An Economic Perspective of Labor Law in Manufacturing Sector (Liquor Industry) A Comparative Study Among the States of India

This article aims to provide insight into the fixing of minimum wages and how the economic aspects such as the cost of living index, consumer price index, and demand and supply of products play an essential role in it. This article focuses on the manufacturing sector, narrowing it down to the liquor manufacturing industry workers. The data on minimum wages were collected from the official websites of each government (labor commission). It is found that most of the states mostly focus upon the consumer price index and do not provide minimum wages industry wise and only few states fix minimum wages different for each type of industry. The Occupational wage survey identifies this issue and the productivity level of industries to be taken as a factor suggested for better welfare of workers.


INTRODUCTION
The Indian Constitution provides for the growth and development of Labour laws in India. The Part III of the Constitution acts as a benchmark for the Labour laws. The Minimum Wages Act,1948, was put into effect to stop employers from underpaying their workers. The Act applies to all types of businesses, factories, and enterprises. "Minimum wages" has been defined as the level of income for skilled and unskilled workers which ensures a sustaining standard of living while also providing for some measure of comfort as per the Indian Constitution. A minimum wage attempts not only to maintain a minimal level of employment but also to enable sustainable ongoing improvement. Its goal is to stop labor exploitation. Every person who works, has a right to reasonable and advantageous compensation, guaranteeing for himself and his family a life deserving of human dignity, according to the Universal Declaration of Human Rights. Employees and employers use the minimum wage and the cost of living to determine how much they should be paid for a job. The Cost of living index can be used for things like Evaluating the cost of living in various locations to discover a residence and workplace that is inexpensive, assisting you in determining whether your current income or a new wage offer would suffice to cover living expenses, stating if your promotion is due to an increase in the cost of living or the current rate of inflation Many contend that the cost of living is still more than the minimum wage offers, particularly for those supporting a family, even if minimum wage amounts have increased across a number of states. Inflation may also affect living expenses, which can exceed wages. It is difficult to balance wage rises that stay up with a changing economy because this number fluctuates as well. Main Street Alliance and Business for a Fair Minimum Wage have supported a substantial minimum wage increase. They claim that pay that more fairly represents the cost of living will lead to happier workers, more prospects for business growth, and an increase in consumer spending. Which leads to the benefit of the economy. The consumer price index and local purchasing power vary from region to region. The minimum wages for the employees who are working in the scheduled list of employment, the respective State Government or Central Government may fix it accordingly. Therefore, there will be variations in the minimum wages allotted for the industries provided in the schedule and for those not in it. Some of the industries in the schedule of one state need not be in other states. Alcohol is prohibited in the state of Gujarat and other states still have access to them.

