OCCUPATIONAL WAGE SURVEY ( SIXTH ROUND 2006 )

REPORT ON TEA PROCESSING INDUSTRY

CHAPTER–III

WAGE RATES AND DEARNESS ALLOWANCE 

3.1         INTRODUCTION  

The availability of information on wages and earnings of workers is an important parameter to assess the wage level in the country.  If we consider the level of unemployment and under employment as an index of economic distress among the members of workforce, the level of wages and earnings of workers serve as an indicator of the economic prosperity of the working population. 

 

Ever since the introduction of planned economy, the living standards of the working population have become dependant, more or less, on levels of earnings.  Other types of income are at times, significant but for most of the workers, earnings from paid employment constitute the major source of income.  Earnings or take home wages/salaries, which provide means of livelihood, tend to conform to the income needed to enable the labour force to maintain its customary standard of living in the long run.  If the greater employment means the ability of a large number of persons to satisfy their needs, increased real earnings mean greater satisfaction of their wants.

 

3.2         WAGE RATES

 

In order to ensure comparability, the term ‘Wage Rate’, has been defined as the sum of basic wage and dearness allowance in respect of workers who receive both these components, while for other workers the actual consolidated amount of earnings represent wage rate.  The wage rates were collected for all the occupations.  The monthly, fortnightly or weekly wages actually paid are divided by the actual number of mandays worked to arrive at the daily wage rates.

 

3.3  AVERAGE DAILY WAGE RATES BY STRATUM

 

The details of average daily wage rates of the workers by Stratum and Sexage are presented in Table 3.1. A perusal of the Table reveals that the average daily wage rates in the Tea Processing Industry were Rs. 64.75 at all India level. At the stratum level, the lowest average daily wage rate of Rs. 59.05 was recorded by Assam, followed by Rs. 65.29 in West Bengal. On the other hand, the highest average daily wage rate of Rs. 86.92 was reported from Kerala, followed by Rs. 79.83 in Tamil Nadu. 

3.4  AVERAGE DAILY WAGE RATES BY SEXAGE 

The Table 3.1 reveals that average daily wage rates were reported at Rs. 65.03 for men, Rs. 63.82 for women and Rs. 24.36 for adolescent workers in the Tea Processing Industry. The average daily wages of women workers were reported to be less than that of the men workers in the entire strata in the Tea Processing Industry. The highest average daily wage rate of women workers was reported at Rs. 82.41 from Kerala, whereas, lowest average daily wage of women workers was reported at Rs.52.24 from Assam. 

 

3.5         AVERAGE DAILY WAGE RATE BY OCCUPATION AND SEXAGE

 

The average daily wage rates by occupation and sexage for all the workers employed in the Tea Processing Industry are presented in Table 3.2. The highest average daily wage rate at the occupation level was reported at Rs 132.54 in 'Mechanic (General)' occupation, followed by Rs. 123.41 in 'Fitter' and Rs. 121.09 in 'Electrician' occupations. The lowest average daily wage rate was reported at Rs. 52.37 in 'Fermenting Room Attendant' occupation, followed by Rs. 54.05 in 'Sign Maker' and Rs. 55.02 in 'Picker Coolie' occupations. The average daily wage rate was found to be more than Rs. 100 in just 6 occupations out of a total of 27 occupations reported in the Tea Processing Industry. However, it has been noticed that none of the women workers employed in Tea Processing industry was getting average daily wage rate of Rs. 100 or more.

 

The female workers were found employed in only 8 occupations out of a total of 27 reported occupations in the Tea Processing Industry. Out of these 8 occupations, in which female workers were employed, the average daily wage rates of female worker were higher than that of their male counterparts in 5 occupations, viz., 'Helper', 'Sweeper', 'Tea Sorter', 'Picker Coolie' and 'Withering Loft Attendant'.

 

3.6  TREND IN WAGE RATES AND REAL WAGE RATES

 

Trends in average daily wage rates of workers in Tea Processing Industry have been presented in Table 3.3. The Table reveals that there has been increasing trend in the average daily wage rates of workers in Tea Processing Industry.

