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

Where are we headed?

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

Rising unemployment is yet to receive the attention it deserves from government


From UPSC perspective, the following things are important :

Prelims level : LFPR

Mains level : Paper 3- Rising unemployment


India’s unemployment rate in August was 8.3 per cent. This was higher than the 7 per cent recorded in July. The month-to-month variations notwithstanding, these are all very high unemployment rates.

Why inflation gets more attention in India than unemployment?

  • Periodic Labour Force Survey (PLFS) results showed the historically high unemployment rate of 6.1 per cent for 2017-18 (July to June). It was at a 45-year high.
  • New norm at 7-8 per cent: Till then, India was used to recording an unemployment rate of around 3 per cent. 
  • Today, an unemployment rate of 7-8 per cent seems to be the norm and such levels do not seem to matter.
  • The unemployment rate is not the most important labour market indicator for a country like India.
  • Why inflation gets preference: Between inflation and unemployment, the two economic indicators conjoined theoretically by the Phillips curve, it is inflation that wields political power.
  • Inflation hurts almost the entire population.
  • Equally importantly, high inflation rates can upset financial markets that in turn exert pressure on regulators to keep inflation in control.
  • Unemployment directly impacts only the unemployed, who don’t count much.
  • Worse still, society perceives being unemployed as an individual shortcoming, and not an outcome of a macroeconomic malaise.

What does low labour force participation rate (LFPR) indicate about the labour market in India?

  • The unemployment rate is a measure of the economy’s inability to provide jobs only for those who seek work.
  • But, in India, very often people do not look for jobs in the belief that none are available which is reflected in a low labour force participation rate (LFPR).
  • India’s LFPR is at around 40 per cent when the global rate is close to 60 per cent.
  • It is important that this belief in the futility of a job hunt is overcome by an explosive creation of new good quality formal jobs.

Why employment rate is a useful indicator for India

  • A useful labour market metric for a country like India is the employment rate.
  • This measures the proportion of the population over 14 years of age that is employed.
  • The definition of employment needs to be changed, at present, engaging in some economic activity for just one hour in any of the past seven days is counted as employment.
  • India’s record in providing employment to its people has been abysmally poor.
  • CMIE’s definition of employment indicates that in 2016-17, only 42.8 per cent of the working-age population was employed.
  •  In the year of the pandemic, it fell to 36.5 per cent.

Reverse migration in employment from manufacturing to low productivity employment

  • People are moving away from factories as manufacturing jobs shrink, to farms that provide shelter largely in the form of disguised unemployment.
  • It cannot be the desire of a nation to move people away from high productivity, better quality jobs in manufacturing to low productivity employment in agriculture or as gardeners or security guards in the household sector.
  • Employment opportunities need to expand in areas where labour is deployed to deliver higher productivity for enterprise and higher returns to labour.

Way forward

  • Increase investment: A large part of the solution to this lack of adequate jobs is in increasing investments.
  • Focus on demand size: For this, the investment climate needs to be business-friendly and government interventions must shift away from supply-side support to spurring demand.


The government needs to come up with policies for generating employment opportunities and stemming the reverse migration from manufacturing jobs to low productivity employment.

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



From UPSC perspective, the following things are important :

Prelims level : E-Shram Portal

Mains level : National database for workers: Prospects and challenges

The E-Shram portal has come into existence more than a decade after the passage of the Unorganized Workers’ Social Security Act in 2008.


  • On August 26, 2021, the Ministry of Labour and Employment (MOLE) launched the E-Shram, the web portal for creating a National Database of Unorganized Workers (NDUW), which will be seeded with Aadhaar.
  • It seeks to register an estimated 398-400 million unorganized workers and to issue an E-Shram card.

Better late than never move

  • It has come about even after repeated nudging by the Supreme Court of India.
  • It is the result of state apathy.
  • Had the Central and the State governments begun these legally mandated processes on time, much of the distress of lakhs of vulnerable workers would have been avoided.
  • In fact, the political class owe an ‘apology’ to informal workers.

Issues with E-Shram

(A) Time constraints

  • Long process: Given the gigantic nature of registering each worker, it will be a long-drawn process.
  • No gestation period: The Government has not mentioned a gestation period to assess its strategy and efficiency.
  • No hasty process: Employers are or required their workers to register even.While the Government can appeal to them, any penal measure will hurt the ease of doing business.

(B) Pandemic hides

  • Considering the estimated 380 million workers as the universe of registration — debatable as the novel coronavirus pandemic has pushed lakhs of workers into informality.

(C) Data security

  • Privacy: One of the vital concerns of e-portals is data security, including its potential abuse especially when it is a mega-sized database.
  • No national framework yet: There are also media reports pointing out the absence of a national architecture relating to data security.
  • Local server issues: It has been reported that in some States such as Maharashtra, the server was down for a few days.

(D) Structural issue

  • Aadhaar seeding: Many workers will not have an Aadhaar-seeded mobile or even a smartphone. Aadhaar-seeding is a controversial issue with political overtones, especially in the North-eastern regions.
  • Eligibility: There are several issues concerning the eligibility of persons to register as well as the definitional issues.
  • Exclusion: By excluding workers covered by EPF and ESI, lakhs of contract and fixed-term contract workers will be excluded from the universe of UW. Hazardous establishments employing even a single worker will have to be covered under the ESI, which means these workers also will be excluded.
  • No benefits for the aged: The NDUW excludes millions of workers aged over 59 from its ambit, which constitutes age discrimination.

(D) Complex identities of workers

  • Migration: Many are circular migrant workers and they quickly, even unpredictably, move from one trade to another.
  • Mixed work: Many others perform formal and informal work as some during non-office hours may belong to the gig economy, for example as an Uber taxi or a Swiggy employee. They straddle formal and informal sectors.
  • Gig workers: Even though MOLE has included gig workers in this process, it is legally unclear whether the gig/platform worker can be classified first as a worker at all.

(E) Other impediments

  • Dependence on States: The central government will have to depend on the State governments for this project to be successful.
  • Lack of coordination: In many States, the social dialogue with the stakeholders especially is rather weak or non-existent. The success of the project depends on the involvement of a variety of stakeholders apart from trade unions.
  • Corruption: There is also the concern of corruption as middle-service agencies such as Internet providers might charge exorbitant charges to register and print the E-Shram cards.

Benefits: No immediate carrot

  • Workers stand to gain by registration in the medium to long run.
  • But the instant benefit of accident insurance upto ₹0.2 million to registered workers is surely not an attractive carrot.
  • The main point of attraction is the benefits they stand to gain during normal and crisis-ridden periods such as the novel coronavirus pandemic now which the Government needs to disseminate properly.

Way forward

  • E-Shram is a vital system to provide hitherto invisible workers much-needed visibility.
  • It will provide the Labour Market Citizenship Document to them.
  • The govt should go one step further for triple linkage for efficient and leakage-less delivery of all kinds of benefits and voices to workers/citizens: One-Nation-One-Ration Card (ONOR), E-Shram Card (especially bank account seeded) and the Election Commission Card.
  • Last but not least, registrations cannot be a source of exclusion of a person from receiving social assistance and benefits.

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

Right to Sit to be mandated in Tamil Nadu


From UPSC perspective, the following things are important :

Prelims level : Right to Sit

Mains level : Labour reforms

The Tamil Nadu government has tabled a Bill in the Legislative Assembly making it mandatory for establishments to provide seating facilities for employees.

Right to Sit

  • The Right to Sit is aimed to benefit thousands of employees of large and small establishments, particularly those working in textile and jewelry showrooms.
  • Persons employed in shops and establishments in the State are made to stand throughout their duty time resulting in varied health issues.
  • The bill mandates for every premises of establishments to have suitable seating arrangements for all employees so that they may take advantage of any opportunity to sit in the course of their work.
  • This would avoid the ‘on their toes’ situation throughout the working hours.

Inspired from Kerala

  • A few years ago, workers of textile showrooms in Kerala had gone on a protest demanding the ‘Right to Sit’, prompting the government there to amend the Kerala Shops and Establishments Act in 2018.
  • This in turn provided seating arrangements for them.

A move for women

  • Most owners of shops and other retail outlets forbid women, the bulk of the shop workforce, to sit.
  • Even leaning against a wall was punished. They have varicose veins and joint pain from standing.
  • Toilet breaks were strictly limited. This has led to urinary infections, kidney problems.

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

[pib] E-Shram Portal:  National Database on Unorganized Workers (NDUW)


From UPSC perspective, the following things are important :

Prelims level : E-Shram Portal

Mains level : Welfare of the unorganized workers

The Union Ministry of Labour & Employment will launch the e-Shram portal – National Database on Unorganized Workers (NDUW).

What is the E-Shram Portal?

  • The government aims to register 38 crore unorganized workers, such as construction labourers, migrant workforce, street vendors and domestic workers, among others.
  • The workers will be issued an e-Shram card containing a 12-digit unique number, which, going ahead, will help in including them in social security schemes.
  • The government had earlier missed deadlines for creating the database, inviting criticism from the Supreme Court.

How will the registration for workers happen on the portal?

  • The registration of workers on the portal will be coordinated by the Labour Ministry, state governments, trade unions and CSCs.
  • Awareness campaigns would be planned across the country to enable nationwide registration of workers.
  • Following the launch of the portal, workers from the unorganized sector can begin their registration from the same day.
  • A national toll free number — 14434 — will also be launched to assist and address the queries of workers seeking registration on the portal.
  • A worker can register on the portal using his/her Aadhaar card number and bank account details, apart from filling other necessary details like date of birth, home town, mobile number and social category.

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

The shaky foundation of the labour law reforms


From UPSC perspective, the following things are important :

Prelims level : One Nation One Ration Card

Mains level : Paper 2- Labour law reforms in issues in implementation


The central government has deferred the possible date of implementation of labour codes to October 1, 2021, prolonging the wait before employers and workers could enjoy the benefits extended by the labour codes.

Labour law reforms: Key provisions

  • The government enacted the Code on Wages in August 2019 and the other three Codes, viz., the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code and Code on Social Security (CSS) in September 2020.
  • Universal minimum wage: The codes would extend universal minimum wages and social security, enable enhanced industrial safety and the provision of social security to gig workers, among other things.
  • Recognition of trade unions: The Industrial Relations Code provides for recognition of trade union(s) by employers, a labour right that eluded workers for seven decades.
  • Flexibility to employers: Employers celebrated the extension of tremendous flexibility to them, even those unasked, such as relief from framing standing orders for most firms.
  • The central government has deferred the possible date of implementation to October 1, 2021.

Issues in implementation

  • State’s have not issued draft rules: Major States such as Tamil Nadu, Kerala, West Bengal, Maharashtra, Haryana and Delhi have not issued the draft rules under any codes.
  • Even though the Code on Wages was enacted in August 2019, it was only in March 2021 that the central government notified the constitution of an advisory committee.
  • Safety concerns persist:  Industrial safety continues to be a grave concern even after the enactment of the Occupational Safety, Health and Working Conditions Code.
  • Lack of clarity on the determination of minimum wage: On June 3, 2021, the government announced an expert committee with a tenure of three years to advise on minimum wages.
  • Then, on July 12, 2021, the government announced that the wage index’s base year would be shifted from 1965 to 2019 to use the revised wage index to determine minimum wages.
  • The Government seems to be facing difficulty regarding the implementation of minimum wages.


Despite the gazetting of four Codes, age-old laws are in force. That reflects poorly on the governance abilities of the governments.

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

Emigration Bill 2021 does not go far enough


From UPSC perspective, the following things are important :

Prelims level : Emigration Act 1983

Mains level : Paper 2- Emigration Bill 2021


The Emigration Bill 2021 could be introduced in Parliament soon and presents a long-overdue opportunity to reform the recruitment process for nationals seeking employment abroad.

An overview of Emigration Act 1983

  • Labour migration is governed by the Emigration Act, 1983.
  • The Act sets up a mechanism for hiring through government-certified recruiting agents — individuals or public or private agencies.
  • It outlines obligations for agents to conduct due diligence of prospective employers,
  • Sets up a cap on service fees.
  • Establishes a government review of worker travel and employment documents (known as emigration clearances) to 18 countries mainly in West Asian states and South-East Asian countries.

What are the improvements in Emigration Bill 2021?

  • It launches a new emigration policy division.
  • It establishes help desks and welfare committees.
  • It requires manpower agencies to conduct pre-departure briefings for migrants.
  • It increases accountability of brokers and other intermediaries who are also involved in labour hiring.

Shortcoming in Emigration Bill 2021

  • Lacks human rights framework: The 2021 Bill lacks a human rights framework aimed at securing the rights of migrants and their families.
  • For example, in a country such as the Philippines, it explicitly recognises the contributions of Filipino workers and “the dignity and fundamental human rights and freedoms of the Filipino citizens”.
  • Workers to bear recruitment payments and service charges: the Bill permits manpower agencies to charge workers’ service fees, and even allows agents to set their own limits.
  • This provision goes against International Labour Organization (ILO) Private Employment Agencies Convention No. 181 and the ILO general principles and operational guidelines for fair recruitment.
  • The ILO Convention and guidelines recognises that it is employers, not workers who should bear recruitment payments including the costs of their visas, air travel, medical exams, and service charges to recruiters.
  • Criminalise worker: The Bill permits government authorities to punish workers by cancelling or suspending their passports and imposing fines up to ₹50,000 for violating any of the Bill’s provisions.
  • Criminalising the choices migrant workers make is deplorable, runs contradictory to the purpose of protecting migrants and their families, and violates international human rights standards.
  •  Recruiters and public officials could misuse the law to instil fear among workers and report or threaten to report them.
  • Gender dimension not adequadely addressed: This Bill does not also adequately reflect the gender dimensions of labour migration where women have limited agency in recruitment compared to their counterparts.
  • Women are more likely to be employed in marginalised and informal sectors and/or isolated occupations in which labour, physical, psychological, and sexual abuse are common.
  • Limited space for representation: The Bill also provides limited space for worker representation or civil society engagement in the policy and welfare bodies that it sets up.

Way forward

  • The Ministry of External Affairs must start at the top, and draft a clearer purpose which explicitly recognises the contributions of Indian workers, the unique challenges they face, and uphold the dignity and human rights of migrants and their families.


The new Bill is better than the Emigration Act 1983, but more reforms are needed to protect Indian workers.

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

Revival of Construction sector


From UPSC perspective, the following things are important :

Prelims level : GVA

Mains level : Paper 3- Limits of relying on high-growth sectors


The latest estimates of the fourth quarter of financial year 2020-21 (January-March) brought some relief, for policymakers.

Interpreting the construction sector GVA increase

  • The construction sector showed a 15 per cent increase in gross value added (GVA) in the last quarter, which is nearly double the growth experienced by the sector in the previous year (7.7 per cent).
  • Sign of better times: The buoyant growth of this sector has been hailed by policymakers not just as a sign of better times to come,
  • Addressing distress: Growth in the construction sector is also considered as the capacity of the economy to address the distress that households have faced in the past year.
  • Addressing needs of workforce: The Chief Economic Advisor pointed to the high growth rates in construction possibly to indicate that growth would address the needs of the beleaguered workforce.
  • The Union budget 2021 has also allocated a considerable sum towards infrastructure and construction in the hopes of the sector playing a catalysing role.

Issues with relying on the growth of high-employment sector

  • No strong correlation: While GVA and/or GDP are considered as indicators of economic health, it has been argued in detail how it may not be prudent to rely on these alone as measures of economic welfare.
  • In particular, mere growth in a sector may not necessarily translate into benefits for its workers.
  • In the last quarter of 2019-2020, when construction GVA grew at nearly 8 per cent, employment in the same sector grew by 3 per cent based on our estimates from CMIE-CPHS.
  • Fallback employment option: The fact that employment grew in this sector even during a crisis year is largely because of the fact that the construction sector emerged as a fallback employment option for many displaced workers.
  • During “normal” times, the sector typically employs only about 10-15 per cent of India’s total workforce.
  • Even if this sector were to expand in line with its GVA growth, it will not be able to provide employment beyond a certain level.
  • Employment alone is not enough: Moreover, employment alone is not enough.
  • Earnings for an average daily wage worker in the sector have actually declined this year.
  • Again, the overall economic growth in GVA in the sector has not been passed on to the workers.

Way forward

  • Any relief effort that relies solely on economic growth as a means to uplift workers will be sorely inadequate as we see from the experience of workers in construction.
  • The need of the hour is to go beyond relying on sectoral growth as a means of delivering relief to workers.
  • Direct transfers of cash and food are also needed, as is livelihood support through employment guarantee programmes.


While boosting growth of high-employment sectors is one strategy to adopt, this has its limitations. The capacity of a sector is limited in terms of the number of workers that it can absorb, and the extent to which growth can benefit workers.

Back2Basics: What is GVA?

  • Gross value added (GVA) is an economic productivity metric that measures the contribution of a corporate subsidiary, company, or municipality to an economy, producer, sector, or region.
  • GVA is essentially a measure of the “net” value of output — deducting the cost of any input that went into its production from its total value.
  • GVA thus adjusts gross domestic product (GDP) by the impact of subsidies and taxes (tariffs) on products.

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

[pib] Periodic Labour Force Survey (2019 –2020)


From UPSC perspective, the following things are important :

Prelims level : PLFS

Mains level : Unemployment in India

The Periodic Labour Force Survey (PLFS) Annual Report for July, 2019 to June 2020 was recently released by the National Statistical Office (NSO).

Periodic Labour Force Survey

  • Considering the importance of the availability of labor force data at more frequent time intervals, National Statistical Office (NSO) launched PLFS in April 2017.
  • The objective of PLFS is primarily twofold:
  1. to estimate the key employment and unemployment indicators (viz. Worker Population Ratio, Labour Force Participation Rate, Unemployment Rate) in the short time interval of three months for the urban areas only in the Current Weekly Status (CWS).
  2. to estimate employment and unemployment indicators in both ‘Usual Status’ and CWS in both rural and urban areas annually.

Various dimensions of the survey

The PLFS gives estimates of Key employment and unemployment Indicators:

  • Labour Force Participation Rate (LFPR): LFPR is defined as the percentage of persons in the labor force (i.e. working or seeking or available for work) in the population.
  • Worker Population Ratio (WPR): WPR is defined as the percentage of employed persons in the population.
  • Unemployment Rate (UR): UR is defined as the percentage of persons unemployed among the persons in the labor force.
  • Activity Status- Usual Status: When the activity status is determined on the basis of the reference period of the last 365 days preceding the date of the survey, it is known as the usual activity status of the person.
  • Activity Status- Current Weekly Status (CWS): The activity status determined on the basis of a reference period of the last 7 days preceding the date of the survey is known as the CWS of the person.

Highlights of the third report

  • The Labour force participation ratio has increased to 40.1% in 2019-20 from 37.5% and 36.9%, respectively, in the last two years.
  • Worker population rate improved to 38.2% in 2019-20 compared with 35.3% in 2018-19 and 34.7% in 2017-18.
  • The unemployment rate fell to 4.8% in 2019-20. In 2018-19, it stood at 5.8% and 6.1% in 2017-18.

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

Need for social security to migrant and informal workers


From UPSC perspective, the following things are important :

Prelims level : Recommendation 202

Mains level : Paper 2- Social security for migrant labour


The migrants’ crisis after the two covid waves compelled policy-makers to make certain provisions for them in the schemes announced for the assistance of the poor.

