The International Labour Organization (ILO) has welcomed the Government of Telangana's decision to undertake the first comprehensive fixation of minimum wages since the state's formation in 2014, marking a significant milestone in advancing adequate wages, decent work, and social justice.
The reform also positions Telangana among the first states to demonstrate how evidence-based wage setting, informed by robust research and tripartite social dialogue, can support balanced labour market outcomes under India's recently implemented Code on Wages, 2019.
The revised minimum wage structure, announced by the Government of Telangana on 21 May 2026 and effective from 1 June 2026, introduces differentiated wage rates based on skill levels and geographical zones. Under the new structure, monthly minimum wage rates range from approximately Rs 14,000 to Rs 20,000, depending on the skill category and location of employment. The new wage structure is expected to benefit more than 9.2 million wage workers, representing nearly 48 per cent of total employment in the state, while improving income security, wage progression, and living standards for many low-paid workers and their families. The revision also represents an important step towards improving wage adequacy and advancing the broader objective of realizing the goal of living wages.
This landmark reform follows an extensive consultation process led by the Labour Department, Government of Telangana, and the Telangana Minimum Wage Advisory Board, which was constituted for the first time to recommend the new minimum wage levels.
The process was informed by evidence-based studies on the needs of workers and their families, as well as economic factors affecting enterprises and labour markets. At the request of the Government, the ILO supported the process through undertaking evidence-based studies, capacity building, and participation in the meetings of the Advisory Board as special invitees. A state-wide multi-stakeholder consultation workshop, organized jointly by the Labour Department and the ILO in January 2025, provided an opportunity for employers, workers, government representatives, and other stakeholders to contribute to the scientific fixation of the minimum wages.
In addition to revising wage levels, the reform significantly rationalised and simplified the minimum wage structure. The number of minimum wage rates was reduced from 1,548 rates across scheduled employments, occupations, zones, and skill categories to a maximum of 12 rates, based on four skill categories - unskilled, semi-skilled, skilled, and highly skilled workers - and three geographical zones. This simplification is expected to improve transparency, consistency, and ease of implementation while strengthening the effectiveness of the wage-setting system.
Michiko Miyamoto, Director of the ILO Office for India, said, "The Telangana minimum wage revision demonstrates the value of social dialogue and evidence-based policymaking. By taking into account both the needs of workers and their families and broader economic considerations, the state has taken an important step towards strengthening wage protection, promoting gender equality, and supporting inclusive growth. Telangana's experience provides an important example of how the principles of the Code on Wages, 2019 can be translated into practice through consultation, research, and consensus-building."
The wage fixation and review process was supported by technical evidence generated under the ILO's Setting Adequate Wages (SAW) Project, funded by the Netherlands. The project supports wage-setting mechanisms, including minimum wages and collective bargaining, in making stronger use of data and evidence on the needs of workers and their families and on relevant economic factors. It also contributes to raising awareness on living wages and engages with existing initiatives to promote alignment with ILO living wage principles, providing a broader framework within which reforms such as Telangana's can be understood as positive steps toward wage adequacy
The Government's review considered a range of factors, including changes in living costs, economic conditions, labour productivity, industrial competitiveness, and employment generation. The process also sought to improve transparency and strengthen institutional mechanisms for future wage revisions.
Harichandana Dasari, Principal Secretary, Labour, Employment Training and Factories Department, Government of Telangana, said, "This revision reflects the Government's commitment to ensuring that wage policies remain responsive to changing economic realities and the needs of workers and their families. The process was informed by extensive consultations and technical evidence, enabling the state to establish a more rational, transparent, and equitable minimum wage structure. We appreciate the technical support provided by the ILO and the constructive engagement of employers and workers throughout the process. The availability of objective evidence helped facilitate informed discussions within the Advisory Board and contributed to consensus-building among all stakeholders."
The reform is expected to have particular significance for low-paid workers, many of whom have faced increasing living costs in recent years. It is also expected to contribute to reducing wage disparities and improving labour market outcomes for women, who are disproportionately represented in lower-paid occupations and sectors.
Telangana's experience demonstrates how evidence-based policymaking, effective institutions, and meaningful social dialogue can contribute to more transparent and balanced wage-setting outcomes. As India advances the implementation of the Code on Wages, 2019, the lessons emerging from Telangana may provide useful guidance for other states undertaking similar reforms.
The ILO will continue to support the Government of Telangana and its social partners in strengthening evidence-based wage-setting mechanisms and promoting social dialogue. Building on this experience, the ILO will also continue supporting efforts to institutionalize regular and transparent wage reviews and strengthen the technical foundations of minimum wage policy in Telangana and across India.