BACKGROUND
MINIMUM WAGES: The ILO (International Labor Organization) defines Minimum wages as "the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract" 1 . The minimum wage is set by "The Appropriate Government" in accordance with section 3 of the Minimum Wages Act of 1948. Local, state, and Central governments are the appropriate government. This section establishes the rate in accordance with the hours, days, months, or any other authorized wage period. It is not required that the set rates be uniform. For different zones or areas, different tariffs might be set. The Payment of the Wages Act of 1936 will be followed if the wages are set in accordance with section 4 of the Act. The appropriate government must establish a pay commission with representatives from both the company and employee sides. As a result, the chairman of the salary committee shall be a neutral party with no stake in the employment program. The Minimum Wages Act's appointment procedure is designed in this way to prevent any possibility of labor discrimination. Section 7 of the Minimum Wages Act, the Advisory Board, proposes recommendations and changes to be brought in labor laws. The advisory board proposes a recommendation to the State and Central Government in fixing the minimum wages. Non-payment of the minimum wage with respect to the act, is a culpable offense which also implies violation of fixing hours also attracts the penal provision. Section 22 of the Act provides that non-compliance with the minimum wages act will lead to Imprisonment of up to 5 years and a fine up to 10,000. Unscheduled industries are frequently left out, however, during a review cycle, a state might include a minimum wage for a profession or specify it for a sector. MANUFACTURING INDUSTRY: 16-17% of the Pre-pandemic GDP for India was created by the manufacturing sector, which is expected to increase at one of the fastest rates. India is on the path to becoming a significant global manufacturing hub and has the capacity to export items worth US$ 1 trillion by 2030. With around 27.3 million jobs and 17% of the GDP, the manufacturing sector is a substantial contributor to the Indian economy. The Indian government wants manufacturing to account for 25% of economic production by 2025 through the implementation of several programs and policies. India now possesses the physical and technological infrastructure needed to increase the manufacturing sector's contribution to the economy and realistically compete for a key position in global supply chains. In India, one of the industries experiencing rapid expansion is manufacturing. To promote India's manufacturing sector and advance the nation's economy abroad, Indian Prime Minister Narendra Modi launched the "Make in India" initiative. The government intends to hire 100 million new workers in the sector by 2022. In the financial year 2019, the labor productivity growth of the manufacturing sector in India was 10.9 percent. 2014 saw the lowest increase in the prior six fiscal years, at 5.5 percent, and the highest growth, at 14.1 percent, occurred in 2016. For the two years of 2017 and 2018, the growth rate stayed constant at 7.6 percent. Due to problems with profitability and expansion, India's industrial sector is being compelled to undergo a layoff of the majority of its workforce. Currently, the manufacturing sector accounts for only 12% of the total employment of the workforce in India. In just four years, from 2011 to 2016, there was a considerable decline in manufacturing jobs, particularly in labor-intensive industries including food processing, tobacco, textiles, apparel, leather, and furniture. LIQUOR INDUSTRY: One of the world's fastest-growing marketplaces for beverages, India's spirits business has recently seen extraordinary expansion. The third-largest alcoholic beverage market in the world is found in India. The Indian Council for Research on International Economic Relations (ICRIER) anticipated that the market for alcoholic beverages in India would be worth 52.5 billion USD (or around Rs. 4 lakh crore) by 2020. Between 2020 and 2023, the market is anticipated to expand at a CAGR of 6.8% 2 . In India, the rate of alcohol use has increased during the past three decades. The quick recovery of alcohol during the epidemic demonstrates the enormous domestic market. Due to India's rapid population growth, 13 million persons of legal drinking age are born each year; of these, at least 3-5 million will eventually consume alcohol, indicating a significant rise in the country's overall alcohol consumption rate. In order to capitalize on the development potential in this business, numerous new Indian start-ups have joined the market with a variety of fresh concepts and intriguing new alcoholic beverages. The local, premium-level brands are outperforming their imported competitors in a wave of competition that is currently sweeping the Indian alcohol market. In the future years, these companies, with their novel concepts and distinctive charms, as well as their carefully chosen products, will transform the market. It's important to note that India's alcoholic beverage business is heavily regulated, and the nation's government places limitations on the nation's alcohol production, distribution, and sale. As a result, licensing, taxing, and other regulatory barriers may provide difficulties for the industry. The demand for premium and craft beers and spirits has increased recently, and there have also been more foreign players entering the market, contributing to the industry's expansion. As of 2019, the Indian alcoholic beverage business directly and indirectly employed about 4 million people, according to the Confederation of Indian Business (CII) research. Jobs in the manufacture, sale, marketing, and retail of alcoholic beverages, such as beer, wine, and spirits, are included in this. The research also predicted that by 2022, the sector could add 3 million new jobs.