Supreme Court judgement on the issue

  • On June 29, the Supreme Court finally delivered its judgment on the plight of migrant labour.
  • The judgement was notable for two main reasons.
  • First, it recognised that there was the large-scale exclusion of migrant workers and other informal workers from existing schemes due to the lack of their registration and outdated eligibility lists.
  • It noted that no benefits will be denied to migrant workers for want of an Aadhaar card and that food assistance will be provided for migrants who were not covered by the National Food Security Act.
  • Second, it connected informal workers and migrant workers, both of whom experience exclusion, and mandated that the portal for registration of all informal/migrant workers should be fully operational before July 31.

Advantages of providing social protection

  • Investment in social protection is not charity, it is an investment in workers’ productivity and in equitable growth.
  • Providing social protection is, as the UN mooted in 2009 when it spelt out the social protection floor (SPF) initiative after the global financial crisis, the surest way out of a crisis by boosting demand at the bottom of the pyramid.
  • The report of the Advisory Committee of the ILO, in which India was represented by its labour secretary, provides a strong rationale for instituting a universal SPF during economic crises.
  • As a result, all constituents of the ILO adopted Recommendation 202 on social protection floors at the International Labour Conference in 2012.

Inadequate provisions by government

  • The Unorganised Workers’ Social Security Act, was approved by Parliament in December 2008.
  • But it lacks the mandatory elements of the NCEUS’s proposals and included neither a National Minimum Social Security Package, nor the provision for mandatory registration.
  • Estimates show that the central government’s expenditure on all major social protection programmes declined from 1.96 per cent of GDP in 2008-09 to 1.6 per cent in 2013-14 and to only 1.28 per cent in 2019-20.

Way forward

  • The National Commission for Enterprises in the Unorganised Sector (NCEUS) had pointed out that the circular migrant workers were a disadvantaged segment among informal workers.
  • Comprehensive law: The NCEUS had advocated a comprehensive law for the protection of the rights of all informal workers, including migrants, home workers, and domestic workers.
  • Universal registration: NCEUS had also recommended a universal registration mechanism based on self-declaration, with the issuance of a smart social security card, and a National Minimum Social Security Package.
  • Guaranteed social security/social protection: We need the provision of a minimum level of guaranteed social security/social protection for all informal workers and their households within a definite time frame.
  • More public spending: Guaranteed social protection would involve a clear framework and a commitment to greater public resources being spent on social protection as a large class of workers in India do not have an identifiable employer and a contributory social insurance framework will not work for them.
  • Recommendation 202: Government should embrace ILO’s Recommendation 202 and work towards these in a time-bound manner.


To end the silent, painful, and enduring crisis for the workers, as well as the crisis for the economy, the government must urgently recognise the right to social security, embedded both in the Indian Constitution and international covenants.

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

Caste-wise split in MGNREGA wage payments


From UPSC perspective, the following things are important :

Prelims level : MGNREGA

Mains level : MGNREGA

The Centre has asked the States to split wage payments under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme into separate categories for Scheduled Castes, Scheduled Tribes and others from this financial year.

What is MGNREGA?

  • The MGNREGA stands for Mahatma Gandhi National Rural Employment Guarantee Act of 2005.
  • This is a labour law and social security measure that aims to guarantee the ‘Right to Work’.
  • The act was first proposed in 1991 by P.V. Narasimha Rao.

The objectives of the MGNREGA are:

  • To enhance the livelihood security of the rural poor by generating wage employment opportunities.
  • To create a rural asset base that would enhance productive ways of employment, augment and sustain a rural household income.

What is so unique about it?

  • MGNREGA is unique in not only ensuring at least 100 days of employment to the willing unskilled workers, but also in ensuring an enforceable commitment on the implementing machinery i.e., the State Governments, and providing a bargaining power to the labourers.
  • The failure of provision for employment within 15 days of the receipt of job application from a prospective household will result in the payment of unemployment allowance to the job seekers.
  • Any Indian citizen above the age of 18 years who resides in rural India can apply for the NREGA scheme. The applicant should have volunteered to do unskilled work.
  • Employment is to be provided within 5 km of an applicant’s residence, and minimum wages are to be paid.
  • Thus, employment under MGNREGA is a legal entitlement.

Answer this PYQ in the comment box:

Q.Among the following who are eligible to benefit from the “Mahatma Gandhi national rural employment guarantee act”?

(a) Adult members of only the scheduled caste and scheduled tribe households.

(b) Adult members of below poverty line (BPL) households.

(c) Adult members of households of all backward communities.

(d) Adult members of any household.

What is the move?

  • States were asked to verify if job cards for SC and ST beneficiaries were being properly allocated at the field level.
  • They were told they would be given fund allocations according to this criterion, indicating that labour budgets would also be segregated on a caste basis.
  • It was aimed at timely wage payments.

Reasons behind

  • There is some inbuilt positive discrimination in the scheme, reflected in the fact that more than 50% of workers are women and almost 40% are SC/ST.
  • However, it felt that the proposed reform would not help SC/ST workers, but would expose all workers to further uncertainties as the system struggles with changes.

Issues with the announcement

  • Workers’ advocates feared this move would cause unnecessary delays and complications in the payment system, and worried that it could lead to a reduction in scheme funding.
  • The rationale was very simple. It is not as if the payments made to SC and ST are not reported on the NREGA website, but overall, in terms of the budgetary outlay.
  • When people take an assessment merely on the Budget head under which the programme is budgeted, then they miss out on this intricate nuance.
  • So the Finance Ministry advised that both the Centre and States should make Budget provisions under SC and ST components as well.

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

World Employment and Social Outlook: Trends 2021


From UPSC perspective, the following things are important :

Prelims level : World Employment and Social Outlook: Trends 2021

Mains level : Unemployment since the pandemic

The report titled World Employment and Social Outlook was recently released by the International Labour Organization (ILO).

About the report

  • The report analyses the impact of the crisis on the labour market across the world.
  • It offers projections for recovery and gives details of the unequal impact of the crisis on different groups of workers and enterprises and calls for a broad-based human-centred recovery.

Findings of the report

  • There has been an unprecedented disruption to labour markets worldwide due to the COVID-19 pandemic, which has affected the lives of the younger generation and brought about disruption to their education.
  • Also made it more difficult for them to enter the labour market and hold on to their jobs.
  • The pandemic worsened long-standing inequalities with many women workers dropping out of the labour force.
  • For informal and low-skilled workers, working from home was not an option.
  • Many had to face huge health risks to keep their jobs, often with no access to social security benefits.

Major highlights of the report

  • Global unemployment is expected to be at 205 million in 2022, surpassing the 2019 level of 187 million.
  • The jobs shortfall induced by the novel coronavirus disease (COVID-19) pandemic was 75 million in 2021 and is expected to be 23 million in 2022.
  • An estimated additional 108 million workers and their family members now live in poverty.

The long road to recovery

  • The recovery would remain fragile in many countries due to the uneven rollout of vaccination campaigns and higher levels of public debt and deficits that would make it difficult to tackle the effects of the pandemic.
  • There is an urgent need to build back better — create productive employment opportunities and foster long-term labour market prospects for the most vulnerable.
  • There is a need to strengthen social protection schemes like the MGNREGS in India and make sure nobody is left behind.
  • This would require strong institutions and social dialogue and strong international cooperation to fight global disparities.

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

Issues in Social Security Code 2020


From UPSC perspective, the following things are important :

Prelims level : Provision in Social Security Code 2020

Mains level : Paper 2- Issues with the Social Security Code 2020

Provisions in Social Security Code 2020

  • India’s Parliament in September 2020 passed a Social Security Code (SS Code 2020).
  • The SS Code 2020 merges existing social security laws and attempts to include informal workers within the ambit of social security administration.
  • The SS Code 2020 amalgamates and rationalises the provisions of eight existing central labour laws.
  • Of these acts, employees provident fund, employees state insurance (ESI), maternity benefit, gratuity are entirely for organised sector workers. 
  • Employee threshold removed: For employees’ state insurance, the existing employee threshold has been withdrawn.
  • Now the central government can extend ESI benefits to any organisation irrespective of the number of workers employed.

Key benefits not available to informal workers in Social Security Code 2020

  • Maternity benefit: Under the SS Code, the provision of maternity benefit has not been made universal.
  • Maternity benefit is presently applicable for establishments employing 10 workers or more.
  • The definition of ‘Establishment’ in the proposed code did not include the unorganised sector.
  • Hence, women engaged in the unorganised sector would remain outside the purview of maternity benefit.
  • Employees Provident Fund: The SS Code maintains that the Employees’ Provident Fund Scheme will remain applicable, as before, to every establishment in which 20 or more employees are employed.
  • Thus, for informal sector workers, access to employees’ provident fund remains unfulfilled too in the new code.
  • Payment of gratuity: Gratuity shall be payable to eligible employees by every shop or establishment in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months.
  • But although payment of gratuity was expanded in the new Code, it still remains inaccessible for a vast majority of informal workers.

Challenges faced by informal workers in availing social security

  • Registration barrier: To avail social security, an informal worker must register herself on the specified online portal to be developed by the central government.
  • Absence of definition: The absence of definite and unambiguous provisions in the present code would further complicate achievement of universal registration.
  • Lack of awareness: Experience shows that there is an awful lack of awareness among informal workers regarding social security schemes.
  • Lack of digital literacy: Online registration places a further challenge as most informal workers lack digital literacy and connectivity.
  • Lack of documents: Informal workers also find it difficult to furnish all documentary papers required as part of the registration process.
  • Furnishing proof of livelihood and income details in the absence of tangible employer-employee relations is very difficult.
  • Such requirements deter informal workers from completing the registration and they continue to remain outside the social security ambit.

Way forward

The provision of social security could be used to formalise the workforce to a certain extent. Employers could have been made to own up to the responsibility of providing social security to their workers.

1) Inter-State cooperation

  • As unorganised workers are spread across the length and breadth of India, inter-State arrangement and cooperation becomes imperative.
  • The central government should conceptualise a basic structure, which if successful, should be adopted by States after necessary customisation.

2) Universal coverage

  • The unorganised workforce is all encompassing, minus the minuscule regular workers of organised sectors.
  • This identity should be primal and all unorganised workers should have basic social security coverage, irrespective of labour market classifications.
  • The code fails to undertake such inclusion in a meaningful way.


The Social Security Code fails to provide adequate protection to informal workers, who constitute 91% of the workforce. The pandemic and misery brought by it on these informal workers highligths the need for universal social security.

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

Why has Indian manufacturing been losing jobs since 2016?


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Unemployment issues in India

The State of Working India (SWI) 2021 has documented the impact of one year of Covid-19 in India, on jobs, incomes, inequality, and poverty.

Highlights of the SWI 2021

  • The SWI 2021 showed that the pandemic had forced people out of their formal jobs into casual work, and led to a severe decline in incomes.
  • There is a sudden increase in poverty over the past year.
  • Maharashtra, Kerala, Tamil Nadu, Uttar Pradesh, and Delhi, contributed disproportionately to job losses.
  • Unsurprisingly, these are also the states that suffered the maximum Covid caseload.

Labour Participation Rate (LPR) is the ratio of the labour force to the population greater than 15 years of age. It is defined as the section of working population in the age group of 16-64 in the economy currently employed or seeking employment.

Worsened with COVID

  • It pointed to an ailment of the Indian economy that has not only been a longstanding one but also one that has gotten worse over the past few years even without the help of Covid.
  • Agriculture, mines, manufacturing, real estate and construction, financial services, non-financial services, and public administrative services sectors account for 99% of total employment in India.
  • The number of people employed in the manufacturing sector of the economy has come down from 51 million to 27 million — that is, almost halving in the space of just four years!
  • For instance, the number of people employed in agriculture is going up.
  • Equally disheartening is that employment in non-financial services (such as providing education and entertainment industry etc.) has fallen sharply.

Why are these trends worrisome?

  • It is important to understand that traditionally Indian policymakers have been of the view that the manufacturing sector is our best hope to soak up the surplus-labour otherwise employed in agriculture.
  • Manufacturing is well suited because it can make use of the millions of poorly educated Indian youth, unlike the services sector, which often requires better education and skill levels.
  • For the longest time, India has struggled to get its manufacturing industries to create a growing bank of jobs.
  • But, and this is what the CMIE data shows, what is happening in the past 4-5 years is that far from soaking up excess labour from other sectors of the economy, manufacturing is actually letting go of workers.

Return to Agriculture

  • India has seen a hike in the number of people “employed” in agriculture over the past year.
  • This is nothing but disguised unemployment.
  • Essentially, labourers and workers are returning to their rural homes in the absence of jobs either in manufacturing or services.

Why is Indian manufacturing failing to create jobs?

  • On the face of it, every past government has come out with a policy to boost manufacturing jobs. But still, the situation is getting worse.
  • There are different ways to look at this question.
  1. One is to look at why manufacturing has struggled to create as many jobs in the past
  2. The second is to look at the specific reasons why manufacturing has been bleeding jobs, instead of creating them, since 2016-17.

Let’s tackle the historical question first.

  • If one looks at any of the sectors in the economy — agriculture, industry, services — starting a manufacturing unit requires the highest amount of fixed investment upfront (relative to the output that may be generated later).
  • In other words, it is a big commitment on the part of an entrepreneur to put up a huge amount of money without necessarily knowing how it will all pan out.
  • What has traditionally made this truly risky is the highly extractive nature of governments.
  • In simpler terms, far too often governments have been corrupt, with officials and politicians extracting bribes.

Less focus on manufacturing goods

  • As regards the demand for manufacturing goods, experts point out that Indians have always consumed relatively less of manufacturing goods and relatively more of food and services.

There are two possible reasons for this.

  1. One, most Indians are quite poor and hence most of the income is spent on food.
  2. Two, repairs and maintenance are a very high part of our consumption choice.
  • In other words, when Indians buy a manufactured product — say a refrigerator — they tend to use it for much longer than in developed countries.

Core of the problem

  • The trouble lies with policymakers repeatedly neglecting the labour-intensive industries.
  • Since the second five year plan, the P C Mahalanobis strategy was to gain self-reliance by investing in capital intensive industries so that India does not have to import machines etc. from other countries.
  • The hope was that the demand from Indian consumers will make the domestic industry viable.
  • But Indian domestic demand was quite anaemic due to poverty levels.

Other policy lacunas

  • As against the capital intensive industries, which were involved in making heavy machines, the labour-intensive ones (such as leather, handicrafts, textiles etc.) were reserved for the small-scale industry framework.
  • But while the labour-intensive manufacturing firms could not match the capital-intensive firms in terms of GDP value or growth of output, they did have a distinct advantage of creating more jobs.
  • But, by treating them as small-scale industries, policies held back their growth.
  • Moreover, India did not push for integrating its labour-intensive manufacturing in the global supply chains by aggressively following exports.
  • Instead, the idea was to substitute imports in the name of self-reliance.

What has happened since 2016-17?

  • Things have become worse over the past five odd years despite the Indian government unveiling its ambitious Make in India (MII) initiative and the latest Production-Linked Incentive (PLI) scheme.
  • For one India is repeating the same mistakes with MII and PLI schemes.
  • They are again aimed more at capital intensive manufacturing, not labour intensive ones.
  • Moreover, India is reverting to the protectionist approach, aimed at self-reliance, yet again in recent years.
  • Further, much like in the past, this time, too, the domestic demand is weak for aggressively boosting labour-intensive industries aimed at capturing the export markets.


  • The growing rift in the fortunes of informal and formal manufacturing could be the reason why India is seeing such a massive decline in manufacturing jobs.
  • The government has tried its level best to push for greater formalization but it has often been accused of not understanding the nature and functioning of India’s informal economy.

Way forward

  • For the same level of employment, formality is good.
  • But if there is a trade-off between formality and employment generation, choosing formality may not be so beneficial. And this trade-off appears to be quite sharp in India.
  • Indian manufacturing is still at best hope for creating new jobs and soaking up excess unskilled labour through better infrastructure and easier regulatory support — to create millions of new jobs.

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

Section 142 of the Social Security Code – 2020 Notified


From UPSC perspective, the following things are important :

Prelims level : Section 142

Mains level : Paper 2- Section 142 of social security code

Aadhaar mandatory

  • The Union government has made Aadhaar mandatory for availing social security benefits, and for registration on a national informal workers’ database being developed for migrants.
  • The labour ministry has notified section 142 of the social security code.
  • It allows authorities to collect Aadhaar details for the database of beneficiaries under various social security schemes.
  • The move will be applicable to both formal and informal workers and may also help in curbing duplication of data by keeping imposters at bay, authorities said.
  • However, people who don’t have Aadhaar will not be denied of benefits, the ministry claims.

National informal workers’ database

  •  National database for unorganized workers is at an advanced stage of development by National Informatics Centre.
  • The portal is aimed at collection of data for unorganized workers, including migrant workers for the purpose of giving benefits of the various schemes of the government.
  • An inter-state migrant worker can register himself on the portal on the basis of submission of Aadhaar alone.



  • The Code on Social Security, 2020 is a code to amend and consolidate the laws relating to social security with the goal to extend social security to all employees and workers either in the organised or unorganised or any other sectors.
  • The Social Security Code, 2020 brings unorganised sector, gig workers and platform workers under the ambit of social security schemes, including life insurance and disability insurance, health and maternity benefits, provident fund and skill upgradation, etc. The act amalgamates 9 central labour enactments relating to social security.
  • To access complete Act, you can click on the link given below:

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

India’s migrant workers need better policies


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- Policy for migrant labourers and related issues

The article analyses the draft policy document for migrant labourers prepared by the NITI Aayog.

Draft policy by NITI Aayog

  • The Niti Aayog, on the request of the Ministry of Labour and Employment, has prepared an umbrella policy document for migrant labourers, including informal sector workers.
  • The draft policy makes significant strides in providing a perspective on recognising the magnitude and role of migrant workers, their problems and vulnerabilities, and the role and responsibilities of various stakeholders in addressing these.
  •  It states that a sound policy must be viewed from a “human rights, property rights, economic, social development, and foreign policy lens”.
  • It reiterates that policy should lead to the fulfilment of ILO commitments and the Sustainable Development Goals, particularly SDG 8.8 on the protection of labour rights and providing a safe and secure working environment for all workers, particularly migrants.

Portability of social protection to address vulnerabilities

  • The policy describes many sources of vulnerabilities of migrant labourers, ranging from their invisibility and political and social exclusion to informal work arrangements, exploitation and denial of labour rights, lack of collective voice, exclusion from social protection arrangements, formal skills, health, education, and housing.
  • Following from this, it identifies portability of social protection, voting rights, right to the city (the collective ownership and participation of citizens in cities they have helped build) and health, education and housing facilities as key issues to be dealt with.
  • It also reflects on the need for pro-poor development and provision of livelihoods in the source areas.

Governance structure

  • The draft policy proposes a governance structure with the Ministry of Labour as the nodal ministry and a dedicated unit under it which will act as a focal point for inter-ministerial and Centre-state coordination.
  • It also proposes mechanisms for coordinating the effort on inter-state migration, especially on principal migration corridors.
  • The policy document creates a framework under which migrant workers and their families can access entitlements and possibly work in a safer and better environment.

Issues need to be addressed

1) Failure to address cause of migration of labour

  • The National Commission for Rural Labour argued way back in 1991 that unequal development was the main cause of labour migration.
  • In the last three decades, disparities in development and inequalities have grown ceaselessly, calling for deep correctives.
  • Without such correction, migration and the adverse inclusion of migrants in labour markets is bound to grow unchecked.
  • The report falls short of acknowledging this.

