In India, which of the following determines the wage policy?

The correct answer is Cost of Living

Key Points

• In India, wage policies are largely determined based on the cost of living, which includes the prices of essential goods and services like food, housing, and healthcare.
• The cost of living influences the minimum wage requirements for workers, ensuring that their wages are sufficient to maintain a basic standard of living.
• Adjustments to wages are often made to compensate for inflation and rising living costs to maintain purchasing power.

Important Points

• Productivity: While productivity is an important factor for determining wage increases, it is not the sole or primary determinant of wage policy in India.
• Standard of Living: The standard of living is influenced by wages, but it is not directly used to determine wage policy; it is the outcome of wage policy and other economic factors.

Additional Information

• The government periodically revises the minimum wage to reflect changes in the cost of living, which includes the inflation rate and other economic factors that impact the cost of essential goods and services.
• In India, organizations and governments also consider factors such as sectoral productivity and national economic goals while determining wage policies.