COST OF LIVING INDEX:
The costs incurred for food, lodging, transportation, energy, clothing, entertainment, healthcare, and education are all included in the cost of living statistics. The cost of living index measures how much the cost of living increases over time and across different geographic areas. The cost of living can have an impact on a person's capacity to save for a home or pay off student loan debt, as well as on where they choose to work and reside. The cost of living index can show how basic costs grow over time and how need-based costs vary from town to town. For the calculation, we begin by giving a central reference city-which just so happens to be Prague-a value of 100 in order to determine the Price Index value for each city. The Price Index value of every other city in the database is then determined by comparing each city's cost of living to Prague's cost of living after the reference point has been established. Therefore, a city with a Price Index of 134 means that living there is 34% more expensive than it is in Prague 3 . Employees and employers use the minimum wage and the cost of living to determine how much they should be paid for a job. Summary of cost of living in India · Family of four estimated monthly costs: ₨133,538 · Single person estimated monthly costs: ₨58,854 · Asia's least expensive nation is India (13 out of 13). · India ranks first globally in terms of affordability (74 out of 74) 4 .

LOCAL PURCHASING POWER and CONSUMER PRICE INDEX:
The worth of a currency is determined by how many goods or services one unit of that currency can be used to purchase. It can become worse over time as a result of inflation. This is because higher prices could cause you to purchase fewer goods or services. The purchasing power of a currency is another term for it. Governments enact laws and regulations to safeguard a currency's purchasing power and maintain a thriving economy. To keep up with shifting circumstances, they also keep an eye on economic data. The progressive increase in the cost of a wide variety of goods and services is known as inflation. Your purchasing power-what you can buy with your money-may be reduced if inflation stays at a high level or spirals out of control. The CPI is one measure of inflation and purchasing power 5 . It determines the change in the weighted average of consumer goods and services prices over time, with a focus on transportation, food, and health care. The CPI can indicate both deflation and changes in the cost of living. A country's population's cost of living and changes in the purchasing power of its currency can both be determined using the CPI. By averaging the prices of the commodities included in the common basket, CPI tracks changes in their prices. The CPI has been found to be a reliable indicator of both price increases (also known as inflation) and decreases in prices (commonly known as deflation) 6 . The Labor Bureau has been compiling and maintaining the Consumer Price Index for Industrial Workers since 1944. Following then, the series underwent revisions from 1944 to 1949, 1949 to 1960, 1960 to 1982, 1982 to 2001, and 2001 to 2016. Since September 2020, the new series of the Consumer Price Index for Industrial Workers (CPI-IW) has been calculated using a base of 2016 = 100.These indices measure the relative changes in retail prices of fixed basket of goods and services consumed by industrial workers over a period of time 7 .

DEMAND AND SUPPLY OF PRODUCTS:
In economics, the relationship between the quantity of a good or service that producers want to sell at different prices and the quantity that consumers want to buy is known as supply and demand. It serves as the primary model for determining prices in economic theory. The interaction of supply and demand in a market determines the price of a good. The price mechanism in a free market adjusts supply and demand. Buyers will typically bid the price higher if they want to buy more of a good than is offered at the going rate. Suppliers will lower their pricing if they want to buy less than what is offered at the going rate. Thus, the price mechanism determines how many units of a good will be produced. The distribution of goods, i.e., how they are produced, dispersed, and who will receive them, is likewise determined by the price system. Consumer goods, services, labour, and other commodities may be included in the goods created and supplied in this way.

RESEARCH OBJECTIVE
The objective of this research is to see how the consumer price index, cost of living, and local purchasing power have an effect on the minimum wages of workers in the liquor manufacturing industry including breweries, and distilleries geographically. This research also aims to see how the demand and supply of liquor may affect the minimum wages provided by the liquor manufacturing sector.