2) Exclusion of migrants urban local governments

  • While the report correctly pinpoints the exclusion of migrants by urban local governments in the provision of basic entitlements, it fails to acknowledge the root cause of the lopsided urban development strategy.
  • The urban strategy has catered to national and global capital and the urban middle classes, marginalising the poor, particularly the migrants.

3) Denial of social security

  • The report also makes a false dichotomy between approaches which rely on cash transfers and special dispensations and a second approach which enhances the agency and capability of migrants and removes constraints on these.
  • The denial of the first approach has led the report to brush aside the migrants’ and informal workers’ right to social security.
  • Social security is acknowledged as a universal human right in international covenants to which India is a signatory and is given due place in the Constitution.
  • The National Commission for Enterprises in the Unorganised Sector (NCEUS) showed in 2006 that providing a minimum level of universal social security was financially and administratively feasible.
  • The Commission also recommended a universal registration system and issuance of smart social security cards, but its recommendations have unfortunately remained a dead letter.

4) Approach towards labour rights and labour policy

  • By putting grievance and legal redressal above regulation and enforcement on which it remains silent, the report puts the cart before the horse.
  • Surprisingly, the report does not take stock of the new labour codes, mentioning only the defunct laws that were subsumed by them.
  • The Codes accentuate the very problems — informality, precarity, the role of contractors and the lack of organisation — which the report itself describes.
  • The Codes, in promoting ease of business, have tilted the balance firmly in favour of capital.


In essence, the draft policy framework identifies the problems but fails to address the policy distortions which lie at their root. Hopefully, however, the draft will be opened up for further discussions and feedback to enrich and complete what is already a significant beginning.

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

NITI Aayog’s Draft National Policy on Migrant Workers


From UPSC perspective, the following things are important :

Prelims level : Migration pattern in India

Mains level : Welfare of the migrant workers

Spurred by the exodus of 10 million migrants from big cities during the Covid-19 lockdown, the NITI Aayog has prepared a draft national migrant labour policy.

Highlights of the Policy

  • The draft describes two approaches to policy design:
  1. To focus on cash transfers, special quotas, and reservations
  2. To enhance the agency and capability of the community and thereby remove aspects that come in the way of an individual’s own natural ability to thrive

A rights-based approach

  • The policy rejects a handout approach, opting instead for a rights-based framework.
  • It seeks to remove restrictions on the true agency and potential of the migrant workers.
  • The goal a/c to the document should not be to provide temporary or permanent economic or social aids”, which is “a rather limited approach”.
  • Migration, the draft says, should be acknowledged as an integral part of the development and government policies should not hinder but…seek to facilitate internal migration.

Issues with existing law

  • The 2017 report argued that specific protection legislation for migrant workers was unnecessary.
  • Migrant workers aren’t yet integrated with all workers as part of an overarching framework that covers regular and contractual work.
  • The report discussed the limitations of The Inter-State Migrant Workers Act, 1979, which was designed to protect labourers from exploitation by contractors by safeguarding their right to non-discriminatory wages.
  • It mentions that the Ministry of Labour and Employment should amend the 1979 Act for “effective utilization to protect migrants”.

Restructuring the institutions

The NITI draft lays down institutional mechanisms to coordinate between Ministries, states, and local departments to implement programmes for migrants.

  • Nodal agency: It identifies the Ministry of Labour and Employment as the nodal Ministry for implementation of policies, and asks it to create a special unit to help to converge the activities of other Ministries.
  • Resources centre: This unit would manage migration resource centres in high migration zones, a national labour Helpline, links of worker households to government schemes, and inter-state migration management bodies.
  • Migration corridors: On the inter-state migration management bodies, it says that labour departments of source and destination states along major migration corridors, should work together through the migrant worker cells.
  • Labour officers from source states can be deputed to destinations – e.g., Bihar’s experiment to have a joint labour commissioner at Bihar Bhavan in New Delhi.
  • Role for Panchayats: Alongside the long-term goal, policies should promote the role of panchayats to aid migrant workers and integrate urban and rural policies to improve the conditions of migration.
  • Migration management: Panchayats should maintain a database of migrant workers, issue identity cards and passbooks, and provide “migration management and governance” through training, placement, and social-security benefit assurance, the draft says.

Ways to stem migration

  • Even as it underlines the key role of migration in development, the draft recommends steps to stem migration.
  • The draft asks source states to raise minimum wages to bring a major shift in the local livelihood of tribal that may result in stemming migration to some extent.
  • The absence of community building organisations (CBO) and administrative staff in the source states have hindered access to development programmes, pushing tribals towards migration, the draft says.
  • The “long term plan” for CBOs and panchayats should be to “alleviate distress migration policy initiatives” by aiming “for a more pro-poor development strategy in the sending areas.

The importance of data

  • The draft calls for a central database to help employers “fill the gap between demand and supply” and ensures “maximum benefit of social welfare schemes”.
  • It asks the Ministries and the Census office to be consistent with the definitions of migrants and subpopulations, capture seasonal and circular migrants, and incorporate migrant-specific variables in existing surveys.
  • Both documents see limited merit in Census data that comes only once a decade.
  • It asked the National Sample Survey Office to include questions related to migration in the periodic labour force survey and to carry out a separate survey on migration.

Preventing exploitation

  • The policy draft describes a lack of administrative capacity to handle issues of exploitation.
  • State labour departments have little engagement with migration issues, and are in “halting human trafficking mode”, the draft says.
  • The local administration, given the usual constraints of manpower, is not in a position to monitor.
  • This has become the breeding ground for middlemen to thrive on the situation and entrap migrants which leads to potential exploitation and trafficking.

Specific recommendations

  • The draft asks the various ministries to use Tribal Affairs migration data to help create migration resource centres in high migration zones.
  • It asks the Ministry of Skill Development and Entrepreneurship to focus on skill-building at these centres.
  • The Ministry of Education should take measures under the Right to Education Act to mainstream migrant children’s education, to map migrant children, and to provide local-language teachers in migrant destinations.
  • The Ministry of Housing and Urban Affairs should address issues of night shelters, short-stay homes, and seasonal accommodation for migrants in cities.
  • The National Legal Services Authority (NALSA) and Ministry of Labour should set up grievance handling cells and fast track legal responses for trafficking, minimum wage violations, and workplace abuses etc.

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.

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

India’s internal migration


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Migration trends in India

This newscard presents data on India’s internal migration considering the mass exodus which was visible during the lockdowns.

The displacement of people during the imposition of lockdown has been described as the second-largest since the Partition of the country.


Also read:

[Burning Issue] Migrant workers amid COVID-19 outbreak

India’s internal migration

(1) Number of migrants

  • As of 2020, India has an estimated 600 million migrants. Roughly half of India is living in a place where it wasn’t born.
  • It would be roughly double the size of the fourth-largest nation on the planet — the United States.

(2) Nature of migration

  • The bulk of the internal migration in India is within one district itself. An estimated 400 million Indians “migrate” within the district they live in.
  • The next 140 million migrate from one district to another but within the same state.
  • And only about 60 million — that is, just 10% of all internal migrants — move from one state to another.

(3) Type of Migration

  • There are other misconceptions as well. Typically, it is thought that most migration happens when people from rural areas move to urban areas.
  • That is incorrect. The most dominant form of migration is from rural to rural areas.
  • Only about 20% of the total migration (600 million) is from rural to urban areas.
  • In fact, 20% of the total migration is from one urban area to another urban area.
  • As such, urban migration (rural to urban as well as urban to urban) accounts for 40% of the total migration.

(4) Comparison with other countries

  • India’s proportion of internal migrants (as a percentage of the overall population) is much lower than some of the comparable countries such as Russia, China, South Africa and Brazil.
  • All have much higher urbanisation ratios, which is a proxy for migration level.
  • In other words, as India adopts a strategy of rapid urbanisation, levels of internal migration will increase further.

Impact of COVID

The reality of a migrant worker’s existence is much more complicated than those sharply defined numbers.

Not all migrants were equally affected

  • The worst-hit were a class of migrants that felt under the group “vulnerable circular migrants”.
  • These are people who are “vulnerable” because of their weak position in the job market and “circular” migrants because even though they work in urban settings, they continue to have a foothold in the rural areas.
  • Such migrants work in construction sites or small factories or as rickshaw pullers in the city but when such employment avenues dwindle, they go back to their rural setting.
  • In other words, they are part of the informal economy outside agriculture.

“Data insufficient”

  • The truth is that even now all the estimates mentioned above are individual estimates.
  • The official data — be it the Census or the National Sample Survey — is more than a decade old.
  • In fact, Census 2011 migration data was made publicly available only in 2019.

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

[pib] SAKSHAM Portal


From UPSC perspective, the following things are important :

Prelims level : SAKSHAM portal

Mains level : MSMS sector and its job potential

The Technology Information, Forecasting and Assessment Council (TIFAC) has launched SAKSHAM, a dynamic job portal for mapping the skills of Shramiks.

The name SAKSHAM closely leans towards HRD, Employment and Entrepreneurship developments.  Make a note of it. It can create confusion while revision.


  • SAKSHAM is an acronym for Shramik Shakti Manch.
  • The portal with the demand and supply data uses an algorithm and AI tools, for geospatial information on demand and availability of Shramiks, and also provides analysis on skill training programmes of Shramiks.
  • It would directly connect Shramiks with MSMEs and facilitate placement of blue-collar jobs.
  • The pilot portal originally initiated with two districts is now being launched as an all India portal.

Key features

  • A dynamic job portal – an opportunity for Shramiks and MSMEs
  • Facilitate the creation of 10 lakh blue-collar jobs
  • Direct connect between Shramiks and MSMEs, no middleman in between
  • Minimise migration of Shramiks – job opportunity in proximate MSMEs

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

Centre’s new labour codes to allow 4-day work per week


From UPSC perspective, the following things are important :

Prelims level : Various labour laws

Mains level : 4-day work and its benefits

The Centre under its new labour codes would soon provide an option for organisations to allow their employees to work for four days in a week.

What is the news?

  • The proposed new labour codes could provide companies with the flexibility of four working days in a week.

What does this mean?

  • The working hour’s limit of 48 hours for a week will remain unchanged.
  • This implies that there will be long working hours if the working days are reduced.
  • Having a reduced number of working days does not mean a cut in paid holidays.
  • Therefore, when the new rules will provide the flexibility of four working days, it would imply three paid holidays.

Roll out of the proposal

  • The Ministry of Labour and Employment is likely to complete the process to finalise the rules for four labour codes soon.
  • The provision of flexibility to have reduced working days of four days in the labour code rules will mean that companies will not require prior government nod to enact it.

Why such a move?

  • The well-being of employees improves with less workload. Working parents can spare more time for the childcare.
  • It helps the economy and the environment since power and fuel consumption is reduced.

Ahead of Labour reforms

  • The ministry is in the final phase of amalgamating 44 central labour laws into four broad codes.
  • The four Codes include- Code on Wages, Industrial Relations, Occupational Safety, Health and Working Conditions (OSH) and Social Security Codes.


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

Quality gigs, a solution to urban unemployment


From UPSC perspective, the following things are important :

Prelims level : Unemployment

Mains level : Paper 3- Support to gig workers

With the lack of NREGA equivalent in the urban area government has to find ways to provide income support and employment. The article suggests ways to do the same.

Slowdown in employment recovery

  • The Indian economy has been gradually recovering from historic contraction of negative 23.9%.
  • This recovery has shifted focus away from the employment question, considered resolved after a sharp rally following the collapse in employment numbers in April.
  • More recent data from the Centre for Monitoring Indian Economy, however, point to a gradual slowdown in employment recovery.

NREGA: employment support in rural area

  • For labour coming back to rural India, employment support came in the form of the National Rural Employment Guarantee Scheme (NREGA), which witnessed a 243% increase in person workdays.
  • This increased dependency on NREGA, has seen the Rural Development Ministry spend nearly 90% of its increased ₹86,4000 crore allocation by the month of November.
  • In several Indian cities, however, closed businesses have meant that millions of workers have either had to leave or have had to take up new forms of work.

Supporting gig workers

With no urban equivalent to the NREGA on the horizon, there must be an increased impetus on evaluating, regulating and supporting new forms of employment.

1) Evaluation

  •  Our current understanding of gig work is based on the limited disclosures made by the platforms themselves.
  • Furthermore, most regulators continue to remain in the dark on basic questions surrounding platform labour.
  • As of now, there exists no authoritative estimate on the total number of gig workers in India.
  • The centralised nature of the platforms and the larger platform labour market should make the collating of this data relatively straightforward for the Labour Ministry.

2) Regulation

  • The next step is significantly more sensitive and involves regulation.
  • The reason for the sensitivity primarily revolves around the varied nature of gig work.
  • While some workers use these platforms as a “side hustle”, for others it continues to serve as a primary source of employment.
  • This dynamic is further complicated by the risk of a one-size-fits-all regulatory strategy.
  • Such regulatory strategies are unintentionally hurting the similar, yet distinct, market for highly skilled (and highly paid) freelancers.

Way forward

  • A more viable strategy then would involve conditional government partnerships with platforms under some of its flagship schemes.
  • The successful pilot of Swiggy’s Street Food Vendors programme under the PM SVANidhi, or PM Street Vendor’s Atma Nirbhar Nidhi scheme, may prove to be an illustrative example.
  •  Creation of jobs, alongside the voluntary adoption of quality standards, is an example of a mutually beneficial partnership between the state and platforms.
  • Similar collaborations on urban employment, that require labour platforms to comply with disclosure norms and worker compensation standards to access government support, could create jobs while ensuring compliance.
  • Collaborating with platforms to employ workers, would bring down costs significantly (for both the state and their partners)  it would also create an environment where firms would be more likely to cooperate with the state.


Limited fiscal space and a growing need to fuel the country’s consumption base, must push the government to build symbiotic relationships with new partners.

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

Fixed-term employees


From UPSC perspective, the following things are important :

Prelims level : Labour codes

Mains level : Paper 2- Challenges of contractual labour despite the provision of fixed-term employment

The recent incident of violence at the iPhone manufacturing factory brought into focus the issue of contract labour. The article explains the reasons for its persistence despite the provision of fixed-term employment.

Difference between a contract worker and fixed-term worker

  • Contract workers, who are hired via an intermediary (contractor) and are not on the payrolls of the company on whose shop floors they work.
  • Fixed-term employees can be directly hired by employers without mediation by a middleman.
  • They are ensured of the same work hours, wages, allowances, and statutory benefits that permanent workers in the establishment are entitled to.
  • Employers are not required to provide retrenchment benefits to fixed-term employees.
  • With an aim to discourage the use of contract workers the government introduced the option of fixed-term employment in the Code on Industrial Relations (2020).

Issues with the provision of fixed-term employment

  • Fixed-term employment in India is indeed quite open-ended.
  • The Code does not specify a minimum or maximum tenure for hiring fixed-term employees.
  • Nor does it specify the number of times the contract can be renewed.
  • The absence of such safeguards can lead to an erosion of permanent jobs.
  • Workers may find themselves moving from one fixed-term contract to another, without any assurance of being absorbed as permanent workers by their employer.

So, why firms still hire contract workers?

  • The cost of hiring contract workers continues to remain lower than the cost of hiring fixed-term employees. who are required to be paid pro-rata wages and social security including gratuity.
  • In addition, the monitoring, legal compliance, and litigation costs are shifted onto the contractor in case of contract workers, thereby reducing the transaction costs of recruitment to firms.
  • To encourage a shift away from contract workers to fixed-term employees, the government should have completely prohibited the use of contract labor in core activities
  • Instead of completely prohibiting contract workers in core activities the Labour Code on Occupational Safety and Health has allowed it under certain conditions.
  • Such a provision encourages the use of contract workers, undermining the initiative of introducing fixed-term employment.

Using PLI and Atmanirbhar Bharat to boost formal job creation

  • The production linked incentive scheme (PLI) offers government subsidies for a limited period which is five years for mobile handsets.
  • The objective of the PLI scheme is to create “good jobs”.
  • It may have been more useful to link these incentives for which a financial outlay of Rs 1.45 lakh crore has been approved over five years for 10 sectors explicitly to job creation.
  • Significantly, under the Atmanirbhar Bharat Rozgar Yojana, the government is offering provident fund subsidies to employers for hiring new formal workers.
  • Both these programs could jointly be leveraged to give a big boost to formal job creation in the manufacturing sector.

Consider the question “Examine the reasons for the persistence of contractual labour despite the option of fixed-term employment. Also suggest the ways to increase the employment opportunities that are secure.” 


The government should focus on the creation of employment opportunities that are secure through policies and laws.

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

Provisions for platform workers in the labour code and issues with them


From UPSC perspective, the following things are important :

Prelims level : Provision in labour codes

Mains level : Paper 2- Provisions for gig workers and platform workers in the labour codes

The article examines the provision made for the platform workers and the gig workers in the labour codes passed by the Parliament recently and explains the issues with it.


  • The three new labour codes passed by Parliament recently acknowledge platform and gig workers as new occupational categories in the making.

Definition issue

  • The specific issues of working in factories, the duration of time needed on a factory floor, and associated issues are recognised as the parameters for defining an ideal worker.
  • The Code on Wages, 2019, tries to expand this idea by using ‘wages’ as the primary definition of who an ‘employee’ is.
  • Yet, the terms ‘gig worker’, ‘platform worker’ and ‘gig economy’ not defined with in connection with their wages.
  • The new Code on Social Security allows a platform worker to be defined by their vulnerability — not their labour, nor the vulnerabilities of platform work.

Issues with the code

  • Since the laws are prescriptive, what is written within them creates the limits to what rights can be demanded, and how these rights can be demanded.
  • Platform delivery people can claim benefits, but not labour rights.
  • This distinction makes them beneficiaries of State programmes.
  • This does not allow them to go to court to demand better and stable pay, or regulate the algorithms that assign the tasks.
  • This also means that the government or courts cannot pull up platform companies for lapses[ ex. choice of pay, work hours etc].

Benefits with no guarantee

  • In the Code on Social Security, 2020, platform workers are now eligible for benefits like maternity benefits, life and disability cover, old age protection, provident fund, employment injury benefits, and so on.
  • None of these are secure benefits.
  • This means that from time to time, the Central government can formulate welfare schemes that cover these aspects of personal and work security, but they are not guaranteed.
  • Actualising these benefits will depend on the political will at the Central and State government-levels and how unions elicit political support.
  • The language in the Code is open enough to imply that platform companies can be called upon to contribute either solely or with the government.

Consider the question “What are the provisions for gig workers and platform workers in the new labour code? What are the issues with the provision?”


The ‘platform worker’ identity has the potential to grow in power and scope, but it will be mediated by politicians, election years, rates of under-employment, and large, investment- heavy technology companies that are notorious for not complying with local laws.

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

Labour code reforms address basic needs


From UPSC perspective, the following things are important :

Prelims level : Various provisions of labour code

Mains level : Paper 2- Labour code reforms

The article highlights the key provision of the labour code and how it will help in removing the various hurdles faced by the key stakeholders.

