The Union Cabinet has approved the Wage Code Bill that increased the national minimum wage by merely Rs 2 to Rs 178 per day. This nominal hike was despite an internal labour ministry committee's recommendation of increasing it to Rs 375, a Live Mint report said.

The seven-member panel also suggested a housing allowance of Rs 1,430 for city workers in addition to the minimum monthly wage of Rs 9,750.

The 'mandatory national wage floor' is a provision for wages in the labour code which is basically the minimum wage floor at a national level set by the Centre (after the bill gets approved in the Parliament), below which any State cannot pay.

The decision comes a few days after the release of the Economic Survey of 2019, which in one of its chapters has provided a detailed suggestion of how the minimum wage system in India needs to be revised in a way that it helps tackle the problem of low wages and income inequality prevailing in the country.

Another report by New Indian Express says that the hike in minimum wages were not favoured by the employers. In June, the Confederation of Indian Industries (CII) said that states should have the power to determine minimum wages and that a national minimum wage would affect employment generation.

The decision is not expected to be received well by the worker's union which has been demanding higher wages to improve their lifestyle.