Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

Drafting labour code keeping in mind the realities of informal sector workers


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- Issues of the informal workforce

The article highlights the vulnerabilities of workers in the informal sector and also highlights the issues in the draft rules in the labour codes.


  • The budget referred to the implementation of the four labour codes.
  • There is also a provision of Rs 15,700 crore for MSMEs, more than double of this year’s budget estimate.

Impact of pandemic on informal workers

  • India’s estimated 450 million informal workers comprise 90 per cent of its total workforce, with 5-10 million workers added annually.
  • Nearly 40 per cent of these employed with MSMEs.
  • According to Oxfam’s latest global report, out of the total 122 million who lost their jobs in 2020, 75 per cent were lost in the informal sector.
  • The National Human Rights Commission recorded over 2,582 cases of human rights violation as early as April 2020.

Issues with the draft rules in labour code

  • The rush to clear the labour codes and form the draft rules shows little to no intent on part of the government to safeguard workers.
  • The draft rules envisage wider coverage through the inclusion of informal sector and gig workers, at present the draft rules apply to manufacturing firms with over 299 workers.
  • This leaves 71 per cent of manufacturing companies out of its purview.
  • The draft rules mandate the registration of all workers (with Aadhaar cards) on the Shram Suvidha Portal to be able to receive any form of social security benefit.
  • This would lead to Aadhaar-driven exclusion and workers will be unable to register on their own due to lack of information on the Aadhaar registration processes.
  • A foreseeable challenge is updating information on the online portal at regular intervals, especially by the migrant or seasonal labour force.
  • It is also unclear as to how these benefits will be applicable in the larger scheme of things.

Neglect of informal sector

  • The draft rules fail to cater to the growing informal workforce in India.
  • The growing informal nature of the workforce and the lack of the state’s accountability makes it a breeding ground for rising inequality.
  • The workers face the risk of violations of their human and labour rights, dignity of livelihood, unsafe and unregulated working conditions and lower wages.

Consider the question “Assess the impact of covid pandemic on workers in the informal sector. Also examine the issues with the draft rules in the labour code.”


The Code on Social Security was envisaged as a legal protective measure for a large number of informal workers in India but unless the labour codes are made and implemented keeping in mind the realities of the informal sector workers, it will become impossible to bridge the inequality gap.

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