Increase in the threshold for closure/lay-off and its impact

  • The Industrial Relations Code 2020 increased the threshold for retrenchment/closure or lay-off without requiring government approval, from 100 to 300 workers.
  • This will help in addressing the matter of expansion of the firms.
  • In 2014, Rajasthan had increased the threshold of taking prior permission of the government before retrenchment.
  • The reform has helped firms to set up larger operations in Rajasthan, and the same amendment was followed by 15 states.

Fixed Term Employment(FTE): Ensuring flexibility and tackling exploitation

  • In many jobs employees are required for a few months such as infrastructure projects, textiles and garments, food and agro-processing, etc.
  • However, the contractual employment workforce is quite often exploited with respect to wages, social security, and working conditions as well as welfare facilities.
  • Fixed Term Employment is an intervention to enable the hiring of employees directly instead of hiring through contractors, which will ensure flexibility.
  • For employees, all statutory entitlements and service conditions equivalent to those of a regular employee have now been made applicable.
  • The Code on Industrial Relations also extends the benefit of gratuity even for an FTE contract of one year, which is five years in the case of regular employees.

Strengthening the formal economy

  • The inclusion of the gig and platform workers in the Social Security Code 2020 is a step towards strengthening the formal economy.
  • The provision for insurance coverage has been extended to plantation workers, and free annual health check-ups and a bipartite safety committee has been introduced for establishments such as factories, mines and plantation sectors in place of hazardous factories.
  • The ESIC and EPFO requirements will now apply to establishments employing less than 10 and 20 workers respectively on a volunteer basis.

Ensuring female labour force participation

  • Falling women’s workforce participation in India has been a matter of concern for a long time.
  • Female labour force participation is a driver of growth and, therefore, participation rates indicate the potential for a country to grow more rapidly.
  • The new Code ensures the employment of women in night shifts for all types of work.

Expansions of the provisions for migrant workers

  • The Occupational Health, Safety & Working Conditions Code expands the definition of a migrant worker.
  • The expanded definition includes workers who would be directly employed by the employer besides those employed through a contractor.
  • Also a migrant, who comes on his own to the destination state, can declare himself a migrant worker by registering on an electronic portal.
  • Registration on the portal has been simplified and there is no requirement of any other document except Aadhaar.
  • For de-licencing/de-registration, it is mandated to notify registering officers about the closure of their establishment and certify payment of dues to all employed workers.
  • This will ensure that workers will not be exploited even during the closure of the concerned establishment.

Other provisions

  • The introduction of a concept of conducting web-based inspections can be seen as an attempt of matching corporate needs in the digital world.
  • The provision for a 14-day notice period before strikes and lockdowns would allow both workers and employers to attempt resolving the issues.
  •  The codes also promote lifelong learning mechanism to match the evolving skill sets required for technology and process changes through the introduction of a reskilling fund.

Consider the question “What are the various provision added in the three labour code and how it will help revive the economy and tackle barriers in the expansion of firms?”


The reform measures address basic needs — to revive the economy and tackle barriers in the expansion of firms. Moreover, they promote the employment of women as well as reskilling of the workforce for the deployment of migrants.

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

Changes in the labour laws needs to discussed and debated


From UPSC perspective, the following things are important :

Prelims level : Labour Code Bills

Mains level : Paper 2- Issues with the labour laws

Increase in the jobs without employment security

  • Between 2004-05 and 2017-18, the share of salaried workers outside agriculture without any written contract increased from 60 per cent to 71 per cent.
  • Even in private and public limited companies, this share increased from 59 per cent to 71 per cent.
  • In the government and the public sector the share of such workers increasing from 27 per cent to 45 per cent over the period.
  • Many of the wage jobs in the organised sector came through contractors.
  • In organised manufacturing, the reported share of contract labour increased from 13 per cent in 1995-06 to 36 per cent in 2017-18.

Policy response

  • A policy to deal with the problem of employment security was much needed.
  • The response came in the form the three revised labour Code Bills — on Industrial Relations, Occupational Safety, Health and Working Conditions, and Social Security.
  • These were introduced in Parliament in the Monsoon Session, and approved on September 23.
  • These three labour codes, along with the Code on Wages approved earlier, touch the lives of every Indian worker.

 “Fixed term” worker

  • In 2018, the government amended the Standing Orders on Employment Act and introduced the category of “fixed term” worker.
  • That category creates a permanent cadre of temporary workers, with no prospects of career growth and job security.

Changes and issues with the Bills

  • 1) Government had rationalised fixed-term employment by arguing that industries had resorted to the third-party engagement of contract labour to get around the rigidities in firing workers.
  • But that has not stopped the Codes from further liberalising the provisions relating to employment of contract labour and making their regulation applicable only in establishments employing 50 or more workers, instead of 20 or more.
  • 2) The key provisions which regulate the employment of inter-state migrant workers have been further diluted and made applicable only to establishments employing 10 or more such workers, compared to five earlier.
  • 3) Along with the provisions of retrenchment, the applicability of the Standing Orders, which regulate the categorisation as well as the terms of employment of workers in establishments, has also been raised from 100 to 300 workers.
  • 4) The threshold for factories has now been doubled — from 10 to 20 workers with power — thereby eliminating a large number of important regulatory provisions for the smaller factories.
  • 5) Relevant governments have been given much more leeway in exempting establishments from the applicability of a whole range of provisions in the Code.
  • 6) Inspection provisions have been diluted in all the Codes and will no longer even be complaints based.
  • 7)  The changes have also made legal industrial action a virtual impossibility, and the presence of unions less possible.


Informality contributes to inequality and to conditions which make sustainable growth impossible, and economic recovery more difficult. It also creates conditions in which employers under-invest in workers’ capacities and workers are not invested in a company’s future — leading to low productivity and lack of competitiveness.

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

Code on Wages 2019


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2-Issues with the Code on the Wages

The article discusses the issues in the Code on Wages (yet to be notified) 2019 and how it fails to achieve what it seeks to achieve.

Code on Wages 2019

  • The Code on Wages, 2019 seeks to consolidate and simplify four pieces of legislation into a single code. These 4 legislations are-
  • 1) Payment of Wages Act, 1936.
  • 2) Minimum Wages Act, 1948.
  • 3) Payment of Bonus Act, 1965.
  • 4) Equal Remuneration Act, 1976.
  • Its object and reasons stated that even the Second National Commission on Labour- 2002 suggested consolidating all labour laws into four codes.

Issues with the consolidation

  • While the previous four pieces of legislation had a total of 119 sections, the new Code has 69 sections.
  • Any consolidation will impact the length of the sections.
  • Further, all requirements for enforcing the Act, have been relegated to the Rules.
  • As a result, the delegated pieces of legislation (Rules) will be bigger than the Code; this is no way to condense prior pieces of legislation.
  • All the four repealed pieces of legislation were enacted historically at different points in time and to deal with different situations.
  • The combining of asymmetrical laws into a single code is not an easy task and will only create its own set of new problems.
  • The central government will have the power to fix a “floor wage”.
  • Once it is fixed, State governments cannot fix any minimum wage less than the “floor wage”.
  •  The concept should be for a binding minimum wage and not have dual wage rates — a binding floor wage and a non-binding minimum wage.
  • Neither the Code nor the Rules (presently, draft Rules) prescribe the qualifications and experience required for appointment of competent authority.
  • Anew provision (Section 52) has been introduced where an officer will be notified with power to impose a penalty in the place of a judicial magistrate.
  • An essential judicial function is now sought to be vested with the executive in contravention of Article 50 of the Constitution.

Issue of MGNREGA wages

  • There were cases as to whether the Minimum Wages Act would have an over-riding effect over the provisions of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005.
  • Several High Courts have placed the Minimum Wages Act to override MGNREGA.
  • That has been set to rest by excluding MGNREGA from the purview of the Code on Wages.
  • That has been set to rest by excluding MGNREGA from the purview of the Code on Wages.


The Code on Wages (yet to be notified) has neither succeeded in consolidation of laws nor will it achieve the expansion of the coverage of workers in all industries in the unorganised sector.

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

New versions of labour codes – key proposals and concerns


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Labour reforms

The government has introduced new versions of three labour codes – Industrial Relations Code Bill, 2020, Code on Social Security Bill, 2020 and Occupational Safety, Health and Working Conditions Code Bill, 2020.

Try this PYQ:

Q.Disguised unemployment generally means:

(a) A large number of people remain unemployed

(b) Alternative employment is not available

(c) Marginal productivity of labour is zero

(d) Productivity of workers is low

What are the key proposals?

(1) Industrial Relations Code Bill, 2020

  • In this, the government has proposed to introduce more conditions restricting the rights of workers to strike, alongside an increase in the threshold relating to layoffs and retrenchment.
  • The Code has raised the threshold for the requirement of a standing order — rules of conduct for workmen employed in industrial establishments — to over 300 workers.
  • This implies industrial establishments with up to 300 workers will not be required to furnish a standing order, a move which experts say would enable companies to introduce arbitrary service conditions for workers.
  • These steps are likely to provide more flexibility to employers for hiring and firing workers without government permission.

(2) Social Security Code

  • It proposes a National Social Security Board which shall recommend to the central government for formulating suitable schemes for different sections of unorganised workers, gig workers and platform workers.
  • Also, aggregators employing gig workers will have to contribute 1-2 per cent of their annual turnover for social security, with the total contribution not exceeding 5 per.

(3) Occupational Safety, Health and Working Conditions Code

  • This code has defined inter-state migrant workers as the worker who has come on his own from one state and obtained employment in another state, earning up to Rs 18,000 a month.
  • The proposed definition makes a distinction from the present definition of only contractual employment.
  • The Code, however, has dropped the earlier provision for temporary accommodation for workers near the worksites.
  • It has though proposed a journey allowance — a lump sum amount of fare to be paid by the employer for to and fro journey of the worker to his/her native place from the place of his/her employment.

What are the other proposals for workers?

  • The IR Code Bill has also proposed a worker re-skilling fund.
  • The contributions for the fund are only detailed from the employer of an industrial establishment amounting to fifteen days wages last drawn by the worker immediately before the retrenchment along with the contribution from such other sources.
  • The mention of ‘other sources’ for funding the re-skilling fund is vague.

What are the concerns raised over the new labour codes?

  • Analysts say the increase in the threshold for standing orders will water down the labour rights for workers in small establishments having less than 300 workers.
  • The increase is uncalled for and shows the government is very keen to give tremendous amounts of flexibility to the employers in terms of hiring and firing.
  • Dismissal for alleged misconduct and retrenchment for economic reasons will be completely possible for all the industrial establishments employing less than 300 workers.
  • The Industrial Relations Code also introduces new conditions for carrying out a legal strike.
  • The time period for arbitration proceedings has been included in the conditions for workers before going on a legal strike as against only the time for conciliation at present.

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

Labour law Reforms


From UPSC perspective, the following things are important :

Prelims level : Various labour laws

Mains level : Labour reforms in India

This session of Lok Sabha has passed 3 Historic and path-breaking Labour Codes.

UPSC may ask the major laws subsumed under these Labour Codes.

What are the 3 bills?

The 3 bills which were passed are

  1. Industrial Relations Code, 2020
  2. Code on Occupational Safety, Health & Working Conditions Code, 2020 &
  3. Social Security Code, 2020

All the labour laws (29 in number) being amalgamated into 4 labour codes are :

Name of the Code 

Amalgamated laws

Wage Code


4 laws –

  1. The Payment of Wages Act, 1936
  2. The Minimum Wages Act, 1948
  3. The Payment of Bonus Act, 1965
  4. The Equal Remuneration Act, 1976
IR Code


3 laws –

  1. The Trade Unions Act, 1926
  2. The Industrial Employment (Standing orders) Act, 1946
  3. The Industrial Disputes Act, 1947
OSH Code


13 laws –

  1. The Factories Act, 1948
  2. The Plantations Labour Act, 1951
  3. The Mines Act, 1952
  4. The Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955
  5. The Working Journalists (Fixation of Rates of Wages) Act, 1958
  6. The Motor Transport Workers Act, 1961
  7. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966
  8. The Contract Labour (Regulation and Abolition) Act, 1970
  9. The Sales Promotion Employees (Conditions of Service) Act, 1976
  10. The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
  11. The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981
  12. The Dock Workers (Safety, Health and Welfare) Act, 1986
  13. The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
Social Security Code


9 laws –

  1. The Employees’ Compensation Act, 1923
  2. The Employees’ State Insurance Act, 1948
  3. The Employees Provident Fund and Miscellaneous Provisions Act, 1952
  4. The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
  5. The Maternity Benefit Act, 1961
  6. The Payment of Gratuity Act, 1972
  7. The Cine Workers Welfare Fund Act, 1981
  8. The Building and Other Construction Workers Welfare Cess Act, 1996
  9. The Unorganised Workers’ Social Security Act, 2008


Here are the key features of these bills:

 (A) Social Security Code, 2020

  • The facility of ESIC would now be provided in all 740 districts. At present, this facility is being given in 566 districts only.
  • EPFO’s coverage would be applicable on all establishments having 20 workers. At present, it was applicable only on establishments included in the Schedule.
  • Provision has been made to formulate various schemes for providing comprehensive social security to workers in the unorganised sector.
  • A “Social Security Fund” will be created on the financial side in order to implement these schemes.
  • Work to bring newer forms of employment created with the changing technology like “platform worker or gig worker” into the ambit of social security has been done in the Social Security Code.
  • Provision for Gratuity has been made for Fixed Term Employee and there would not be any condition for minimum service period for this.
  • With the aim of making a national database for unorganised sector workers, registration of all these workers would be done on an online portal and this registration would be done on the basis of Self Certification through a simple procedure.

 (B) Occupational Safety, Health & Working Conditions Code, 2020

  • Free health checkup once a year by the employer for workers which are more than a certain age.
  • A legal right for getting Appointment Letter given to workers for the first time.
  • Cine Workers have been designated as Audio Visual Worker so that more and more workers get covered under the OSH code. Earlier, this security was being given to artists working in films only.

(C)  Industrial Relations Code, 2020

Efforts made by the Government for quickly resolving disputes of the workers include:

  • Compulsory facility for Helpline for redressal of problems of migrant workers.
  • Making a national database of migrant workers.
  • Provision for the accumulation of one day leave for every 20 days worked when work has been done for 180 days instead of 240 days.
  • Equality for women in every sphere: Women have to be permitted to work in every sector at night, but it has to be ensured that provision for their security is made by the employer and consent of women is taken before they work at night.
  • In the event of the death of a worker or injury to a worker due to an accident at his workplace, atleast 50 % share of the penalty would be given. This amount would be in addition to Employees Compensation.
  • Provision of “Social Security Fund” for 40 Crore unorganized workers alongwith GIG and platform workers and will help Universal Social Security coverage
  • Occupational Safety & Health Code to also can now over cover workers from IT and Service Sector.
  • 14 days notice for Strike so that in this period amicable solution comes out.

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

Urban unemployment in India


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- Issue of employment in India

The article discusses the issue of vulnerability of informal jobs in India and suggests the steps to address the problem.

The urban unemployment in India crept up to 9.83% in August as against 9.15% in July, according to monthly unemployment data released Tuesday by the Center for Monitoring Indian Economy (CMIE). In other words, roughly one in every 10 person in urban areas cannot find work

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

Boosting demand with wage hike


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- Issue of wage growth

The article discusses the threat posed to the Indian economy by the subdued demand following the return of the labourers to their urban jobs.

Rural employment issue

  • About 30 million migrant workers rushed home to their villages during the pandemic.
  • About 60 per cent of out-migration from rural India is aspiration-led.
  • Income earned in urban jobs is 2.5 higher than earned in rural area.
  • Though rural economy has been recovering faster than the urban economy, this optimism could prove short-lived, as eventually the more long-lasting determinants of rural wages could prevail.

What are the determinants of rural wages

1) NREGA wages

  • The government has raised the rural employment guarantee programme (NREGA) wages and outlays.
  • Demand for the scheme is outpacing supply.
  • This demand-supply mismatch means that it may not be an effective driver of higher rural wages.

2) Low construction activities

  • Many rural Indians, especially those without land, have become building labourers.
  • 70 per cent of construction is related to real estate and property developers are dependent on funding from struggling non-banking financial companies.
  • Until this type of lending restarts, construction may not normalise.
  • And that means rural wages may not rise quickly either.

3) Rising debt level

  • The increase in borrowing and fall in inflation over the last few years has increased the “real” indebtedness of rural Indians.
  • This affected particularly the landowners who pay villagers to farm their land.
  • This is likely to hurt their ability to pay high wages.

3 Reasons why wage outlook could be dimmer

  • As migrant labours start to return to their urban jobs, their wage outlook appears to be bleak for 3 reasons.
  • 1) As during demonetisation, workers could find jobs again, but at lower wages.
  • 2) There could be a second-round of pandemic-led labour market weakness, driven by job losses and falling wages from the first round.
  •  3) We find that both rural and urban wages are driven by economic growth, India’s post-pandemic medium-term growth falling by one percentage point to 5 per cent does not bode well.

Way forward

  • Weak wages could keep demand subdued. To offset this policymakers have an important role to play.
  • 1) In particular, policymakers may have to ensure that capital is allocated efficiently.
  • After all, investment is the only way to increase the economy’s capacity to create well-paying jobs.
  • 2) Bringing back investment growth would also involve capital re-allocation.
  • This means taking it away from sectors that are not working and redeploying it in sectors that are.
  • Improving the Insolvency and Bankruptcy Code procedure is a key step here.
  • 3) Another important step is to improve the health of banks as they are the ones allocating capital by giving loans.
  •  Implementation of the 5-Rs — recognition, restructuring, resolution, recapitalisation and reforms — for the banking sector may be particularly useful here.

Consider the question “After supply-side disruption is over, India’s growth may suffer from the subdued wage growth. Suggest the steps to avoid this from happening.”


Supply disruption caused by reverse migration won’t last long, but led by lower wages, demand could remain weak, requiring policy intervention.

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

National Recruitment Agency: Taking jobs closer to people


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 2- National Recruitment Agency

Recruitment reform in the form of National Recruitment Agency will resolve many issues faced by the youth appearing for the multiple government exam.


  • On average, 2.5-3 crore candidates appear for about 1.25 lakh vacancies in the central government every year.
  • But from next year, the NRA will conduct the CET and based on the score, one can apply for a vacancy with the respective agency.

NRA: Composition and functioning

  • The NRA will have representatives from the Ministry of Railways, Ministry of Finance/Department of Financial Services, Staff Selection Commission (SSC), Railway Recruitment Boards (RRBs) and Institute of Banking Personnel Selection (IBPS).
  • A multi-agency body, the NRA will conduct a Common Eligibility Test (CET) to screen/shortlist candidates for the Group B and C (non-technical) posts.
  • The NRA shall conduct a separate CET each for the three levels of graduate, higher secondary (12th pass) and the matriculate (10th pass) candidates for those non-technical posts to which recruitment is presently carried out by the SSC, RRBs and IBPS.

How it will benefit youth

  • It will eliminate multiple tests and save time as well as resources.
  • It will give a big boost to transparency.
  • The multiple recruitment examinations are a burden on the candidates, as also on the respective recruitment agencies, involving avoidable/repetitive expenditure, law and order/security-related issues and venue-related problems.
  • The NRA is a combination of convenience and cost-effectiveness for candidates.
  • Examination centres in every district would greatly enhance access to the candidates located in far-flung areas, with a special focus on creating examination infrastructure in the 117 Aspirational Districts.
  • This will prove a great boon to crores of aspirants residing in hilly, rural and remote areas and most importantly, for female candidates.
  • Taking job opportunities closer to the people is a radical step that would greatly enhance ease of living for the youth.

