Wage and Productivity in selected Indian industries / J.N. Sinha and P.K. Sawhney

IN A DEVELOPING ECONOMY, wage policy is faced with a real conflict between the needs of workers for larger con sumption and the demands of the economy for a higher rate of capital formation. This conflict is reflected in the thinking of all responsible bodies on the issue of wage determination. Thus while there is considerable emphasis on the promotion of workers' well-being in the First Five Year Plan, it is pointed out "that rate of progress has to be determined not only by the needs of the workers but also by the limitations of the country's resources.... On the side of labour, there should be a keen realization of the fact that in an undeveloped economy, it cannot build for itself and the community a better life except on the foundations of a higher level of productivity to which it has itself to make a substantial contribution." Similarly, the Fair Wages Committee which was appointed by the Government of India to go into the whole question of wage fixation observed that "the objective is not merely to determine wages which are fair in the abstract, but to see that employment at exis ting levels is not only maintained but, if possible, increased. From this point of view, it will be clear that the level of wages should enable the industry to maintain production with efficiency."