 

In order to assess the improvement in the economic conditions of the workers, it is necessary to examine the data on real wage rates. The real wage rates for the year y1 have been worked out with reference to the All India Consumer Price Index Numbers by shifting its base to the year y0=100. Symbolically, the Real Wage Rates for the year y1 with respect to the year y0 may be defined as:

 

    1960AICPIy0         

    REy1  =  ---------- x Ey1   

    1960AICPIy1             

 

where,

 

Ey1

=

Actual earnings for the year y1

REy1

=

Real earnings for the year y1

1960AICPIy0

=

All India CPI Number for year y0 with base 1960=100

1960AICPIy1

=

All India CPI Number for year y1 with base 1960=100

 

     The real wage rates and percentage increase in real wage rates in a round with respect to that in the previous round in the Tea Processing Industry have been depicted in Table 3.3. The Table reveals that the real wage rates of the workers increased at the rate of 20.86 per cent during the sixth round as compared to that during the fifth round.

 

 

3.7  DEARNESS ALLOWANCE

 

Dearness Allowance (DA) is paid to the employee to compensate them for erosion in the wages due to increase in the price level.  The system of payment of DA has its own diversity and disparity in the pattern of payment of remuneration to employees. A fairly large number of industrial establishments in the country pay a separate allowance known as the dearness allowance to supplement the wages of their employees or to neutralize the impact of rising prices on the wage earnings. It includes any payment made to protect the employees against the inflation and rising prices, viz., dearness allowance (DA), variable dearness allowance (VDA), interim relief, dearness pay, etc.  Since the payment of dearness allowance is not occupation specific, therefore, the information collected during the survey covered all employees in the sample units.

 

3.7.1 EXTENT OF DEARNESS ALLOWANCE PAYMENT 

Stratum-wise number of units paying DA as a separate component of wages/salaries is given in Table 3.4.  It is observed that 87.08 per cent of the units covered in the survey are paying dearness allowance as a separate component of wages/salaries in the Tea Processing Industry.  It is further observed that hundred per cent units are paying dearness allowance in two strata, viz., West Bengal and Kerala in the Tea Processing Industry. The lowest percentage of units paying dearness allowance was observed in Tamil Nadu (56.40 per cent), followed by Residual Stratum (70.83 per cent). In Assam, 91.24 per cent of units were paying dearness allowance as a separate component of wages to their employees.   

Out of the total units paying dearness allowance to their employees, 82.45 per cent of the DA paying units were reported to be using CPI Numbers brought out by Labour Bureau for payment of DA to their employees. Only 1.85 per cent of the DA paying units were using CPI Series brought out by State Governments. The remaining 15.70 per cent of the DA paying units were paying dearness allowance to their employees without using any CPI Series. In Assam and West Bengal Strata, all the DA paying units were using CPI Numbers brought out by Labour Bureau. In Kerala, however, none of the DA paying units was using Bureau or State Series of CPI Numbers for payment of DA to their employees. In Tamil Nadu, only 26.67 per cent DA paying units were using Bureau Series of CPI Numbers and rest of 73.33 per cent DA paying units were using other mechanism for payment of DA to their employees. 

It is further observed that all the units using Labour Bureau’s CPI Numbers for payment of dearness allowances to its employees, were using CPI Numbers with Base Year 1982=100 in the Tea Processing Industry.

 

While analysing data on the percentage use of Labour Bureau’s Consumer Price Index centres, it is observed that all the units were using only All India Consumer Price Index Number (AICPI).

 

3.7.2 EXTENT OF EMPLOYEES RECEIVING DEARNESS ALLOWANCE

 

Table 3.5 reveals that only 29.58 per cent employees were getting dearness allowance in the Tea Processing Industry. However, it is observed that all the employees were getting dearness allowance in Kerala. The lowest percentage of employees receiving dearness allowance was reported in Assam (13.54 per cent) followed by Tamil Nadu (14.77 per cent).

 

3.7.3 PERCENTAGE DISTRIBUTION OF UNITS PAYING DEARNESS ALLOWANCE BY CRITERION FOR PAYMENT

 

A variety of methods and procedures are adopted by industrial units for computation and payment of dearness allowance to their employees.  The methods followed by units are either according to changes in Consumer Price Index Numbers or linked to Pay Scales/Slabs or paid at a Flat Rate or combination of all these systems.  Distribution of dearness allowance paying units by system of DA payment is presented in Table 3.6. The Table reveals that only two of the above mentioned methods were in force in varying degrees in the Tea Processing Industry. Majority of the DA paying units (84.28 per cent) was paying dearness allowance according to changes in Consumer Price Index Numbers, whiles the remaining 15.72 per cent DA paying units were paying DA at Flat Rates.