Consider the question “Recruitment reform in the form of National Recruitment Agency is a radical step that would greatly enhance ease of living for the youth.”


Taking job opportunities closer to the people is a radical step that would greatly enhance ease of living for the youth.

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

Three areas to work on to put India on the path to growth


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3-Areas to put work on to put India on the path of growth

The article suggests the three areas on which country should work on to make it resilient in the future. These three areas include the labour laws for informal employment, conditions of our cities and the strength of our rural economy.


  • The Prime Minister, while addressing the Confederation of Indian Industry (CII) annual meeting urged to think big and partner with the government in putting India on the path to growth.
  • There is much that we can be achieved if government and industry work towards the same objective, and in a spirit of mutual trust.

Let’s look into some areas

1) Employment

  • Over 85 per cent of employment in India is in the informal sector.
  • The Centre for Monitoring the Indian Economy (CMIE) estimates that between mid-March and mid-April, 120 million people lost their jobs.
  • With this unemployment rise to an all-time high of 27 per cent.
  • There was reverse migration on an unprecedented scale — some 10 million people abandoned cities to return to their native villages.
  • As economic activity has restarted in cities, CMIE reports that unemployment is now down to around 9 per cent.

3 Problems we must address

1) Need for labour regulation

  • We have stringent labour laws to protect workers, but this covers only the 15 per cent formal sector employment.
  • The 85 per cent of our workforce who are informally employed have almost no protection, and employers have almost complete flexibility.
  • We need to address both the formal and informal labour spectrum to get the balance right between flexibility and protection for all labour.

Way forward

  • Everyone must have a minimum level of protection, and every employer a minimum level of flexibility.
  • This calls for a new social contract to define a well-calibrated social security system.
  • This huge project demands good faith and strong leadership by industry, labour and government.

2) Living conditions of our cities

  • We need a massive private home-building programme.
  • It probably needs much more liberal land-use regulations — our cities have among the least generous floor-space indices (FSI) in the world.
  • New York, Hong Kong, and Tokyo have an FSI five times Mumbai’s.
  • Again, this is a multi-year project, and it involves state and city governments partnering with private developers.
  • India is unique in having 70 per cent of our population still residing in rural areas.
  • We must encourage the migration of people to higher productivity occupations in our cities.
  • And we must ensure that clean, affordable and accessible housing is available for all in our cities.

3) Strength of our rural economy

  • Reverse migration is also an opportunity to collaborate in spreading the geography of development.
  • We need a three-pronged approach:
  • 1) As Ashok Gulati has often argued, the easiest way to grow farmer incomes is by having them grow more value-added crops.
  • Exports of fruits and vegetables must be consistently encouraged.
  • The cultivation of palm plantations with potential for huge import substitution, we need corporate farming as the gestation period of seven years for the first crop is too much for the average farmer to handle.
  • The Atmanirbhar agricultural reforms, which permit contract farming, and open up agricultural markets, are major medium-term reforms. Implemented right, they can transform agricultural markets.
  • 2) We need to encourage agro-processing near the source.
  • Fostering entrepreneurship in rural and semi-urban areas would combine nicely with local processing.
  • 3) We need to invest even more massively in rural connectivity.
  • Today, we would add digital connectivity to road connectivity to level the playing field for all regardless of where they live.

Consider the question “What are the vulnerabilities in our economic structure that were highlighted by the covid pandemic? Also suggest the measures to make our rural economy strong and resilient to such shocks.”


The task is huge, and only collaboration between all levels of government (Union, state, and city) and our dynamic private sector can hope to make substantial progress.

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

Job Losses during Lockdown


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Coronovirus induced job-losses

The data by the Centre for Monitoring Indian Economy (CMIE) briefs us about the job losses due to lockdown restrictions imposed because of the COVID pandemic.

We can utilize this data as examples for answer writing.

CMIE data on job losses

  • Salaried jobs: They suffered the biggest hit during the lockdown, with a total loss estimated to be at 18.9 million during April-July.
  • Informal and non-salaried jobs: They have shown improvement during the same period increasing to 325.6 million in July from 317.6 million last year, an increase of 2.5 per cent.
  • Small traders, hawkers and daily wage labourers: They were the worst hit by the lockdown in April, comprising 91.2 million of the jobs lost from the total loss of 121.5 million in that month.
  • Farm employment: A sharp rise was seen in June to 130 million, with good rains and the consequent sowing absorbing a lot of the labour that was lost in non-farm sectors.

About CMIE

  • CMIE, or Centre for Monitoring Indian Economy, is a leading business information company.
  • It was established in 1976, primarily as an independent think tank.
  • CMIE produces economic and business databases and develops specialised analytical tools to deliver these to its customers for decision making and for research.
  • It analyses the data to decipher trends in the economy.

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

Importance of increasing the income of those at the bottom of income pyramid


From UPSC perspective, the following things are important :

Prelims level : Marginal propensity to consume

Mains level : Paper 3- Income level and demand problem

India’s growth has been fuelled by demand which has dampened owing to various factors. One untapped source of demand could be the group which lies at the bottom of income pyramid. This article suggests the ways to increase the income of this group.

Structural demand problem

  • India’s structural demand problem predates the COVID-19 shock.
  • This problem has been compounded after lockdown as jobs have been lost and incomes have collapsed.
  • Boosting domestic demand is critical for an economic revival as external demand is likely to remain muted.
  • It is argued that India’s growth story has been driven by demand generated by those who are at the top of India’s socio-economic pyramid
  • But the demand from that section has now plateaued.

So, where the demand is going to come from?

  •  Turn to those at the bottom of the pyramid.
  • Those at the bottom of pyramid have a high marginal propensity to consume.
  • But realising the untapped demand potential of this group requires enhancing their incomes and earnings.

Division of India’s workforce

  • Periodic Labour Force Survey (2018-19) tells us that less than 10 per cent of the workforce is engaged in regular formal jobs.
  • Another 14 per cent are engaged in regular informal jobs with average monthly earnings (Rs 9,500), which is roughly equivalent to or slightly below a minimum wage.
  • The self-employed and casual workers account for 50 per cent and 24 per cent of the workforce respectively and report average earnings that are considerably below a decent minimum amount.
  • Casual workers, who are unlikely to receive work on every day of the month, are at the bottom of the employment structure.

How to increase the earning of those at the bottom of employment structure

  • Devising strategies that enhance productivity growth in the informal economy could increase their income.
  • Raising the minimum wages of the worst-off workers.
  • At present, under the Minimum Wage Act,  India has a complex set of minimum wages which offer different wages by occupation type and skill levels.
  • The Code on Wages (2019) seeks to universalise minimum wages and extend them to the unorganised sector.

Way forward

  • 1) Ensuring a decent minimum wage for those who are the bottom of the distribution — the casual labour, would be helpful in this context.
  • This will help set a higher wage floor for others engaged in low-paid work, including regular informal workers.
  • 2) It is also important that minimum wages are paid in public workfare programmes too, in particular MGNREGA works.
  • At present, MGNREGA wages are not covered under the Minimum Wages Act.
  • 3) The minimum wage can be linked to the consumption expenditure of the relatively better-off group of workers.

Consider the question “India’s growth story is scripted by demand which has been tapering off. The new source of demand could be those at the bottom of income structure. Suggest the strategies to increase the income of this group which could then translate into demand.”


The Indian employment challenge today cannot be seen independently of the problem of inadequate income. The above intervention will not only enable income enhancement of those in low-paid work but also add fuel to demand and growth, this time from those at the bottom of the distribution.

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

Garib Kalyan Rojgar Abhiyaan


From UPSC perspective, the following things are important :

Prelims level : MGNREGA, Garib Kalyan Rojgar Abhiyaan

Mains level : Garib Kalyan Rojgar Abhiyaan

PM Modi has launched the Garib Kalyan Rojgar Abhiyaan, an employment scheme for migrant workers.

Practice question for mains:

Q. Discuss the silent success of MGNREGA in COVID-19 times.

Garib Kalyan Rojgar Abhiyaan

  • It is a skill-based employment scheme aimed primarily at migrant workers who have returned to their villages to escape the COVID lockdown distress.
  • With a 125-workday mandate to create public infrastructure, with the involvement of 11 central departments, the Rs 50,000-crore initiative will focus on job creation.
  • It will be implemented in 116 districts in six states — UP, MP, Jharkhand, Odisha, Rajasthan and Bihar — that saw the maximum number of migrant workers returning over the last three months.

Works under the scheme

  • The government has identified 25 work areas for employment in villages, for the development of various works.
  • These 25 works or projects are related to meet the needs of the villages like rural housing for the poor, Plantations, provision of drinking water through Jal Jeevan mission,  Panchayat Bhavans, community toilets, rural mandis, rural roads, other infrastructure like Cattle Sheds, Anganwadi Bhavans etc.

Must read:

[Burning Issue] Reorienting MGNREGA in times of COVID

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

Paying attention to condition of migrant workers


From UPSC perspective, the following things are important :

Prelims level : Acts related to workers

Mains level : Paper 3- Migrant workers

Issue of migrant workers caught attention of the nation amid lockdown. This issue has wider implications for the economy. This article highlights need for formulating a program to deal with the migrant labourers’ issue in its entirety.

Issue with many implications: Migrant labour

  • Out of the total labour force of 465 million workers, around 91 per cent (422 million) were informal workers in 2017-18.
  • The Economic Survey (2017) estimated 139 million seasonal or circular migrants.
  • Circular urban migrants perform essential labour and provide services.
  • Hence, this issue has implications for livelihoods, agriculture, food security, and safety net policy as well as programme responses.

Existing and proposed legal provision

  • There exists The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act of 1979.
  • Despite this act, there is no central registry of migrant workers.
  • The Occupational Safety, Health and Working Conditions Code of 2019 has been introduced in Parliament.
  • This code seeks to promote the welfare of migrant workers and legal protection for their rights.
  • The code seeks to merge 13 labour laws, including the Inter-state Migrant Workmen Act, 1979 into a single law.

One nation, one ration card

  • “One nation one ration card” addresses the problem of ration-card portability.
  • The move would benefit nearly 670 million people and will be completed by March 2021.

Provisions in the package for migrant workers, small farmers, street vendors

  • There is a provision of Rs 30,000 crore through NABARD, in addition to the already existing Rs 90,000 crore allocation, for the rabi harvest and post-harvest rabi-related work for small and marginal farmers.
  • Further, Rs 2 lakh crore concessional credit will be provided to two crore farmers across the country.
  • About Rs 11,000 crore was allocated for the urban poor, which includes the migrant workers, for building shelter homes for the homeless.
  • Several government-funded housing projects in major cities would be developed into affordable rental housing complexes on a PPP mode.

Free grains for two months

  • The Centre will transfer 8 lakh metric tonnes of grain and 50,000 metric tonnes of chana to state governments.
  • Form this stave will provide 5 kg of grain (wheat or rice) per labourer and 1kg of chana per family per month for two months free.
  • This is expected to benefit up to eight crore migrant workers.

Program for growth and structural transformation

  • Devicing such a program requires a review of national legal, regulatory and institutional concerns in resettlement and rehabilitation of migrant labourers.
  • There is a need to adopt a human rights approach to address the socio-legal issues.
  • The resolution of contradictions in trade, fiscal, monetary and other policies would also require.
  • Following 3 policy changes are urgently required.
  • 1)The implementation of the report of the task force on migration (2017).
  • 2)Expansion of the outreach of the Integrated Child Development Services– to include migrant women and children.
  • 3) Inclusion of migrant children in the annual work plans of Sarva Shiksha Abhiyan.
  • Given the environment of uncertain livelihoods it is necessary to strengthen the resilience of the financial system and skill workers.
  • The issues and challenges of migrant workers require leveraging information and communication technologies and the JAM trinity.

Consider the question “Migrant workers issue is an issue with many implications. This issue needs to be considered in its entirety to formulate a speedy and effective response. In light of this suggest the required policy changes.”


The debilitating physical effects of the coronavirus necessitate coordinated and concerted efforts by all stakeholders to meet the challenges of the present and the expectations of the future. We shall overcome.

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

Reshaping the gig economy


From UPSC perspective, the following things are important :

Prelims level : Gig economy

Mains level : Paper 3- Gig economy and issue it faces

3 min

The shockwave that pandemic sent through the economy has been reshaping the global job market. Gig economy would have to accommodate the new entrants. This article underlines the changes in the gig economy after the pandemic. Four areas that need attention are also discussed here.

What constitutes gig economy?

  • The word “gig” includes in its current parlance all freelancers, disconnected from the workplace.
  • Example: drivers of Uber, delivery boys of Zomato, plumbers and electricians of Urban Clap.
  • The gig economy is not confined to low-skilled jobs. Skilled professionals are also part of it.

How pandemic is reshaping the gig economy

  • Aviation, hospitality, automobile entertainment and retail are some of the hardest hit sectors.
  • The classic gig anchors- Uber and AirBnB, have laid off thousands of people.
  • In contrast to this, highly skilled professionals —laid off by employers — are joining the gig bandwagon.
  • Surely, job demand will far outstrip supply, at least in the short-term.

What does the future hold?

  • A Deloitte report from April notes that Indian organisations are considering to expand the share of gig workers.
  • Declining full-time jobs will lead to increased assignment-based hiring.
  • For instance, a graphic designer working from home could be in demand with a media house or Netflix may hire AI designer paid by an hour to personalize streaming.
  • But, what is missing in picture? The national database is missing.

4 focus areas of gig economy

1. National database: A missing link

  • National database of job seekers and job creators can connect firms with qualified candidates.
  • A prospective employee would need access to a job database, sorted by skill, geography, duration and emoluments.
  • Companies should be able to dip into the data pool of talent, experience, location, qualification and expectation.
  • Currently, both data sets are fragmented and stored in silos.
  • The government could play the role of a facilitator, in partnership with the private sector.

2. Regulatory protection to gig workforce

  • The gig economy increases employee vulnerability.
  • This segment of the economy so far has been outside the ambit of regulatory labour policies.
  • Social protection like wage protection, health benefits and safety assurance should be made available to gig workers.
  • The Karnataka government has considered introducing a new labour legislation focused on the gig economy.

3. Prepare college students for freelancing

  • Apart from regular campus placements, the placement cells need to reorient and focus on preparing students for freelancing opportunities.
  • For the educated youth, this could be the first step towards entrepreneurship.

4. Gender equality

  • Gender is another crucial dimension of the digital labour markets.
  • The low enrolment of girls for higher education in science, technology, engineering and math would constrict their opportunity in the gig world.
  • Going ahead, this would need greater policy attention to ensure gender parity.

Consider the question “What is the gig economy? Suggest the policy measures to make it more resilient in the present economic context disrupted by the pandemic.”


The government and the private sector would need to collaborate along with academia to build adequate safeguards in the unfolding eco-system.

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

The Urban Learning Internship Program (TULIP)


From UPSC perspective, the following things are important :

Prelims level : TULIP

Mains level : Various employment measures

The govt. has launched the TULIP program for providing internship opportunities to fresh Graduates in all ULBs & Smart Cities.

Possible prelims question:

Q. The TULIP program recently seen in news is related to: HRD/Floriculture/Urban Livelihood etc.


  • TULIP is a portal jointly developed by the Ministry of HRD, Ministry of Housing & Urban Affairs, and All India Council for Technical Education (AICTE).
  • It will help reap the benefits of India’s demographic dividend as it is poised to have the largest working-age population in the world in the coming years.
  • It would help enhance the value-to-market of India’s graduates and help create a potential talent pool in diverse fields like urban planning, transport engineering, environment, municipal finance etc.
  • It will further the Government’s endeavours to boost community partnership and government- academia-industry-civil society linkages.
  • This launch is also an important stepping stone for the fulfillment of MHRD and AICTE’s goal of 1 crore successful internships by the year 2025.

Why need such a program?

  • India has a substantial pool of technical graduates for whom exposure to real-world project implementation and planning is essential for professional development.
  • General education may not reflect the depth of productive knowledge present in society.
  • Instead of approaching education as ‘doing by learning,’ our societies need to reimagine education as ‘learning by doing.’

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

Three thresholds in Industrial Disputes Act that need revision


From UPSC perspective, the following things are important :

Prelims level : Industrial Disputes Act 1947

Mains level : Paper 2- Threshold limits in IDA and issues with it.

Sometimes the measures we come up with end up doing exactly the opposite of what they were supposed to do. This might be the case with some provisions in the Industrial Dispute Act. This article deals with 3 such provisions in the IDA. So, what are these provisions? How the issues caused by these provisions could be resolved? Read to know more…

How provisions of IDA could be detrimental?

  • What made so many migrants suddenly long for their village after lockdown?
  • The answer lies in our Industrial Disputes Act (IDA), the motherboard of our labour laws.
  • IDA has encouraged short-term employment, low skills and zero security.
  • It did this by setting up thresholds which disincentivised long-term commitment of workers to entrepreneurs and vice versa.
  • It also kept firms informal and unwilling to invest in human capital.
  • This is why when the lockdown happened, it turned into a migrant crisis.

Let’s look at  3 thresholds in IDA that are causing harm

  • 1) Hire more than 99 workers, and you will have to notify the government before you can fire any one of them.
  • 2) Hire more than 20 and you open yourself up to provident fund commitments and bonus payments.
  • 3) If you want to deny workers severance pay, never keep them continuously employed for more than 240 days.

So, how IDA ends up discouraging formalisation?

  • Given these provisions in the IDA, entrepreneurs are reluctant to hire more than 99 workers for over 240 days.
  • The employers are naturally tempted to observe these thresholds and duck under the radar.
  • This is made easier by the fact that these thresholds mesh well with the fear that the middle-class — and upwards — have of a working-class takeover.
  • As a result, these thresholds have only encouraged the informal sector, where both unregistered labour and unregistered entrepreneurs dominate.
  • It has led to the proliferation of informal enterprises and low-skill workers.
  • In the first 15 years of this century itself, over half the increase in total employment has been that of contract workers.
  • This has also led to a phenomenal rise in MSMEs as the IDA has discouraged entrepreneurs from harbouring any ambitions to grow big and formal.
  • The MSMEs have, consequently, increased in number from 3.6 crore units in 2012 to about 6 crore today.
  • Since there are constraints on both the workforce size and duration of employment, upskilling and R&D naturally become early casualties.
  • India spends only 0.7 per cent of its GDP in R&D, one of the lowest in the world, while South Korea spends 4.2 per cent.

Contribution of MSME in GDP is not increasing

  • Over 94 per cent of MSMEs are in the Micro sector and their contribution to GDP is just not measuring up.
  • In 2012, MSMEs produced 37.54 per cent of our GDP.
  • But this number fell to 30.7 per cent in 2015, and in 2019 it decreased further to 29.7 per cent, though they are still working full throttle.
  • Yet, the lure to stay on the good side of the IDA thresholds is so compelling that even formal units are today outsourcing from the informal ones.
  • Over time, the IDA has succeeded in converting a large number of organised sector companies into strange, hybrid economic creatures, both fishy and foul.

But, how removal of the 3 thresholds will change the situation?

