Given the characteristics of Indian labour market minimum wage becomes very important. Indian labour market is characterized by huge excess supply of unskilled labour. This puts downward pressure on the market wages. Existence of huge excess army of labour may lead to stiff fall in wages, in certain cases, at an abnormally low level. Such low level of wages does not even ensure minimum sustenance and consequently non-fulfilment and reproduction of labour power.
This is a well-documented report that has analysed the impact of one year of Covid-19 in India, on jobs, incomes, inequality, and poverty. The rising inequality and loss of wages is really alarming. It says, “our analysis shows that the pandemic has further increased informality and led to a severe decline in earnings for the majority of workers resulting in a sudden increase in poverty. Women and younger workers have been disproportionately affected. Households have coped by reducing food intake, borrowing, and selling assets.