Code on Wages Bill

The Union Cabinet of India has approved the Code on Wages Bill. This bill will subsume existing laws and make the code easier for doing business by various businesses in India.

What has happened?

  • The new code will subsume a total of 44 labor laws (with certain amendments) into 4 codes.
  • These 4 codes will be on wages, social security, industrial safety & welfare and industrial relations.
  • The new codes will reduce uncertainty and the lack of clarity in doing business in India.
  • The Bill had proposed empowering the states to fix different minimum wages based on the geography, skill, and occupation, along with a national-level minimum wage which will act as a floor.
  • An earlier attempt to pass the Code had failed in 2017.
  • This will help improve India’s ranking in the Ease of Doing Business Index in India.

Ease of Doing Business Index

The Ease of Doing Business (EDB) Index ranks various countries on the scale of aggregate scores of 10 topics. Each topic is consisting of several indicators and every topic has been given equal weight. The ease of doing business score captures the gap between an economy s performance and a measure of best practice across the entire sample of 41 indicators for 10 Doing Business topics The list is prepared by the World Bank.


India has been continuously improving its ranking in the Index. It’s a rare feat for a country as large and diverse as India to increase its ranking two years in a row. In 2018, India had improved its rank in 6 out of the 10 indicators of EDB. These 6 indicators are construction permits, Trading across Borders, Starting a business, Getting Credit, getting Electricity and enforcing contracts.





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