  • If the 3 mentioned thresholds are removed, every worker — regardless of factory size — is entitled to the same rights.
  • Likewise, every employer, regardless of factory size, can hire and fire workers.
  • There is greater freedom on both sides, but this freedom comes with a price that does not discourage either size or skills in an enterprise.
  • The worker can now be fired without notifying the government, but must be compensated with severance wages, regardless of the size of the firm.
  • Also, unlike the IDA, all the firms must have a formal dispute resolution board.
  • Now that the enterprises have been freed of the size threshold, entrepreneurs get no advantage in dwarfing their firms.
  • Other reforms can soon follow, such as allowing for workers’ representation in a firm’s supervisory board, as it happens in Germany.
  • Measures such as these create trust between employees and employers, and also remove the threatening spectre of a working-class strike.

Consider the question “Various provision of the Industrial Disputes Act which were enacted but with a different purpose now seems to place both the workers and employers in a disadvantageous position. In light of this statement, examine the issues with the threshold limits of the number of employees and number of employment days in the Industrial Disputes Act.”


In the ultimate analysis, the IDA does not produce winners, only losers. The workers remain skill-stunted and insecure, and the entrepreneurs, too, pull back from releasing their much-vaunted “animal spirits”. So, the IDA thresholds must go and not be merely fiddled with, as some states have done.

Back2Basics: Industrial Disputes Act 1947

  • The main purpose of the Industrial Disputes Act, 1947 is to ensure fair terms between employers and employees, workmen and workmen as well as workmen and employers.T
  • The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations.

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

‘Rozgar Setu’ Scheme for skilled workers


From UPSC perspective, the following things are important :

Prelims level : ‘Rozgar Setu’ Scheme

Mains level : Various employment measures

The Madhya Pradesh has announced the launch of the ‘Rozgar Setu’ Scheme to help secure employment for skilled workers who have returned.

State schemes are quite often seen in the news. They are very important from the prelims perspective:

Rytha Bandu (Telangana): Cash transfer scheme of Rs 5,000/acre, per season

KALIA (Krushak Assistance for Livelihood and Income Augmentation) Scheme (Odisha)

Mukhya Mantri Krishi Aashirwad Yojana (Jharkhand)

Krishak Bandhu Scheme (West Bengal)

‘Rozgar Setu’ Scheme

  • The ‘Rozgar Setu’ scheme to provide work to the maximum number of returned skilled workers.
  • After such workers requiring employment are identified, the government will contact factory and workshop owners and contractors overseeing infrastructure projects such as road and bridge construction.
  • This would fulfil the manpower requirement of industries as well as provide employment to workers during the COVID-19 pandemic.

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

[pib] National Migrant Information System (NMIS)


From UPSC perspective, the following things are important :

Prelims level : National Migrant Information System (NMIS)

Mains level : Inter-state workers migration

The National Disaster Management Authority (NDMA) has developed an online Dashboard – National Migrant Information System (NMIS).

Did you notice, the peculiarity of the NMIS? The portal is developed and maintained by the National Disaster Management Authority (NDMA) not Ministry of Labour & employment or Labour bureau.

About NMIS

  • The NMIS aims to capture the information regarding the movement of migrants and facilitate the smooth movement of stranded persons across States.
  • The key data pertaining to the persons migrating has been standardized for uploading such as name, age, mobile no., originating and destination district, date of travel etc., which States are already collecting.
  • States will be able to visualize how many people are going out from where and how many are reaching destination States.
  • The mobile numbers of people can be used for contact tracing and movement monitoring during COVID-19.


  • The portal helps maintain a central repository on migrant workers and help in speedy inter-State communication/co-ordination to facilitate their smooth movement to native places.
  • It has additional advantages like contact tracing, which may be useful in overall COVID-19 response work.

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

Is the suspension of labour laws a silver bullet?


From UPSC perspective, the following things are important :

Prelims level : Various labour laws.

Mains level : Paper 2- Legal issues in the suspension of labour laws by the States.

In keeping with the exigencies caused by the pandemic, some State governments have suspended several provision of labour laws. This article analyses the implications of such suspensions. And also emphasises the lack of legal basis in the State governments actions. Evolution of the labour laws in India is also discussed here. So, what are these legal issues? Read to know more…

Some labour laws suspended by the UP government

  • The Uttar Pradesh government has issued an ordinance keeping in abeyance almost all labour statutes.
  • Which includes laws on maternity benefits and gratuity.
  • The Factories Act, 1948.
  • The Minimum Wages Act, 1948.
  • The Industrial Establishments (Standing Orders) Act, 1946.
  • The Trade Unions Act, 1926.
  • This will take away the protection conferred on organised labour by Parliament.

Some repressive labour laws in colonial era

  • Bengal Regulations VII, 1819 was enacted for the British planters in Assam tea estates.
  • Workers had to work under a five-year contract and desertion was made punishable.
  • Later, the Transport of Native Labourers’ Act, 1863 was passed in Bengal.
  • The Act strengthened control of the employers and even enabled them to detain labourers in the district of employment and imprison them for six months.
  • Bengal Act VI of 1865 was later passed to deploy Special Emigration Police to prevent labourers from leaving and return them to the plantation after detention.

Workers’ struggle in British India

  • The labour laws in India have emerged out of workers’ struggles, which were very much part of the freedom movement against oppressive colonial industrialists.
  • Since the 1920s there were a series of strikes and agitations for better working conditions.
  • Several trade unionists were arrested under the Defence of India Rules.
  • The workers’ demands were supported by our political leaders.
  • Britain was forced to appoint the Royal Commission on Labour, which gave a report in 1935.
  • The Government of India Act, 1935 enabled greater representation of Indians in law-making.
  • This resulted in reforms, which are forerunners to the present labour enactments.
  • The indentured plantation labour saw relief in the form of the Plantations Labour Act, 1951.

Acts passed in India to protect workers’ rights

  • The Factories Act lays down eight-hour work shifts, with overtime wages, weekly offs, leave with wages and measures for health, hygiene and safety.
  • The Industrial Disputes Act provides for workers participation to resolve wage and other disputes through negotiations so that strikes/lockouts, unjust retrenchments and dismissals are avoided.
  • The Minimum Wages Act ensures wages below which it is not possible to subsist.

Constitutional basis of the labour laws

  • These enactments further the Directive Principles of State Policy.
  • These laws also protect the right to life and the right against exploitation under Articles 21 and 23.
  • Trade unions have played critical roles in transforming the life of a worker from that of servitude to one of dignity.
  • In the scheme of socio-economic justice the labour unions cannot be dispensed with.

Is the suspension of labour laws legally sound?

  • The Supreme Court, in Glaxo Laboratories v. The Presiding Officer, Labour (1983) said about contract between employer and employee “the contract being not left to be negotiated by two unequal persons but statutorily imposed.”
  • The ‘two unequal’ here refers to the inequality between employee and employer.
  • In Life Insurance Corporation v. D. J. Bahadur & Ors (1980), the Supreme Court highlighted that any changes in the conditions of service can be only through a democratic process of negotiations or legislation.
  • Moreover, Parliament did not delegate to the executive any blanket powers of exemption. 
  • Section 5 of the Factories Act empowers the State governments to exempt only in case of a “public emergency”.
  • Which is explained as a “grave emergency whereby the security of India or any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance”.
  • There is no such threat to the security of India now.
  •  Labour is a concurrent subject in the Constitution and most pieces of labour legislation are Central enactments.
  • The U.P. government by Ordinance has said that labour laws will not apply for the next three years.
  •  How can a State government, in one fell swoop, nullify Central enactments?
  • The Constitution does not envisage approval by the President of a State Ordinance which makes a whole slew of laws enacted by Parliament inoperable in the absence of corresponding legislations on the same subject.
  • The orders of the State governments therefore lack statutory support. 

Consider the question, “Several State governments have resorted to the suspension of labour laws in the aftermath of corona crisis. Examine the implications of the suspension of the laws for the rights of the labours.”


Governments have a constitutional duty to ensure just, humane conditions of work and maternity benefits. The health and strength of the workers cannot be abused by force of economic necessity. Labour laws are thus civilisational goals and cannot be trumped on the excuse of a pandemic.



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

Changing labour laws not a solution


From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- Changes in labour laws and growth in the economy.

Recently several State governments made changes in their labour laws and removed or expanded limits on working hours and changed several other provisions. The article argues that the move may not be as beneficial as it is thought to be. So, how come the changes turned out to be detrimental to the interests of the workers? and what are the other issues involved? Read to know more…

What changed laws mean?

  •  Uttar Pradesh introduced an ordinance that has scrapped most labour law for three years.
  • This was done ostensibly for two reasons- 1) creating jobs and 2)for attracting factories exiting China.
  • These laws deal with -the occupational safety, health and working conditions of workers, regulation of hours of work, wages and settlement of industrial disputes.
  • They apply mostly to the economy’s organised (formal) sector, that is, registered factories and companies, and large establishments in general.
  • Madhya Pradesh and Gujarat have quickly followed suit.
  • Reportedly, Punjab has already allowed 12-hour shifts per day.

Why it is not a good move?

  •  Significantly, migrant labour will be critical to restoring production once the lockdown is lifted.
  • In fact, factories and shops are already staring at worker shortages.
  • Instead of encouraging workers to stay back or return to cities by ensuring livelihood support and safety nets, State governments have sought to strip workers of their fundamental rights.
  • The abrogation of labour laws raises many constitutional and political questions.
  • Scrapping labour laws to save on labour costs will not help start the economy but will do exactly the opposite.
  • It will reduce wages, lower earnings (particularly of low wage workers) and reduce consumer demand.
  • Further, it will lead to an increase of low paid work that offers no security of tenure or income stability.
  • It will increase informal employment in the formal sector instead of encouraging the growth of formal work.

Demand is a reason for the slowdown

  •  There are no inherent shortages at the moment as the inflation rate remains moderate.
  • Before the lockdown, the annual GDP growth rate had plummeted to 4.7% during October-December quarter of 2019-20, from 8.3% in the full year of 2016-17.
  • The slowdown is due to lack of demand, not of supply, as widely suggested.
  • With massive job and income losses after the lockdown, aggregate demand has totally slumped, with practically no growth.
  • Therefore, the way to restart the economy is to provide income support and restore jobs.
  • This will not only address the humanitarian crisis but also help revive consumer demand by augmenting incomes.

2 concerns over the rationale of scrapping laws

  • The rationale for scrapping labour laws to attract investment and boost manufacturing growth poses two additional questions.
  • One, if the laws were in fact so strongly pro-worker, they would have raised wages and reduced business profitability.
  • But the real wage growth (net of inflation) of directly employed workers in the factory sector has been flat (2000-01 to 2015-16).
  • This is because firms have increasingly resorted to casualisation and informalisation of the workforce to suppress workers’ bargaining power.
  • Two, it is not right to blame the disappointing industrial performance mainly on labour market regulations.
  • Industrial performance is not just a function of the labour laws.
  • The industrial performance also depend on the size of the market, fixed investment growth, credit availability, infrastructure, and government policies.
  • In fact, there is little evidence to suggest that amendment of key labour laws by Rajasthan and Madhya Pradesh in 2014 took them any closer to their goal of creating more jobs or industrial growth.
  • The role of labour market regulations may be more modest than the strong views expressed against them in the popular debates.

Time to rationalise the labour laws

  • India’s complex web of labour laws, with around 47 central laws and 200 State laws, need rationalisation.
  • However, now more than ever before, reforms need to maintain a delicate balance between the need for firms to adapt to ever-changing market conditions and workers’ employment security.
  • Depriving workers of fundamental rights such as freedom of association and the right to collective bargaining, and a set of primary working conditions such as adequate living wages, limits on hours of work and safe and healthy workplaces, will create a fertile ground for the exploitation of the working class.
  • Presently, over 90% of India’s workforce is in informal jobs.
  • These informal jobs have no regulations for decent conditions of work, no provision for social security and no protection against any contingencies and arbitrary actions of employers.

Consider the question “There is a rising demand for reforms in the labours laws in India. Examine the issues with the current labour laws in India. Suggest the areas which require improvements “


The changes made by the State governments should not end up doing more harm than good. To ensure that there must be a careful calibration of the move and its consequences.

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

Changes in labour laws: legal but not appropriate


From UPSC perspective, the following things are important :

Prelims level : Emergency provision dealing with internal disturbance/ Provisions related to ordinances

Mains level : Paper 2- Changes made in labour laws without consultation.

The article examines the changes made in the labour laws by several states. The legal route to make these changes are different. While some states used the Emergency provision, others used the Ordinance route. One major issue with these changes is that these were brought in without consultation.

What legal route was used by the States?

  • Changes were made by the several state government in the labour laws dealing with the maximum working hours and other provisions.
  • These changes have been made through notifications issued by the State governments and will be applicable for the next three months.
  • M.P. has also suspended most provisions of the Industrial Disputes Act, 1946 (except those related to retrenchment and layoffs) for 1,000 days for State undertakings.
  • In addition, M.P. issued an ordinance to amend two laws.
  • The M.P. Industrial Employment Standing Orders Act will apply to establishments with more than 100 workmen (up from the existing threshold of 50), in line with the Central Act.
  • The ordinance also enables the government to exempt establishments from the provision of another Act that provided for a labour welfare fund.
  • The Uttar Pradesh government has approved an ordinance that exempts establishments from all labour laws for three years with some exceptions.
  • As this will override provisions of some Central laws, it will require the assent of the President or, in effect, the assent of the Central government.
  • The question is, was there sufficient consultation before all these changes were made?

Constitutional provisions for the legal route taken: Emergency and ordinance

  • As per the Constitution, the legislature has the authority to make laws.
  • Such laws could delegate powers to the government which are in the nature of detailing some requirements.
  • For example, the Factories Act allows State governments to exempt factories from the provisions of the Act during public emergencies for a maximum period of three months.
  • A public emergency is defined as a grave emergency whereby the security of India or any part is threatened by war, external aggression or internal disturbance.
  • Most States have used this provision, presumably interpreting the current situation as an ‘internal disturbance’.
  • Haryana has used a provision that allows relaxation of work hours “to deal with an exceptional press of work”.
  • The Constitution also permits Central and State governments to make laws through the issuance of an ordinance when the legislature is not in session.
  • Such a law needs to be ratified by the legislature within six weeks of the beginning of the next session. M.P. and U.P. are using this procedure.

Issues with the changes made

  • Usually, any change in an Act follows a rigorous process of public consultation, scrutiny by committees of Parliament, and debates in the House before being approved.
  • The changes described here have not gone through such a process.
  • However, most of these have a three-month time limit, and any extension would need to be approved by the legislature.

The four labour codes

  • The Parliament is consolidating 29 existing laws into four codes dealing with- 1) wages, 2) occupational safety and health, 3) industrial relations,4) social security.
  • The first of these has been enacted, the Standing Committee on Labour has submitted the report on the next two, and is examining the last.
  • The Code on Occupational Safety and Health does not specify the maximum hours of work but empowers the government to do so.
  • The Standing Committee report states that the government agreed to incorporate a provision of maximum eight hours per day with overtime permitted for certain types of industry.

Consider the question “Several States made changes in the labour laws to deal with the problems caused by the corona pandemic. Examine the legal provisions used for making such changes by various States. What are the issues with such changes?”


Given the emergency, the government has to take quick action and change the response as the situation evolves. However, that should not be a reason to exclude the processes of consultation with and scrutiny by elected representatives. The legitimacy of state action in a parliamentary democracy comes from the fact that there is constant oversight and check by elected representatives.

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

Explained: How can Inter-State workers be protected?


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Inter-state workers migration


  • Following the novel coronavirus pandemic, the nationwide lockdown announced on March 24 at short notice has caused immense distress to migrant workers around the country.
  • Hundreds have been seen trying to walk home to Uttar Pradesh, Bihar, West Bengal and Odisha from their places of work in Rajasthan, Delhi, Maharashtra, Gujarat and so forth.

Try a mains question on this issue:

Inter state migrants face social, economic and cultural shocks. Discuss some steps taken by center and state governments. Also suggest further reforms.

Inter-State workers: Where is their almighty?

  • Recently, 16 migrant labourers who were trying to return to Madhya Pradesh, their home State, on foot were killed when a goods train ran over them.
  • Questions are being raised about their welfare and the lack of legal protection for their rights.
  • Those working in the field of labour welfare have recalled a 1979 law to regulate the employment and working conditions of inter-State migrants.
  • The lack of serious implementation has led to their rights being ignored.

What about occupational safety?

  • As part of the present regime’s efforts towards consolidating and reforming labour law, a Bill has been introduced in Parliament called the Occupational Safety, Health and Working Conditions Code, 2019.
  • The proposed code seeks to merge 13 labour laws into a single piece of legislation.
  • The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, is one of them.
  • Activists fear that specific safeguards given to migrant workers may be lost as a result of this consolidation.

Inter-State Migrant Workmen Act, 1979: What does the law envisage?

  • The Act seeks to regulate the employment of inter-State migrants and their conditions of service.
  • It is applicable to every establishment that employs five or more migrant workmen from other States; or if it had employed five or more such workmen on any day in the preceding 12 months.
  • It is also applicable to contractors who employed a similar number of inter-State workmen.
  • The Act would apply regardless of whether the five or more workmen were in addition to others employed in the establishment or by the contractors.
  • It envisages a system of registration of such establishments. The principal employer is prohibited from employing inter-State workmen without a certificate of registration from the relevant authority.
  • The law also lays down that every contractor who recruits workmen from one State for deployment in another State should obtain a licence to do so.

What are the beneficial provisions for inter-State migrants in it?

  • The provision for registration of establishments employing inter-State workers creates a system of accountability and acts as the first layer of formalizing the utilization of their labour.
  • It helps the government keep track of the number of workers employed and provides a legal basis for regulating their conditions of service.
  • As part of the licensing process, contractors are bound by certain conditions.
  • These include committing them to provide terms and conditions of the agreement or any other arrangement on the basis of which they recruit workers.
  • In no case, shall the wages be lower than what is prescribed under the Minimum Wages Act.

What does the proposed Code say on migrant workers?

  • The attempt to consolidate laws relating to occupational safety, health and working conditions means that many separate laws concerning various kinds of workers and labourers will have to be repealed.
  • The proposed law seeks to repeal 13 Acts such as the Factories Act, Mines Act, Dock Workers’ Act, the Inter-State Migrant Workmen Act, and other enactments relating to those working in plantations, construction, cinema, beedi and cigarette manufacture, motor transport, and the media.

What does the news law promise for migrant workers?

  • Regarding inter-State migrant workers, the Act includes them in the definition of ‘contract labour’.
  • At the same time, an inter-State migrant worker is also separately defined as a person recruited either by an employer or a contractor for an establishment situated in another State.
  • The Code has a chapter on ‘contract labour and inter-State migrant workers’, but the Parliamentary Standing Committee has recommended that the provisions relating to migrant workers be covered in a separate chapter.
  • The Code contains provisions similar to the 1979 Act regarding registration of establishments, licensing of contractors and the inclusion of terms and conditions on hours of work, wages and amenities.
  • Further, both the old Act and the proposed Code envisage the payment of a displacement allowance and a journey allowance to inter-State migrant workers.

Trade Union’s response

  • Even though the Code seeks to preserve many of the protections and rights are given to inter-State workers, trade unions feel that it is always better to have a separate enactment.
  • The unprecedented distress and misery faced by migrant workers due to the current lockdown have drawn attention to beneficial legislation dedicated to their welfare.
  • The Centre of Indian Trade Unions (CITU) has highlighted the fact that both the States where they work and home States have obligations cast upon them in the existing law.
  • Despite the fact that it has been poorly implemented at all, labour unions feel that preserving the separate enactment and enforcing it well is a better option than subsuming it under a larger code.

