In the context when South Asian economies are struggling to create adequate jobs, two sectors, namely tea and garment industries, have been playing a crucial role in providing significant employment opportunities to the vast labour force in South Asian countries, including Bangladesh, India, Nepal, Pakistan, and Sri Lanka. The tea plantation and garment sectors in South Asia share some common features that have relevance in discussing minimum wage. First, both sectors employ a large proportion of women workers and workers in these sectors come largely from socially disadvantaged groups. Second, both sectors are part of national and global value chains, where significantly larger proportions of profits are made at the retail end. This way, global market situations impact the end values, which in turn affect the economics of manufacture in the local country. Third, large income inequalities coexist with high rates of inflation across South Asia. Collectively, these factors adversely impact bargaining power and wages of workers.[1]

There is a lack of decent employment in tea and garment sectors in the region. For instance, the minimum wages in the tea sector in West Bengal and Assam are not implemented, and interim wages are often enacted, which are insufficient for workers to maintain a decent standard of living. Similarly, the minimum wages for tea plantation workers in other countries, including Nepal (NPR 500 per day) and Bangladesh (BDT 170 per day), are inadequate and do not increase in line with the inflation rate. Likewise, the minimum wage in the garment sector in Bangladesh, set at BDT 8,000, is also too low. Workers frequently have to struggle and protest for wage increases, and even when minimum wage adjustments are made, they often fall short of providing a decent living.

Amidst this background, LDC Watch/South Asia Alliance for Poverty Eradication (SAAPE) is organizing a panel discussion “Battling inequality in tea and garment value chains: Advancing beyond minimum wage to living wage” to discuss the wage and social protection issues in the two sectors at the World Social Forum on 17 February 2024. The panel discussion will further explore how workers can be socially and economically protected by going beyond the minimum wage and applying the living wage concept in the production and distribution chains, especially in the post-pandemic world. Importantly, we will hear from frontline CSOs on wage challenges, and how living wage would make a difference.

Speakers:

1. Babu Mathew (TBC), Keynote Speaker

2. Aabida Ali, Pakistan

3. Khalid Mahmood, LEF, Paksitan

4. Chamila Tusari, Sri Lanka

5. Sarinee Achavanuntakul, SalForest, Thailand

6. Mohiuddin Ahmed (TBC), Bangladesh

7. Garment Trade Workers Union, Bangladesh (TBC)

8. Sushovan Dhar, India

9. Santa Kumar Rai, Nepal

and more.

In the context when South Asian economies are struggling to create adequate jobs, two sectors, namely tea and garment industries, have been playing a crucial role in providing significant employment opportunities to the vast labour force in South Asian countries, including Bangladesh, India, Nepal, Pakistan, and Sri Lanka. The tea plantation and garment sectors in South Asia share some common features that have relevance in discussing minimum wage. First, both sectors employ a large proportion of women workers and workers in these sectors come largely from socially disadvantaged groups. Second, both sectors are part of national and global value chains, where significantly larger proportions of profits are made at the retail end. This way, global market situations impact the end values, which in turn affect the economics of manufacture in the local country. Third, large income inequalities coexist with high rates of inflation across South Asia. Collectively, these factors adversely impact bargaining power and wages of workers.[1]

There is a lack of decent employment in tea and garment sectors in the region. For instance, the minimum wages in the tea sector in West Bengal and Assam are not implemented, and interim wages are often enacted, which are insufficient for workers to maintain a decent standard of living. Similarly, the minimum wages for tea plantation workers in other countries, including Nepal (NPR 500 per day) and Bangladesh (BDT 170 per day), are inadequate and do not increase in line with the inflation rate. Likewise, the minimum wage in the garment sector in Bangladesh, set at BDT 8,000, is also too low. Workers frequently have to struggle and protest for wage increases, and even when minimum wage adjustments are made, they often fall short of providing a decent living.

