnover on account of this adjustment, the same may be reported with reasons in the reconciliation statement (FORM GSTR-9C).
h)         Role of chartered accountant or a cost accountant in certifying reconciliation statement: There are apprehensions that the chartered accountant or cost accountant may go beyond the books of account in their recommendations under FORM GSTR-9C. The GST Act is clear in this regard. With respect to the reconciliation statement, their role is limited to reconciling the values declared in annual return (FORM GSTR-9) with the audited annual accounts of the taxpayer.
i)           Turnover for eligibility of filing of reconciliation statement: It may be noted that the aggregate turnover i.e. the turnover of all the registrations having the same Permanent Account Number is to be used for determining the requirement of filing of reconciliation statement. Therefore, if there are two registrations in two different States on the same PAN, say State A (with turnover of Rs. 1.2 Crore) and State B (with turnover of Rs. 1 Crore) they are both required to file reconciliation statements individually for their registrations since their aggregate turnover is greater than Rs. 2 Crore. The aggregate turnover for this purpose shall be reckoned for the period July, 2017 to March, 2018.
j)           Treatment of Credit Notes / Debit Notes issued during FY 2018-19 for FY 2017-18: It may be noted that no credit note which has a tax implication can be issued after the month of September 2018 for any supply pertaining to FY 2017-18; a financial/commercial credit note can, however, be issued. If the credit or debit note for any supply was issued and declared in returns of FY 2018-19 and the provision for the same has been made in the books of accounts for FY 2017-18, the same shall be declared in Pt. V of the annual return.  Many taxpayers have also represented that there is no provision in Pt. II of the reconciliation statement for adjustment in turnover in lieu of debit notes issued during FY 2018-19 although provision for the same was made in the books of accounts for FY 2017-18. In such cases, they may adjust the same in Table 5O of the reconciliation statement in FORM GSTR-9C.
k)         Duplication of information in Table 6B and 6H: Many taxpayers have represented about duplication of information in Table 6B and 6H of the annual return. It may be noted that the label in Table 6H clearly states that information declared in Table 6H is exclusive of Table 6B. Therefore, information of such input tax credit is to be declared in one of the rows only.
l)          Reconciliation of input tax credit availed on expenses: Table 14 of the reconciliation statement calls for reconciliation of input tax credit availed on expenses with input tax credit declared in the annual return. It may be noted that only those expenses are to be reconciled where input tax credit has been availed. Further, the list of expenses given in Table 14 is a representative list of heads under which input tax credit may have been availed. The taxpayer has the option to add any head of expenses.
         All the taxpayers are requested to file their Annual Return (FORM GSTR-9 / FORM GSTR-9A) and Reconciliation Statement (FORM GSTR-9C) well before the last date of filing, i.e. 31st August, 2019.

(Release ID :191152)

Clarification regarding Consultation from Specialists at CGHS empanelled hospitals in respect of CGHS beneficiaries aged 75 years and above ........

Setting up of NPS oversight mechanism ....

Tuesday, July 2, 2019

ILO Joins Hands with Modi Govt to Reduce Minimum Wage of Workers

 -- J S Majumdar

IN the ongoing world economic crisis situation, there is a rightward political shift worldwide. This is resulting in the pursuit of an aggressive neoliberal economic agenda in favour of the corporates and against all sections of the working people. It is leading to cuts in wages, social security, subsidies, employment, rights, and increase in taxation -- as designed by the international finance capital -- combined with a country-specific divisive agenda. The reflection of this trend is seen in the rise of Trump in USA, his replicas in other countries and in the rise and consolidation of the Modi-led regime representing the communal and corporate forces in India.

In this background, it is not surprising that UN agencies such as the International Labour Organisation (ILO) too are not untouched by it. Two recent examples, both on minimum wages of workers, establish this fact. First, ILO, completely bypassing labourers, joined hands with the Modi government to prepare a report to give legitimacy to cut in the workers’ minimum wages in India. Second, ILO constituted an enquiry committee and condemned the Maduro government for increasing workers’ minimum wages in Venezuela. It condemned the government of Venezuela for “ignoring the Chambers of Commerce and tripartite mechanism” on raising workers’ minimum wage. But it conveniently ignored trade unions in India and the tripartite mechanism while sitting in the Modi government’s committee and fixing minimum wage.


