This paper is an attempt to look at the structure and trends of wages and earnings in the Indian labour market in the last two decades. It aims to provide a comprehensive picture of the variations in wage payments across different segments of the labour market and suggests policies to safeguard the interest of the most vulnerable in the labour market. It discusses the structure of the Indian workforce, the long term and short term trends in the real daily wage rates, along with a comparative picture of the preand post-liberalization scenarios of daily wages.

The paper shows that among both regular and casual workers, there has been a fall in growth in wages with increasing wage differential across different segments in the post-liberalization period. Female casual workers not only receive lower wages than their male counterparts, the differential is quite stark. Gender disparity of regular wages is on a rise in the rural sector. However, the overall gender differential in wages is declining over the years, implying a higher wage growth for female workers as compared to male workers. Non-farm wages in rural areas is higher than agricultural wages and the difference has widened during the post-liberalization period. Wage growth in the informal non-farm sector has decelerated and casual workers, particularly in the agricultural sector, have witnessed the slowest increase in wages during this period. Variation in wages across different industrial categories is more distinctive among urban casual workers with male average daily wage rates varying less across sectors.

Further, the paper points out that the increase in labour productivity has not been translated into increased growth in real wages, particularly for casual workers. The need to enhance the educational and skill capabilities of workers to combat poverty is highlighted. It shows that the Indian labour market has witnessed an overall setback in wage growth, particularly among the lower social strata of the workforce. The Minimum wages Act is poorly implemented, particularly in rural areas, and a large proportion of agricultural workers continue to get less than the prescribed minimum wages. Therefore, there is a need to make arrangements for the effective implementation of this Act. Overall, the paper argues that the low level of wages and the increasing wage differential across different segments of the labour market have resulted in widespread poverty among workers, particularly casual workers.