Wage Rate Index:
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Wage Rate Index is a vital economic indicator that measures changes in the wage level in selected industries.
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Released by: Labour Bureau, an attached office of the Ministry of Labour & Employment.
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Why in News?
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The Union Labour Ministry has revised the Wage Rate Index by setting the new base year at 2016 which will replace the old series with base of 1963-65.
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Change in Base year: The base year has been changed from 1963-65 to 2016.
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Half Year Basis: The new WRI will now be compiled on a half-year basis (on the first of January and July every year) as against the annual in the existing series.
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Basket of Goods: The previous series covered 21 industries. But the new one covers 37 including 30 from the manufacturing sector and three each from the mining and plantation sectors.
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Significance of the changes in the Wage Rate Index:
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The government periodically revises the base year for major economic indicators to reflect the changes in the economy and to capture the wage pattern of workers.
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Hence, the revised base will be more representative and play a critical role in determining the minimum wages and national floor wages, along with other parameters.
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Moreover, companies can use the data to finalize corporate strategies by comprehending the likely expenditure on employee compensation, consequent per unit cost, marketing strategy, and assessing the viability of the business.