The ILO did not stop there. In Delhi, it called a special meeting with central trade unions for “an informal exchange of views” on the government of India ‘Report of the Expert Committee for Determining the Methodology for Fixing the National Minimum Wage’. The government used an “innovative methodology to estimate a needs-based minimum wage”. This meeting was attended by seven central trade unions -- INTUC, BMS, HMS, AITUC, CITU, AIUTUC and NFITU. CITU was represented by its national secretariat member Karumalaiyan and its Delhi state general secretary Anurag Saxena.

In the meeting, ILO officials took great pains to explain in details the “merits” of the Modi government’s report and the “innovative methodology” adopted by it. Unfortunately for the ILO, however, all seven central trade unions, including the RSS-affiliated BMS, unanimously rejected it. Karumalaiyan questioned the very basis of ILO’s participation in the ‘expert committee’ and the need for a new methodology when Indian Labour Conferences (ILCs), all tripartite bodies and the Supreme Court, have upheld the existing methodology. Saxena questioned the timing of the report as the Delhi government’s notification on minimum wage, based on the current methodology of calculation, is pending before the Supreme Court. The AITUC representative pointed out that ILO officials themselves violated ILO Convention 131 on fixation of minimum wage and having gone beyond their terms of reference. BMS representatives highlighted various fallacies in the methodology itself.

The development comes at a time when ILO is celebrating the centenary of its formation. It was formed within two years of the Great October Revolution by the working class and establishment of the first socialist state.

The meeting was followed by the union finance minister’s pre-budget meeting with trade unions with the theme of ‘ensuring minimum wages for all workforce’. Obviously, it was for clearing ground to enforce the reduction in minimum wages as a big boost for the defaulting corporates.


The expert committee report, published on February 14, is a big fraud being played on the vast marginalised sections of workers. Like using new EPF accounts for projection of higher rate of “formal employment”, new GDP series to project higher economic growth and fudging facts with other manufactured data, the Modi government adopted the deception route to cut workers minimum wage to favour the corporates. It is trying to do this through this “innovative methodology” replacing the existing one under the Minimum Wages Act, 1948 which evolved over a period of 40 years.


Under directive principles of the constitution of India and on the basis of Fair Wages Committee recommendations, the tripartite 15th Indian Labour Conference (ILC) in 1957 decided on the current methodology of calculation having - (i) workers family of three members consumption unit; (ii) 2,700 calories per unit in balanced food as per Dr Aykroyd formula; (iii) 72 yards of cloth per family per annum; (iv) house rent as charged by the government for low income group housing; and (v) additional 20 per cent of (ii)+(iii)+(iv) for fuel, lighting and other miscellaneous expenses.

The Supreme Court of India has approved this current methodology in their judgement in the Raptakos Brett case in 1992, but by adding one more criterion as (vi) Additional 25 per cent to the total of (ii)+(iii)+(iv)+(v) for children’s education, medical treatment, recreation, festivals and ceremonies. Thus, the total of (ii)+(iii)+(iv)+(v)+(vi) becomes the minimum wage.


No doubt, the expert committee report’s methodology of calculation is innovative, but only for the purpose of cutting workers minimum wage. For fudging facts, the expert committee calculated workers family consumption unit as 3.6 instead of 3. Yet, a worker’s total minimum wage, at current price level, comes to Rs 8,892 – Rs 11,622 per month with regional variations, as against Rs 18,000 per month in January, 2016 price level calculated by the Seventh Central Pay Commission (CPC) using the current methodology. The Modi government at the centre and most of the state governments have already accepted and implemented the recommendations of the Seventh CPC. The central trade unions and federations made it as one of the major demands for implementation in all sectors – public and private – across the country and resorted to countrywide strikes for it.

