Despite recent minimum wage adjustments, Indian factory workers, especially in key industrial states, face stagnant real wages and a growing disparity with supervisory staff, as highlighted by recent analyses and global labour indices.
Key Points
- Uttar Pradesh recently increased the minimum wage by 21 per cent in Noida and Ghaziabad following worker protests over low pay.
- Average daily wages for factory workers in Uttar Pradesh and Haryana consistently lag behind the national average, with a 34-38 per cent rise compared to the all-India 45 per cent increase since 2016-17.
- A significant portion of India's factory workforce, about 41 per cent, is employed on contract, with Haryana having the highest share among the analysed states at 51 per cent.
- Supervisors and managers earn several times more than factory workers, with their daily wages significantly exceeding the national average for this category, highlighting a widening pay gap.
- India ranks 156th out of 164 nations on the labour and wage index, indicating poor performance among large economies, with real wages for industrial workers showing little growth over the past two decades.
The Uttar Pradesh government has revised the minimum wage by 21 per cent in Noida and Ghaziabad following recent protests by factory workers in the former over low pay. An analysis of factory workers’ wages in Uttar Pradesh, Haryana, and Delhi shows a widening disparity over the years.
Regional Wage Disparities
The average daily wage per worker has risen steadily across states and at the national level. However, Haryana and Uttar Pradesh continue to lag behind the national average. At the all-India level, the average daily wage increased from ~408 in 2016–17 to ~593 in 2023–24, a rise of 45 per cent. In comparison, Uttar Pradesh saw wages climb from ~361 to ~483 (34 per cent), while Haryana recorded an increase from ~401 to ~552 (38 per cent).
A large share of factory workers in India are employed on contract, accounting for about 41 per cent of the total factory workforce. In 2023–24, Haryana had the highest share of contractual workers among the three states at 51 per cent, followed by Uttar Pradesh at 37 per cent, while Delhi’s share was much lower at 10 per cent.
Growing Gap Between Workers and Supervisors
A sharp contrast is visible at the top: supervisors and managers earn several times more than factory workers and also exceed the national average. In 2023–24, their daily wages stood at ~5,127 in Haryana, ~4,122 in Uttar Pradesh, and ~3,447 in Delhi, compared with the all-India average of ~3,860.
Although strikes and lockouts in India have declined in recent years, most continue to occur in the private sector. Their number fell from 150 in 2015 to 41 in 2022. During this period, the private sector accounted for 76 per cent to 83 per cent of such protests.
India's Global Labour Ranking
India ranked lowest among large and Brics (Brazil, Russia, India, China, and South Africa) economies on the labour and wage index in 2024. According to an Oxfam report, the country stood at 156th out of 164 nations. Among the 11 largest economies by gross domestic product, India ranked lowest.
India has around 260,061 factories, of which about 82 per cent are operational.
On average, each factory employs about 72 workers and around nine supervisors and managers.
A report by Ashoka University’s Centre for Economic Data and Analysis, published in July 2024 and titled How Much Do India’s Factory Workers Earn On Average?
It observes that real wages of industrial workers have seen little growth over the past two decades and points to a widening gap between workers’ and supervisors’ pay since the 2000s.
“As such, the wage gap between the two categories of workers has been widening over the years,” the report said.
