Cashless and Clueless
FRONTLINE|January 20, 2017

The government takes the ordinance route to make wage payment through banks mandatory with no concern for its practical implications for small- and medium-scale industries or the large workforce which is not equipped for cashless transactions.

T.K. Rajalakshm
Cashless and Clueless

In one of his public meetings following the demonetisation announcement on November 8, Prime Minister Narendra Modi said workers would get their legitimate due if employers paid their wages into their bank accounts. Going cashless therefore was in the interests of the mazdoor, or the working class, it implied. What he left unsaid was the difficulties in opening accounts and activating them apart from the loss of daily wages for the day or two a worker had to take to draw his or her wages from the bank.

With the onus of pushing the idea of a cashless wage payment system on his Ministry, Union Minister for Labour and Employment Bandaru Dattatreya introduced a Bill in Parliament to amend the Payment of Wages Act, 1936, making it mandatory for establishments to make wage payments by cheque or through banks. But with just a day to go for the winter session of Parliament to end, the Bill could not be passed. Within a week, the Union Cabinet cleared an ordinance to put this into effect.

The Centre of Indian Trade Unions (CITU) and other central unions like the All India Trade Union Congress (AITUC) have criticised the ordinance route. Tapan Sen, CITU general secretary, described the decision as “unwarranted, especially when the entire banking sector in the country was in disorder”. He pointed out that 35 per cent of the habitations in the country were out of the coverage of bank branches and that a large chunk of workers, including in urban areas, in the low-paid unorganised sector did not have bank accounts. Compulsory bank payments would affect migrant workers too, he said, urging the government not to “indulge in undue haste”.

This story is from the January 20, 2017 edition of FRONTLINE.

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This story is from the January 20, 2017 edition of FRONTLINE.

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