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Wednesday, 8 May 2019

Apparel manufacturers worry as minimum wage increased in Uttar Pradesh

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Continuously increasing minimum wage has become an issue for Indian apparel manufacturers, especially when controlling cost is one of the biggest focuses for the industry.

From 1st April, 2019 units in Uttar Pradesh are bound to give new increased minimum wage which is actually increased due to new dearness allowances. Now with the increased wage even a factory of 100 machines will have an extra average cost of Rs. 75,300 per month as such factory normally has at least 100 operator (skilled) and around 100 workers (unskilled or semi-skilled). As of now this increase is applicable till the end of September, 2019.

Minimum wage in Uttar Pradesh

Category old wage New wage Increase
Unskilled 7675 8012 337
Semi-skilled 8443 8814 371
Skilled 9457 9873 416
INR, per month

As wages increase on a regular basis, garment manufacturers are mentally prepared for the increased cost but they find helpless themselves.

“Buyers are insisting a lot to follow social compliance but don’t support us to give right price so apparel manufacturers are in a vicious circle. We are forced to work just to run our factories and not making money at all. Wage have to rise as the inflation is rising so buyers should also increase the price. There is no other way as tools to control costing like productivity enhancement and automation do have a limit.” – Uday Sehgal, Director, Mariko Plus (Garment manufacturer, Noida)

Many factories work on peace rate (paying per peace rather than minimum wage) they are also facing heat of increased minimum wage as their operators do demand for higher peace rate.

Earlier apparel factories moved from Delhi to Noida as Delhi has higher minimum wage compared to Noida. But now apparel manufacturers running factories in Noida don’t see any option as most of them are not comfortable to run factories in remote areas or the states where minimum wage is still low. Raw material availability and many other such reasons are the hurdles to develop factories in such states.

 

Source: https://in.apparelresources.com

    
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