What were the innovative methods which the expert committee used to cut workers minimum wages by about half? (i) First, by reducing per day per consumption unit calorie intake from 2700 to 2400; (ii) Second, by taking very low prices of food items; (iii) Third, by removing 20 per cent of total wage for fuel, light and on miscellaneous expenses and 25 per cent of the total as per Supreme Court judgement, and (iv) Fourth, by replacing all non-food expenditures, including house rent, with two broad categories -- essential non-food items and non-food items.

Publication and timing of the expert committee report has to be seen in the background of employers’ organisations challenging in the Delhi High Court the minimum wage notification, dated March 3, 2017, by the Delhi government. The High Court scrapped the notification, following which the Delhi government has moved the Supreme Court. The CITU Delhi state committee is an intervener party in the matter.

In its interim order of October 31, 2018, the Supreme Court turned down the Delhi High Court judgement, restored the minimum wages notification temporarily and ordered implementation of the notified minimum wages effective from November 1, 2018 till disposal of the case.

It also ordered the Delhi government to constitute a Minimum Wage Advisory Board strictly under the provision of the Act and on its advice, prepare a fresh draft of minimum wages notification and place the same before the Supreme Court for scrutiny and approval. The notified minimum wage for an unskilled worker in Delhi, calculated on the basis of current methodology is Rs 14,000 per month at January 2017 price level as against the expert committee’s Rs 11,622 at January 2019 price level. The next date of hearing is July 2, 2019.


The Code on Wages Bill, the first of the four labour codes proposing to replace all 44 existing labour laws, was placed in the now-dissolved 16th Lok Sabha. The Code on Wages Bill proposes to scrap the Minimum Wages Act, 1948. The current methodology of calculating minimum wages is an exercise to implement the Minimum Wages Act. Following scrapping of the Minimum Wages Act, the current methodology will have no relevance. The government aims to implement the expert committee’s methodology thereafter and it has already taken ILO on board for its assault on minimum wages of workers.


Wednesday, June 26, 2019

Child Care Allowance for Divyang Women -- PIB

     Consequent upon implementation of the recommendations of the 7th Central Pay Commission, the rates of special allowance for women with disabilities have been increased from Rs.1500 per month to Rs.3000 per month for child care which shall be payable from the time of child’s birth till the child is two years old. This special allowance shall be payable for a maximum of two eldest surviving children and would be automatically raised by 25% every time the Dearness Allowance on the revised pay structure goes up by 50%. It is effective from 1st July, 2017 and applicable to all Central Government disabled woman employees, irrespective of their place of posting, including in Uttar Pradesh.
       No specific information regarding the financial burden on Government exchequer in this regard available
          This information was provided by the Union Minister of State (Independent Charge) Development of North-Eastern Region (DoNER), MoS PMO, Personnel, Public Grievances & Pensions, Atomic Energy and Space, Dr Jitendra Singh in written reply to a question in Lok Sabha today.




(Release ID :190825)

Monday, June 17, 2019

Grant of Special CL for the purpose of blood donation .....

Condolences :: Comrade Shiv Gopal Mishra bereaved .......

          It is informed with great sorrow that the untimely accidental deaths of close family members of our JCM Secretary, Comrade Shiv Gopal Mishra. In a car accident near Bhopal Mrs.Prabhavathi Devi, wife of Com.Shiv Gopal Mishra  and Ms.Irisha Mishra, his granddaughter met with their demise on 11-06-2019. And on 15-06-2019 Shri Gaurau Mishra, son of Com.Shiv Gopal Mishra also succumbed to his injuries and breathed his last at Appollo Hospital, Delhi, where he was airlifted earlier.
        The tragedy struck on Com.Shiv Gopal Mishra and the loss of so many near and dear kith and kin in an accident is unbearable.
        Confederation, National Secretariat dips its flag as a mark of respect to the departed souls. Let nature give solace and strength to Com.Shiv Gopal Mishra and his other members of his family to overcome this colossal loss.

Secretary General