Amidst this background, LDC Watch/South Asia Alliance for Poverty Eradication (SAAPE) is organizing a panel discussion “Battling inequality in tea and garment value chains: Advancing beyond minimum wage to living wage” to discuss the wage and social protection issues in the two sectors at the World Social Forum on 17 February 2024. The panel discussion will further explore how workers can be socially and economically protected by going beyond the minimum wage and applying the living wage concept in the production and distribution chains, especially in the post-pandemic world. Importantly, we will hear from frontline CSOs on wage challenges, and how living wage would make a difference.

Speakers:

1. Babu Mathew (TBC), Keynote Speaker

2. Aabida Ali, Pakistan

3. Khalid Mahmood, LEF, Paksitan

4. Chamila Tusari, Sri Lanka

5. Sarinee Achavanuntakul, SalForest, Thailand

6. Mohiuddin Ahmed (TBC), Bangladesh

7. Garment Trade Workers Union, Bangladesh (TBC)

8. Sushovan Dhar, India

9. Santa Kumar Rai, Nepal

and more.

[1] Mani, M. (2023). Minimum wages in tea plantation and ready-made garments sectors in South Asian Countries: A simple reader for workers and activists. Kathmandu: SAAPE. Retrieved from https://saape.org/files/Regional%20Paper_Minimum%20Wage_SA.pdf

In the midst of multiple crises that Nepal faces, there is a pressing need to improve domestic revenue mobilisation. This can be achieved by enhancing tax systems and administration, strengthening enforcement mechanisms, reducing tax evasion and avoidance, making taxation more progressive, and broadening the tax base to include sectors of the economy that were previously untaxed, including wealth and corporate windfall gains. Yet, the bright side observed in terms of high tax-to-GDP ratio downplays the twin problems of ‘revenue deficit’ and ‘anti-poor element’ in Nepal’s budgetary system. The indirect tax dominates the revenue collection. Regressive taxation system continues to perpetuate gender inequality in Nepal as it is women who are disproportionately affected because of the pattern of labour force participation, earning, and asset and property ownership, which are skewed against women. The overall burden of imposition of regressive taxation policy, that mainly includes levying high flat VAT rate on goods and services of common use, affects women more than men.

In terms of wealth taxation, land taxes, commonly called malpot and bhumi kar, were being levied since early in the history of Nepal. Historically, such taxation was highly regressive – large landowners were provided with tax-free lands while the peasants, who actually cultivate the land and feed the country, used to be taxed the highest. Since FY1959/1960, the central government has been collecting “house and land tax” or “unified house and land tax”, which since FY 2000/2001, is being collected by the local government. This tax is imposed on the value of the real estate. While malpot and bhumi kar are a few hundred Nepali rupees, the “house and land tax” apply in proportionate to the valuation of the assets. The underlying problem is that the valuation of assets by the government, especially in cities, is much less than the market value. Likewise, 10 per cent tax is levied on house rents which suffers from the same problem of underreporting and undervaluation.

In Nepal, there is, however, no provision of progressive net wealth tax – levied on an individual’s total wealth (including assets such as property, investments, cash, and other valuable assets) minus liabilities or debts owed. Similarly, registration fee is imposed during inheritance or transfer of ownership, but inheritance of property till three generations does not require any tax payment. Progressive forms of taxation, such as net wealth tax, corporate windfall tax, and inheritance tax are found to have huge revenue potential, but they are not yet introduced in Nepal.

 LDC Watch and SAAPE, in partnership with APMDD, TAFJA, TAFJA Nepal and Rural Reconstruction Nepal, plan to organize a consultation titled “Wealth Taxation in Nepal: Scope and Limitation” on 18 February 2023. One of the premier objectives of the consultation is to foster meaningful discussions among civil society members, parliamentarians and relevant stakeholders to deepen understanding of the net wealth taxation and its potential in raising revenue for public services as well as reducing economic inequality. The aim is to increase collaborative efforts and knowledge-sharing among the stakeholders, including parliamentarians, to develop effective policies and strategies that tackle economic inequality through progressive wealth taxation. The forum also aims to produce a set of policy recommendations that address the dual issues of economic inequality and progressive taxation, which can be shared with national/local governments and other stakeholders.

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