RESEARCH HYPOTHESIS · There is a significant relation between the Cost of living index and minimum wages provided by employers. ·
There is a significant relationship between the demand and supply of liquor and minimum wages in the liquor industry. • KARNATAKA: It was the 4 th highest revenue collector from liquor in the year 2016 and now the 2 nd largest contributor of excise revenue with 20% share in India's total revenue. Karnataka is the third largest producer of alcohol with production of 1000 KLPD (Kilo Litre per day) and 300,000 KLPA (Kilo Litre per annum) 11 . Bangaluru is on the top 5 cities in India with highest Cost of living index and 113.1 as local purchasing power index. The government of Karnataka has set the minimum wags for the workers of Distilleries and Breweries with Cost of Living Allowance to be paid over and above 7616 points Cost of Living Index: 8398-7616= 782 points Zone 2 shall comprise all notified areas of the city Corporations of the State and agglomeration areas other than the places mentioned in Zone 1. Zone 3 shall comprise of all the District Head Quarters others than the places mentioned in Zone 1 and Zone 2. Zone 4 shall comprise of other areas which are not covered in Zone 1, Zone 2 and Zone 3 13 .

ECONOMIC FACTORS
• MAHARASHTRA: Maharashtra is the largest producer of alcohol with 58 industries of 2455 KLPD and 736,500 KLPA 14 and in third largest contributor towards the excise revenue with 17,477.40 crore revenue. It was also in the Third place in highest alcohol revenue 2016.The Cost of living of Mumbai is 81.53 making it the 3 rd city in the hierarchy of cost of living index but its Local purchasing power index is 52.9. Pune is another city of Maharashtra with 95.8 and local purchasing power index and Thane with 58.4, both higher than Mumbai. For a scientific analysis of the occupational wage structure in various industries and for the creation of a suitable wage policy, the availability of trustworthy statistics on wage rates and earnings in various industries, especially for diverse occupations, is of significant relevance. By interpreting the above data collected from each state's official website of the labor commission, we can see that few states have specifically allotted minimum wages for the liquor manufacturing industry and other states have set minimum wages as a bar for all the scheduled employments. Even though Uttar Pradesh is one of the leaders in the liquor industry, with more demand and supply, the minimum wages are set the same for all the scheduled employments. The total per day rate being 388 and 10089 for a month is relatively low than Punjab which is not even in the top 10 producers of liquor. Bihar also has the same level of minimum wage as Uttar Pradesh. Delhi also does not have a minimum wage set for its liquor manufacturing industry. But it being on top of the costliest city of India, with its high cost of living index, the territory's minimum wage is the highest compared to other states and union territories of India with a minimum of 17234 for unskilled workers.
Punjab and Madhya Pradesh also don't take the demand and supply of products, or the productivity level of manufacturers to fix the minimum wages for a particular industry as they take only the cost of living and consumer price index for minimum wages fixation. This can be inferred from the data as all the workers of the state are fixed with the same level of wages irrespective of the type of industry they work in.
On the other hand, the states of Karnataka and Maharashtra have fixed their minimum wages industrywise and allocate different levels of wages zone-wise also. Only a few states like Tamil Nadu, West Bengal, Karnataka, and Maharashtra have given employment-wise minimum wages. From this, we can infer that the state has taken the demand and supply and performance of the industry and its ability to pay the workers into consideration. Even the Zone 4 Unskilled workers in the state of Karnataka are paid more than the Skilled workers of the state of Uttar Pradesh. As far as the dearness allowance is compared, Tamil Nadu pays more than other states but it does not separate its area zone-wise. Maharashtra pays an equal amount of Dearness allowance to all of its employees irrespective of the industry they work in. But the minimum wages are varied according to the industry and are also almost near to Karnataka which pays more to its distillery workers.

SUGGESTIONS
From the findings of this research, the labor commission of ach state can follow the methods of Karnataka and Maharashtra by allotting minimum wages on the basis of zones (cost of living and consumer price index) as few places in a state can be well developed and other places in a developing stage. Similarly, by analyzing the production capacity, demand and supply of products produced, revenue earned of an industry, more minimum wages or less wages can be prescribed for the welfare of the employees. In this article only few states which are in the top 10 places in the liquor industry is used for interpretation. This is a limitation to know the geographical distribution of minimum wages in India.