A rational reform

The Code on Wages, 2019 represents India’s decisive step toward modernizing its labour landscape in response to the global demand for fairer, simpler, and more efficient regulation. By streamlining compliance, digitizing processes, and fostering collaboration between employers and regulators, the Code aligns Indian labour practices with international benchmarks of fairness and productivity. More than a legal reform, the Wage Code reimagines wage legislation as a catalyst for both economic growth and social justice

- 

In today’s globalized economy, where fair wages, decent work, and labour protection are central to sustainable development, the Wage Code, 2019 marks a pivotal shift for India, from enforcement to facilitation. Evidence from several developing nations such as Vietnam, shows how timely and well-designed labour reforms can drive economic growth while advancing social justice. Vietnam's overhaul of its labour laws, including minimum wage reforms and enhanced worker protections, has contributed to a surge in foreign investment and a steady rise in formal employment.

The International Labour Organization (ILO) has consistently underscored the urgency of ensuring fair wage practices as a cornerstone for achieving the Sustainable Development Goals (SDGs), particularly those relating to poverty reduction, decent work, and inclusive growth. At the same time, businesses worldwide have raised concerns about excessive regulatory burdens, complex compliance structures, and punitive enforcement mechanisms that hinder their ability to grow and compete in a rapidly changing global market. India, as one of the fastest-growing economies and a key player in the global labour market, is not immune to these challenges. With a vast workforce (53.53 crore) employed across both the formal and informal sectors (Economic Survey, 2021-22), the country has long faced the dual task of ensuring wage fairness for workers while simplifying compliance frameworks for employers.