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

Kurzarbeit Scheme


From UPSC perspective, the following things are important :

Prelims level : Kurzarbeit Scheme

Mains level : Strategies to prevent job losses during economic fallouts

Amid the all-round disruption caused to the economy by the novel coronavirus outbreak, a concern across the world is the possibility of a loss of jobs. Various governments have unveiled various measures to address such concerns, and one of the most talked-about is Kurzarbeit.

Kurzarbeit Scheme

  • Kurzarbeit is German for “short-work”.
  • The policy provides for a short-time work allowance, called kurzarbeitgeld, which partially compensates for lost earnings during uncertain economic situations.
  • The policy was rolled out during the 2008 economic crisis while its origins date back as far as the early 20th century, before and after World War I.

How it works?

  • When companies face a loss of earnings due to unforeseen economic situations, they often need to cut back on their working hours or send some of their employees’ home.
  • It aims to address workers who are impacted by the loss of income due to shortened work hours during such times.
  • They can apply for short-term work benefits under the scheme, with the government stepping in to pay employees a part of their lost income.

Quantum of payment

  • Payment under Kurzarbeit is calculated on the basis of a net loss of earnings.
  • As per Germany’s Federal Agency for Work, short-time employees generally receive about 60 per cent of the flat-rate net wage.
  • In case there is at least one child in the house of the short-time worker, he/she receives 67 per cent of the flat-rate net wage.


  • This scheme helps the companies retain their employees instead of laying them off, and allows the latter to sustain themselves for a period of up to 12 months.

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

[pib] Employees’ Pension Scheme (Amendment) Scheme, 2020


From UPSC perspective, the following things are important :

Prelims level : EPS Scheme

Mains level : Scope and benefits of EPS

The Union Ministry of Labour & Employment has informed about the total enrollments under EPS.

Employees Pension Scheme (EPS)

  • EPS is a social security scheme that was launched in 1995 and is facilitated by EPFO.
  • The scheme makes provisions for pensions for the employees in the organized sector after retirement at the age of 58 years.
  • Employees who are members of EPFO automatically become eligible for EPS.
  • Both employer and employee contribute 12% of employee’s monthly salary (basic wages plus dearness allowance) to the Employees’ Provident Fund (EPF) scheme.
  • EPF scheme is mandatory for employees who draw a basic wage of Rs. 15,000 per month.
  • Of the employer’s share of 12 %, 8.33 % is diverted towards the EPS.

Features of the 2020 Amendment

  • EPS pensioners will get normal pension even after getting a reduced pension due to commutation.
  • On retirement, if the employee opts for commutation of pension, a portion is paid as a lump sum based on the commutation factor while on the balance the pension begins.
  • In simple terms, commutation means a lump sum payment in lieu of periodic payments of pension.
  • In such a case, the amount of pension will be lower than the amount of pension without any commutation.
  • The amendment seeks to restore the original amount of pension as per the commutation table, after 15 years equal to the same amount as it would have been without commutation.

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

Let’s think afresh about how to govern India’s gig workforce


From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- How to govern India's gig economy?


The gig economy plays to employment patterns in India, where most of the workforce is engaged in “informal” jobs in the “unorganized” sector.

Employment pattern in India

  • Non-contractual employment: A recent study of employment patterns over a 13-year period ended 2017 for the Prime Minister’s Economic Advisory Council finds that non-contractual employment grew by 68 million over the period.
    • And “has been a hero of employment generation growing by about 5% annually“.
    • There were 145 million people in non-contractual employment in 2017-18.
    • Professionals constituted the most rapidly growing occupations, with older, better educated and skilled witnessing higher growth.
  • Unorganised sector growing at much higher rate than organised sector: The study also found that unorganized sector employment grew by 65 million between 2004 and 2017, compared to only 27 million new jobs in the organized sector.
    • What does the asymmetric rate suggests? It suggests that businesses are finding it more convenient to sustain themselves when they are below the radar of the government.
  • Potential for growth of gig economy: As technology and business models take the gig economy across the country and implant it more deeply into the Indian economy, we can expect to see a lot more people find employment through online marketplaces and technology platforms.

Regulation of labour laws and expanding the tax base

  • Social Security Code: In December, the government introduced legislation in Parliament that seeks to consolidate a number of labour laws into a Social Security Code.
    • Who will be covered in the code? The new statute encompasses self-employed professionals, freelancers and platform workers, such as those employed by taxi aggregators and food delivery companies.
  • Widening the tax base: The tax person is not far behind.
    • Recent reports suggest that revenue officials are leaning on platforms and aggregators to get gig workers registered with the goods and services tax (GST) network.
    • Need to reflect on how to govern the gig workforce? While it is just as well that the government is attempting to rationalize labour regulations and expand the country’s tax base, it is important to step back and reflect on how the gig workforce ought to be governed.

The new approach to classification of jobs: Income and volatility

  • Classification on the basis of two fundamental characteristics: If we discard the mental model that has long classified jobs as formal and informal, and look at work afresh, we observe that jobs vary along with two fundamental characteristics:
    • The level of income they generate and-
    • The volatility of this income.
    • Example: A security guard at a company might earn a few thousand rupees a month, but with the assurance of a regular monthly paycheque.
  • More informative way: Instead of the old binary formulation of informal versus formal jobs, it is more informative to see jobs being distributed on a spectrum depending on how much they pay and how volatile the income flows they provide are.
    • Wherever a job lies in this spectrum, the objective of public policy ought to be to ensure a “trimurti”.

Ensuring Trimurti

  • Frist-Providing dignified working conditions: Promoting dignified working conditions include-
    • Ensuring fairness.
    • Respect.
    • Safety.
    • Protection against exploitation and-
    • Arrangements for retirement.
    • Need to ensure the obligation from employers: This means that even as labour laws are rationalized to eliminate outdated and hard-coded regulations, it is necessary to ensure that all employers retain an obligation to promote the dignity of all their employees.
  • Second-Need to lower the barriers: Real wages grow not because the government imposes minimum wages, but when productivity rises.
    • Productivity growth occurs when barriers to trade, investment and travel are lowered.
    • A closed economy cannot be a successful gig economy.
  • Finally-A re-imagined social security system: A re-imagined social security system for the 21st century must tap government, corporate and social contributions for insurance and retirement accounts.
    • Such a multi-contribution system is possible today and the proposed Social Security Code is an opportunity to put in place such a future-proof framework.

How to handle the dispute arising out of the gig economy

  • Start online dispute resolution system: The gig economy is perhaps the best place for India to start its first online automated dispute resolution system.
    • You can’t govern the 21st-century economy with 18th-century technology.


While ensuring the application of the labour code to the gig economy and bringing them in the tax net the government also ensure the conducive environment for the gig economy to flourish and contribute significantly in the growth of the country.



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

World Employment and Social Outlook: Trends 2020


From UPSC perspective, the following things are important :

Prelims level : World Employment and Social Outlook: Trends 2020

Mains level : Unemployment in India

The report World Employment and Social Outlook: Trends 2020 (WESO) was recently released.

About the Report

  • The WESO report is an initiative of the International Labour Organization (ILO).
  • ILO forecasts that unemployment will rise by about 2.5 million this year.
  • The ILO is a UN agency whose mandate is to advance social justice and promote decent work by setting international labour standards.
  • The report analyses key labour market issues, including unemployment, labour underutilization, working poverty, income inequality, labour income share and factors that exclude people from decent work.

Highlights of the report

  • Global unemployment is projected to increase by around 2.5 million in 2020.
  • The number of people unemployed around the world stands at some 188 million.
  • In addition, 165 million people do not have enough paid work, and 120 million have either given up actively searching for work or otherwise lack access to the labour market.
  • In total, more than 470 million people worldwide are affected, the report said.
  • Almost half a billion people are working fewer paid hours than they would like or lack adequate access to paid work.
  • Not enough new jobs are being generated to absorb new entrants to the labour market.

Data on working poverty

  • Currently working poverty (defined as earning less than USD 3.20 per day in purchasing power parity terms) affects more than 630 million workers, or one in five of the global working population.
  • Inequalities related to gender, age and geographical location continue to plague the job market, with the report showing that these factors limit both individual opportunity and economic growth.
  • Some 267 million young people aged 15-24 are not in employment, education or training, and many more endure substandard working condition.

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

[op-ed snap] Reset and reform


From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- Socio-economic upheaval in Indian economy and its consequences for the Indian economy.


With the Indian economy caught in the middle of a socio-economic upheaval, the government needs to make its focus on the economy clear and pronounced.

India in the middle of a socio-economic upheaval

  • Weakening economy: The economy has been weakening for a couple of years now.
  • Social upheaval: The social upheaval is new but its seeds have been fermenting for a while.
  • Consequences of the two: The social and economic sides of an economy are not divorced from each other.
    • Each influences the other and the current quagmire threatens to unleash the worst type of feedback between the two.

Consequences for the employment

  • Most severe consequence due to the interaction between the social and economic sides is unemployment.
  • Rising unemployment disproportionately affects the young.
  • India’s job market: India whose median citizen is in the 30s and which is inducting 10 million new young people to the job market every year.
  • Demographic dividend turning into a curse: This dynamic, popularly hailed as India’s demographic dividend, can rapidly turn into a demographic curse if the employment situation doesn’t improve.

Falling investment rate, increased risk perception

  • Where will the jobs come from? The job creators are entrepreneurs, conglomerates, and multinationals.
    • It is in their nature to take investment risks as long as the returns are high enough.
  • Investment rates below 30: In India, investment rate fell well below 30 per cent a while back.
    • Falling returns: The returns on investment were not compensating entrepreneurs for the risk.
    • The recent social upheaval is only adding to the perceived risk.
  • Wait and see approach: The more investors adopt a “wait-and-see” approach, the worse the job situation will become.

Way forward

  • Structural reforms: The government needs to announce a clear plan and timeline for structural reforms.
  • Prioritising domain competence in staff: The government has to start staffing technical positions by prioritising domain competence and empowering these hires with policy relevance.
  • Maintaining the integrity of institutions: The government need to maintain the integrity of institutions tasked with the regulation of corporations and banks, monetary policy management, data collection/dissemination and law enforcement.
  • Accommodate dissent: The government also needs to desist from trying to drown out protesting voices with state muscle power.


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

[oped of the day] Migration studies need to put in perspective changing patterns of movement


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Indian Diaspora - changing patterns of migration


Migrants have made notable contributions to their countries of origin as well as destination. This is especially true for South Asia. The UN celebrates the International Migrants Day on December 18 every year.

India – Migrants

  • Highest remittances – India has ranked the highest among countries that receive remittances from migrants.
  • States – States such as Kerala have benefited enormously from migrants to countries in the Persian Gulf.

Gaps in understanding

  • There is a need to understand international migration from the country in all its diversity.
  • The distinctive characteristics of migrants from different states of the country, their choice of destinations and the patterns and purposes of migration have to be understood.

International migrants from India

  • Not just Southern – India’s international migrants are not just from the southern states but also come from the north, including from Uttar Pradesh, Rajasthan and Bihar. This is partly due to the demographic dividend of these states. 

State of research on migration from India

  • States – Kerala has conducted a series of eight migration surveys. Tamil Nadu, Goa, Punjab and Gujarat have produced state-level data only once. 
  • Changing – Migration is a changing phenomenon. Understanding its dynamics requires research at adequate intervals. 
  • Limited surveys – state-level surveys have focused only on legal and voluntary cross-border migration.
  • Surveys have focussed on households to understand the emigrants or return migrants. Only last year, a survey in Kerala tried to understand the people intending to migrate.

Beyond labour

  • Migration studies cannot be confined to labour. 
  • Other dimensions of migration – We are yet to study cross-border human trafficking, undocumented migration, small and medium Indian entrepreneurs in different countries, student migration, family migration, left-behind husbands and the challenges faced by migrants in integration.
  • Multidisciplinary understanding – We need to understand migration through the lens of historians, psychologists, sociologists, geographers and legal specialists.
  • Gender – migration patterns are dissimilar between genders. Current research focuses on a small sub-population of woman migrants such as nurses and domestic workers.
  • Indian woman migrants also comprise students, professionals, including scientists, doctors, IT engineers and teachers as well as beauticians, sales associates and hotel workers. 
  • Women are trafficked to different countries in the Gulf for a variety of purposes ranging from domestic work to immoral activities.

Changes in destinations

  • Non-Anglophone – The preference is for non-Anglophone countries despite the integration challenges. 
  • Indian students are moving to China, Japan, Germany and the countries of the former Soviet bloc. There is also a South-South pattern of student migration along the India-Nepal corridor. 
  • India as a destination – India is also a destination for students from African countries. Nurses and teachers from India migrate to African countries such as Zambia, Ethiopia and Eretria.
  • Professionals – Indian professionals are migrating to Southeast Asian countries such as South Korea and Taiwan, and European countries such as Norway, Sweden and Belgium.
  • New issues – We need to study the challenges and problems of living in non-English speaking countries.

Distress migration

  • Such migrants can be victims of human trafficking, workers who do not have proper documents, migrants trapped in a war zone or conflict areas or those who have been involved in workplace place accidents. 
  • Indian migrants are jailed in different countries or cheated by fake recruiting agents.
  • The cases of Indian workers dying in the Gulf countries have been on the rise over the years. 
  • Lack of policies – We lack national- and state-level data on deceased Indian workers. 
  • Issues – There have been reports of Indian workers held captive by pirates in African countries. There have also been reports of human smuggling from Punjab to Greece and Italy.

Ways of communication

  • Social media has become a powerful tool to highlight the plights of migrant workers.
  • Migration studies have not given much thought to increasing the use of social media for migrant welfare.

Steps taken/ to be taken

  • Centres for migration studies can be established in universities and research institutions. 
  • A research programme on ‘International Migration from Kerala’ was inaugurated at the Centre for Development Studies, Thiruvananthapuram.
  • The erstwhile Ministry of Overseas Indian Affairs had set up a research unit on international migration in 2006.
  • Bridge the knowledge gap by replicating the Kerala model of migration surveys in all states. 
  • Frame a comprehensive national migration policy to address the issues faced by migrants.

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

[op-ed snap] Bearing the brunt of slack laws


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Labour regulations - informal sector


A huge fire has engulfed a residential-cum-production unit in a congested part of Delhi, killing over 40 people. It has exposed the precarity of the every-day life of workers in this country. 

Industrial clusters

  • Numerous industrial clusters have mushroomed in the bylanes of residential localities and slums in our big cities.
  • Corruption – This is because of a handful of erring officials of civic agencies.
  • Regulations – also, the non-existent regulation of labour conditions in micro-, small- and medium-sized industrial and commercial establishments is a reason. 
  • Migrants – In these smaller establishments, the workers are mostly migrants, and tend to work long hours for meagre wages. They are crowded into living quarters inside the production unit itself. 
  • Labour laws – the limited coverage of labour laws indicates the lack of state regulation of several kinds of work relations and workplaces.

Out of reach laws

  • Neglected sections – key labour laws in India ignore a large section of workers who are denied the rights and benefits due to less regular work contracts, length of employment, nature of the establishment, size of the workforce, etc. 
  • Only a minuscule section of organised workers have actually been granted rights.
  • Ease of doing business – the dominant discourse on the “ease of business” projects India’s labour laws going against the development of the free market.
  • Labour regulations – The image of protection by the law to organised workers of large industrial establishments is used to project India’s labour laws as cumbersome and “anti-labour”. 
  • Industrial relations – Any regulation or interventionist approaches to industrial relations have become a thing of the past.

Multiple issues

  • Employers’ concerns – Employers’ claims about the lack of labour market flexibility in India are unsustainable.
  • Labour market flexibility in India – The high levels of employment of contract labour in all kinds of industrial and commercial establishments, steady growth of the informal sector, high labour turnover, the pattern of extended overtime by a majority of workers, the growing presence of apprentices and “fixed-term” workers in industrial enterprises, the pattern of deskilling or high-skilled workers entering lower-skill segment jobs, the presence of a weak trade union movement which is unable to prevent retrenchment show extreme flexibility to employers.
  • Informal sector – deregulation of a large number of work relations is evident in the watering down of the provisions of labour inspection, the growing paradigm of self-certification by employers of their compliance with labour laws, and the tweaking of many statutory labour laws on occupational safety standards, work hours, minimum wage, compensation, industrial disputes, etc. by successive governments.

The retreat of the state

  • The enhanced power of employer – exemptions to smaller industrial and commercial establishments from furnishing proof of compliance with statutory labour laws, amendments diluting the authority of the labour inspectorate, have enhanced the power of employers across the board.
  • “Private power” of employers – to unilaterally fix wages, extract overtime, manage leaves, determine compensation, etc. has increased with the withdrawal of the state from the regulation of labour-capital relations.
  • State’s retreat – from an Anaj Mandi in North Delhi to a real-estate construction site in Mumbai to a garment factory in Tamil Nadu, to a brick kiln in Bihar, the lack of state is visible.


  • Challenges with liberal policies – self-certification system, weakening of the labour inspectorate, dilution of labour laws do not balance against the intense exploitation of labour by employers.
  • To stay competitive, employers are consistently pushing down labour costs by circumventing labour rights.

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

[oped of the day] The broken promise of decent and fair wages


From UPSC perspective, the following things are important :

Prelims level : Wage Code

Mains level : Analysis of Wage Code Act and its rules


The rules to the Labour Code on Wages Act 2019 were proposed.

Code on Wages

    • It is expected that the draft rules to the Act would be a game-changer for the workers in the informal sector.
    • Informal workers account for 93% of the total working population and contribute to over 60% of India’s GDP.
    • The law proposes to increase income capacity and the purchasing power of the informal workers.
    • Raptakos case – Supreme Court of India’s judgement in the ‘Raptakos’ case (1991) advocated the concept and the right of a living wage.


    • Starvation wages continue – The proposed framework to determine wage will continue pushing ‘starvation wages’ in India.
    • Floor wage – this would mean that “starvation wages” which currently guarantees just ₹178 per day, will continue to exist.
    • Consumer Expenditure Survey shows the average family expenditure in rural areas to be ₹83 per day and in urban areas as ₹134. These figures show how workers will continue to live in exploitative and marginalised conditions.
    • Supreme Court judgement – This is despite ‘Need-Based Minimum Wage’ being a Supreme Court jurisprudence. 

Good case study

    • The governments of Delhi and Kerala have managed to achieve a living wage jurisprudence in recent years.
    • They have also set the highest living wage in India (₹14,842 a month in Delhi and ₹600 a day in Kerala).

Challenges with the new reform

    • Archaic – The concept and intention of floor wage in the draft rules reiterate archaic principles echoed by the Constitutional Bench of the Supreme Court.
    • Oversupply – labour market preys on the excess availability of workers for whom living a precarious life is their permanent mode of existence. 
    • A floor-level wage would only encourage and exacerbate this archaic practice and promote forced labour. 
    • Deduction of wages – Another concern with the law is the provision of an arbitrary deduction of wages based on performance, damage or loss, advances, etc.
    • Social inequalities – In India, employers, due to their higher social status, continue to exploit labour with impunity.
    • Inspection – the draft rules propose another ad-hoc and unclear mechanism called the “inspection scheme”.
    • No mechanism – the draft rules do not clarify the governance and institutional structure for the “labour inspection system” in the law.
    • The ambiguity of rules – in the absence of clarity in the draft rules, workers will not be able to demand even basic work rights in the fear of wage deductions and will continue to be oppressed and marginalised.


