Labour a key issue for investors

Labour costs seem to have emerged as a major determinant of competitiveness among states, as they vie with each other in offering tax-related and other policy incentives to attract industrial investments.

According to the state industries secretary TS Appa Rao, the department is now presenting to potential investors “much better labour relations” in the state compared with other states.

“There is very little unrest among labour in the state, and we are mentioning this to investors in our discussions,” he told industrialists at the ManExe-2011.

However, he said the manufacturing sector was still finding it difficult to get labour at the wage level it offers, which is around Rs 150 a day. This was because the wages in agriculture have gone up to Rs 200- 250 per day.

CII-Andhra Pradesh chairman Jay Galla asked the government not to make wages uniform across the state because the cost of living differs from place to place.

“Uniform wages across the state would not encourage the industry to spread to rural areas,” he said, adding that industries were also against a proposal to double the minimum wages.

To this, Appa Rao said minimum wages were being set for each district now and that there was a big furore when the labour department tried to revise wages.

“Companies want to go only where there is cheap labour. So, even when the wages are revised, the labour department has assured us that these would be on a par with those prevailing in neighbouring states,” he said.