Karnataka’s government’s recent draft notification(proposal) to revise the minimum wages for workers has caused a stir in the state’s industries.
The draft notification proposes to raise wages from the current range of Rs 12,000-21,000 to Rs 25,000-31,000 per month, based on different skill categories skill level, has sparked protest from employers as a unilateral decision.
Small and medium-sized enterprises (SMEs), employers have raised their concern that the wage increase will be a big setback in continuing manufacturing operations.
The Peenya Industries Association (PIA), led by President R Shiva Kumar, has criticised the revision as a “unilateral decision” and warned of severe consequences for local businesses.
“We have already decided to shut down operations indefinitely or scale down considerably,” said Kumar, citing the financial strain such a policy would place on businesses already grappling with rising input costs.
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The Karnataka Small Scale Industries Association (KASSIA), representing over 700,000 members, also expressed its displeasure and dismay..
President MG Rajagopal highlighted that the state would become one of the highest wage-paying regions in India, possibly deterring future investment. “This decision could drive investors away rather than attract them,” Rajagopal warned.
The wage revisions are particularly challenging for industries that are already struggling with labor shortages and increasing operational costs. The added wage costs may lead to widespread job cuts, reduced expansion, and greater automation, according to industry leaders.
Furthermore, many in the sector feel that the government’s focus is skewed towards attracting large investors while neglecting the needs of the manufacturing sector.
Former PIA President Arif HM noted that despite the importance of industries like Peenya, local infrastructure remains inadequate, with many units having already shut down in recent years.
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