    • The International Labour Organisation’s Labour Inspection Convention of 1947 (Convention C081) has been ratified by India. It provides for a well-resourced and independent inspectorate that allows thorough inspections and free access to workplaces. 
    • The Labour Code on Wages Act 2019 and the draft rules have failed the lives and aspirations of over 50 crore informal workers in India.
    • Working people are a national asset; undermining their well-being should be considered the biggest anti-national act.


Wage Code Bill

Proposed wage code bill: Significance & issues

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

The Industrial Relations Code Bill, 2019


From UPSC perspective, the following things are important :

Prelims level : The Industrial Relations Code Bill, 2019

Mains level : Significance of the Bill

The Union Cabinet has approved The Industrial Relations Code Bill, 2019.

The Industrial Relations Code Bill, 2019

  • It proposes to amalgamate
  1. The Trade Unions Act, 1926,
  2. The Industrial Employment (Standing Orders) Act, 1946, and
  3. The Industrial Disputes Act, 1947.
  • This is the third Code in the government’s proposed codification of central labour laws into four Codes.

Importance of the Bill

  • The most important aspect of the Bill is that it presents the legal framework for ushering in the concept of ‘fixed-term employment’ through contract workers on a pan-India basis.
  • Currently, companies hire contract workers through contractors.
  • With the introduction of fixed-term employment, they will be able to hire workers directly under a fixed-term contract, with the flexibility to tweak the length of the contract based on the seasonality of industry.
  • These workers will be treated on a par with regular workers during the tenure of the contract.
  • The move to include it in a central law will help in wider reach, and states are expected to follow similar applicability.

Changes in the Bill

  • The threshold required for government permission for retrenchment has been kept unchanged at 100 employees, as against the proposal for 300 employees in an earlier draft of the Bill, which was opposed by trade unions.
  • Instead, the government has now provided flexibility for changing the threshold through notification.
  • The rigidity of labour laws about laying off labour has often been cited by industry as the main reason limiting scalability and employment generation.
  • At present, any company having 100 workers or more has to seek government approval for retrenchment.
  • The provision of fixed-term employment, which helps in the flow of social security benefits to all workers along with making it easier for companies to hire and fire, in The Industrial Relations Code Bill.

Fixed Term Employment Workman

  • Earlier the government had included the category of ‘Fixed Term Employment Workman’ for all sectors in the Industrial Employment (Standing Orders) Act, 1946.
  • This was only applicable to ‘central sphere’ establishments, and the states did not follow suit.
  • Finance Minister saif that workers under a fixed-term contract would be taken up depending upon the seasonality of the industry, but would be treated on a par with regular workers.

Criticisms of the bill

  • The unclear provision regarding retrenchment would lead to uncertainty, and discretionary behaviour during implementation by the central or state government.
  • The moment the law will provide flexibility for the applicability, it leaves the matter to the discretion to the appropriate government (states or Centre). Then the clause can be misused.
  • Any discretion in law leads to uncertainty, lack of clarity, discriminatory implementation, and provides scope for unnecessary usage.
  • The government should be clear whether to increase the threshold or retain the threshold and face the consequences.
  • Also, fixed-term employment needs to be introduced with adequate safeguards, otherwise it runs the risk of encouraging conversion of permanent employment into fixed-term employment.

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

Explained: Why is it necessary to fix a minimum wage?


From UPSC perspective, the following things are important :

Prelims level : The Code on Wages, 2019

Mains level : Minimum Wages

The Ministry of Labour and Employment on November 1 published the draft rules for implementing the provisions and sought comments from stakeholders until Dec 1.

The Code on Wages, 2019

  • The code seeks to regulate wages and bonuses for all workers employed by any industry, trade, business or manufacturer.
  • The Code replaces four laws — the Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976.
  • Following the consultation, the Centre will notify the rules that will create the mechanisms to fix a floor wage that would then undergird the minimum wages for different categories of workers — unskilled, semi-skilled, skilled and highly skilled — that the States and Central government would have to set and enforce.

Why need minimum wages?

  • Minimum wages are accepted globally to be a vital means to both combating poverty and, equally crucially, ensuring the vibrancy of any economy.
  • In the aftermath of the 2008 global financial crisis, the purchasing power worldwide got eroded.
  • Thus the regular adjustment of wages, in consultation with the social partners is a means of reducing inequality, increasing demand and contributing to economic stability.

Why is the Code significant?

  • The Code acknowledges that the aim in setting the floor wage is to ensure “minimum living standards” for workers and the draft rules incorporate criteria declared in a landmark judgment of the Supreme Court in 1992.
  • These include:
  1. Net calorific needs for a working class family (defined as the earning worker, spouse and two children or the equivalent of three adult consumption units) set at 2,700 calories per day per consumption unit,
  2. Annual clothing requirements at 66 metres per family,
  3. House rent expenses assumed at 10% of food and clothing expenditure, as well as expenses on children’s education, medical needs, recreation and contingencies.
  • The rules, similarly, cover almost the entire gamut of wage-related norms including the number of hours of work that would constitute a normal working day time interval for revision of dearness allowance, night shifts and overtime and criteria for making deductions.
  • A separate chapter of the draft rules also deals with the payment of bonus while another lays down the guidelines for the formation of the Central Advisory Board as well as its functioning.

How will it impact the economy?

  • A lot will depend on the final floor wage or wages (there could be different floor wages for different geographical areas) that the Centre will choose.
  • The Labour Ministry had in February this year recommended that a “need based national minimum wage for India” ought to be fixed at ₹375 per day (₹9,750 per month).
  • Additionally, the committee had mooted payment of a city compensatory allowance averaging up to ₹55 per day for urban workers.
  • Earlier, in 2015, the Seventh Central Pay Commission had recommended setting the minimum pay for government employees at ₹18,000 per month.
  • Such a statutory national minimum wage would have multiple impacts including helping lift wage levels and reducing wage inequality, thus furthering inclusive growth, according to the survey.
  • For India to reap the much-touted ‘demographic dividend’, robust wage expansion would ultimately be essential to help buoy consumption-led economic growth.

Way forward

  • Trade unions have voiced their reservations with multiple aspects of the Code and plan to submit detailed feedback.
  • The points of contention include the nine-hour working day definition, a lack of clarity in the rules on scope for upgradation of workers’ skill category and the lack of representation for trade unions in the wage fixation committee.
  • The ultimate success of the Code will be determined by the extent to which the minimum wage set is both fair and actually implemented so as to benefit the millions of workers in the unorganised sectors of the economy.

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

Centre gets responses to draft Social Security Code


From UPSC perspective, the following things are important :

Prelims level : Social Security Code

Mains level : Salient features of the draft Social Security Code

  • The draft code on social security, which subsumes eight existing laws covering provident fund, maternity benefits and pension, is being further worked upon after a recent round of public consultations.

Draft Social Security Code

Here are the five key things in the draft code:

1) Insurance, PF, life cover for unorganized sector employees:

  • Bulk of India’s labour force is in informal sector and a move looks forward looking but most of key initiatives it suggest may be the decision of the states with little contribution from the centre.
  • There may be unorganized sector social security boards at the centre and state levels.
  • The draft code says the “Central Government shall formulate and notify, from time to time, suitable welfare schemes for unorganised workers on matter relating to life and disability cover; health and maternity benefits; old age protection; and any other benefit as may be determined by the central government”.
  • While framing of schemes, the draft says the states may also formulate and notify suitable initiatives for unorganized workers, including schemes relating to provident fund, employment injury benefit, housing, educational scheme for their children, old age and funeral assistance.

2) Corporatization of EPFO and ESIC:

  • The pension, insurance and retirement saving bodies including EPFO and ESIC will be body corporate.
  • The world body corporate has been added in the draft and may bring in a departure from the current autonomous body status of such organization.
  • The draft also talks about appointment of chief executive officers (CEOs) in these organization indicating that the labour minister, labour secretary, the central PF commissioner and Director General of ESIC may not be by default the head of such organizations.
  • It means the EPFO may become a more structured national body with its entire Rs. 11 trillion corpus under the responsibility of a central government-appointed chairman.
  • Currently EPFO is headed by the labour minister chaired central board of trustees.
  • The Central Government shall also appoint a Financial Advisor and Chief Accounts Officer to assist the Chief Executive Officer in the discharge of his duties draft code said.

3) Benefits for Gig workers:

  • Millions of gig workforce in India, often referred as lonely in the workplace, may soon get life and disability insurance, health and maternity benefits among others as the union government is formulating a labour code that propose such provisions.
  • As per the draft social security code, the Central Government may formulate and notify suitable social security schemes for gig workers and platform workers” and such schemes would encompass issues like “life and disability cover”, “health and maternity benefits, old age protection” and “any other benefit as may be determined by the Central Government”.
  • Though the exact number of gig workers are unknown as they are still figuring out whether they are formal workers or informal workers or independent entrepreneurs, a 2017 study by consulting firm EY has said that nearly one out four gig workers in the world are from India.

4) Maternity Benefit:

  • The draft says subject to the other provisions of this Code, every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence.
  • That is to say, the period immediately proceeds the day of her delivery, and any period immediately following that day.
  • For the purposes of this sub-section, ―the average daily wage means the average of the woman’s wages payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity.
  • This will be subject to the minimum rate of wage fixed or revised under the Code on Wages, 2019.

5) Existing labour laws that the code will merge:

The Code on Social Security, 2019 once in place will merge eight exiting labour laws including Employees’ Compensation Act, 1923; Employees‘ State Insurance Act, 1948, Employees‘ Provident Funds and Miscellaneous Provisions Act, 1952; Maternity Benefit Act, 1961; Payment of Gratuity Act, 1972; Cine Workers Welfare Fund Act, 1981; Building and Other Construction Workers Cess Act, 1996 and Unorganized Workers‘ Social Security Act, 2008.

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

[op-ed snap] The future of work


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : New economic trends - Employment


Karnataka government will work towards framing guidelines for workers of digital platforms like Uber, Ola, Zomato, Swiggy and UrbanClap. The aim is to ensure all relevant labour benefits for those working in the ‘gig economy’. 

Labour guidelines

    • Karnataka government is following the tone set by the Centre, which proposed a new draft code on social security. 
    • Moves to bring digital labour platforms within the purview of new or existing employment and labour regulations have been missing. 
    • The Karnataka government’s move to add benefits can provide a degree of public welfare assistance to a significant and growing workforce in India.

Role of government

    • The government has the responsibility of ensuring social stability while not creating hurdles for the businesses. 
    • A question remains open — whether Uber drivers are full-time employees of Uber or freelancers.
    • The Ministry’s bid to provide insurance and job security can emerge with direct acknowledgement of the role played by platforms in the city job market.
    • It cannot be achieved by curbing asset-light models or by regulating labour.

Platforms – Employment

    • Platforms provide work to the growing demographic of youth in the country.
    • The manufacturing sector in India is unable to provide employment opportunities to the youth. 
    • There is a mismatch between education and jobs skills in the market. 
    • Governments have also been unable to create viable public work schemes in urban areas for those continuously migrating into cities and towns. 
    • Private tech has been able to do this and the government is aware of its potential.

Role of platforms

    • MoUs signed between platform companies and various State and Central Ministries over the years show that governments have actively invited companies to create work, entrepreneurial opportunities and skill development. 
    • For example, Uber partnered with Ayushman Bharat to facilitate free healthcare for drivers and delivery partners. UrbanClap partnered with the National Urban Livelihoods Mission to generate jobs with minimum assured monthly wages for the urban poor. 
    • In cases of informal jobs where it was difficult to identify workers for whom protection was to be given, platforms became vehicles.

Public Utilities

    • The ecosystem of public policy, platform work, and the government together can suggest an urban ‘Jobs for All’, a financialised employment guarantee scheme. 
    • The work created by these companies could easily be regulated as public goods because it creates mobility and facilitates the movement of goods. 
    • An increasing number of these jobs has been created through incentivised demand using cashback, coupons, low fares, and even free services rather than through natural demand. 
    • Platforms have created public utilities that may not have been needed before via low-skilled and poor quality work, but it is work that brings in some earnings.
    • They have given urban workers a financialised, self-driven, optional economic safety net of ‘having a job, having a gig’.

What it means for the state of employment

    • The ability of labour regulation to push companies to deliver full formal employment in a financialised world of work seems poor. 
    • Platform companies rely on city markets for their workers to populate the platform and to turn a profit just as much as governments look to platforms to generate work opportunities. 
    • The Karnataka Social Welfare Department signed an MoU with Uber last year to create work opportunities for Scheduled Caste and Scheduled Tribe youth.


It could herald a time where platforms can be asked to perform more public functions like implementing a minimum wage.

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

The Occupational safety, health and working conditions code, 2019


From UPSC perspective, the following things are important :

Prelims level : Provisions of the code

Mains level : Labour reforms in India

  • The Occupational Safety, Health and Working Conditions Code, 2019 introduced in Lok Sabha by the Minister of Labour and Employment is now open for suggestions.

About the Code

  • The Occupational Safety, Health and Working Conditions Code, 2019 was introduced in Lok Sabha by the Minister of Labour and Employment on July 23, 2019.
  • The Code repeals and replaces 13 labour laws relating to safety, health and working conditions. These include the Factories Act, 1948, the Mines Act, 1952, and the Contract Labour (Regulation and Abolition) Act, 1970.
  • The Code applies to establishments employing at least 10 workers, and to all mines and docks.
  • It does not apply to apprentices.
  • Further, it makes special provisions for certain types of establishments and classes of employees, such as factories, mines, and building and construction workers.

Various provisions of the Code

Relevant authorities

  • All establishments covered by the Code must be registered with registering officers.
  • Further, Inspector-cum-facilitators may inquire into accidents, and conduct inspections of establishments.
  • Both these authorities are appointed by the central or state government.
  • Additionally, the government may require certain establishments to set up safety committees comprising representatives of employers and workers.

Advisory Bodies

  • The central and state governments will set up Occupational Safety and Health Advisory Boards at the national and state level, respectively.
  • These Boards will advise the central and state governments on the standards, rules, and regulations to be framed under the Code.

Duties of employers

  • The Code specifies several duties of employers.
  • These include: (i) providing a workplace that is free from hazards that may cause injury or diseases, and (ii) providing free annual health examinations to employees, as prescribed.
  • In case of an accident at the workplace that leads to death or serious bodily injury of an employee, the employer must inform the relevant authorities.

Rights and duties of employees

  • Duties of employees under the Code include:
  • (i) Taking care of their own health and safety, (ii) complying with the specified safety and health standards, and (iii) reporting unsafe situations to the inspector.
  • Every employee will have the right to obtain from the employer information related to safety and health standards.

Working Hours

  • Work hours for different classes of establishment and employees will be provided as per the rules prescribed by the central or state government.
  • For overtime work, the worker must be paid twice the rate of daily wages.
  • Female workers, with their consent, may work past 7pm and before 6am, if approved by the central or state government.


  • No employee may work for more than six days a week.
  • However, exceptions may be provided for motor transport workers.
  • Workers must receive paid annual leave for at least one in 20 days of the period spent on duty.
  • For sales promotion employees medical leave must be provided for at least one-eighteenth of the period of service.
  • During medical leave, the worker must be paid half his daily wages.

Working conditions and welfare facilities

  • The employer is required to provide a hygienic work environment with ventilation, comfortable temperature and humidity, sufficient space, clean drinking water, and latrine and urinal accommodations.
  • Other welfare facilities may be provided as per standards prescribed by the central government.
  • These facilities may include separate bathing places and locker rooms for male, female and transgender employees, canteens, first aid boxes, and creches.

Offences and penalties

  • Under the Code, an offence that leads to the death of an employee will be punishable with imprisonment of up to two years, or a fine up to five lakh rupees, or both.
  • Further, courts may direct that at least 50% of such fine be given as compensation to the heirs of the victim.
  • For any other violation where the penalty is not specified, the employer will be penalized with a fine between two and three lakh rupees.
  • If an employee violates provisions of the Code, he will be subject to a fine of up to Rs 10,000.

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

India’s labour productivity


From UPSC perspective, the following things are important :

Prelims level : Labour Productivity

Mains level : Labour Productivity in India

  • An analysis done by India Ratings and Research of Annual Survey of Industries data on India’s labour productivity growth in the organised manufacturing sector shows a disappointing trend.

Falling labour productivity

  • During the high economic growth phase between 2004 and 2008 just before the global financial crisis hit India’s labour productivity grew by over 14 per cent every year.
  • But between financial years of 2011 and 2015, this rate fell to just half of that (7.4 per cent) and continued its deceleration to just 3.7 per cent between financial years of 2016 and 2018.

What is labour productivity and why does it matter?

  • Broadly speaking, productivity is a measure of the efficiency with which resources, both human and material, are converted into goods and services.
  • Besides land and capital, labour productivity plays a crucial role in deciding the rate of economic growth.
  • Indeed, India Ratings report points out that globally labour productivity growth alone accounted for about two-thirds of the GDP growth during FY01-FY10, leaving only one-third to labour/employment growth.

Reasons for decline

  • Productivity is the most powerful engine of driving and sustaining manufacturing growth, and making the sector globally competitive.
  • Labour productivity is crucially dependent on businesses investing in knowledge and innovation even as the governments bring about structural reforms that enable such investments to bear fruit.
  • A lot needs to be done quickly both on the policy front as well as companies level.

What else does the study reveal?

There are two other crucial results from the analysis:

  • One, that between fiscal years 2001 and 2018, the capital intensity — that is, fixed capital used per worker — in India’s organised manufacturing has been rising.
  • Two, notwithstanding this rise in capital intensity, the output intensity — that is, the value of output per fixed capital — has actually declined over the same period.
  • In other words, while more and more capital is being used per unit of labour, it is not yielding commensurate level of output growth.

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

Tracking employment in India


From UPSC perspective, the following things are important :

Prelims level : Categorisation of Employment, NSSO

Mains level : Unemployment in India


  • Ever since the results of the Periodic Labour Force Survey (PLFS) 2017-18 became public — they showed that unemployment in India was at a 45-year high.
  • Since then there has been a vigorous public debate about the true state of unemployment in the country.

A testimony on Unemployment

  • A new study by JNU professors has highlighted the broad trends for employment in India between 2004 and 2018.
  • A key feature of this study is that instead of focusing on unemployment, it focuses only on the “employment” data.
  • It does so by looking at three comparable surveys conducted by the NSSO the Employment-Unemployment Surveys (EUS) of 2004-05 and 2011-12, and the PLFS of 2017-18.

Categorization of Employment

  • The NSSO surveys divide the entire population into three categories.
  • Category 1 consists of people who were involved in economic activity (or work) during the reference period of the survey.
  • These individuals are labelled as “Employed” — and Category 1 can be subdivided into categories such as self-employed, salaried employees, and casual labourers.
  • Category 2 consists of people who were not engaged in any economic activity during the reference period of the survey, but were looking for work if work was available. These individuals are labelled as “Unemployed”.
  • Taken together, categories 1 and 2 form the country’s “labour force”.
  • Category 3 constitutes people who are neither engaged in work nor available for it.
  • This category — labelled as “Not in the labour force” — would have a large number of people, including those who have retired, those studying, those unable to work due to disability, and those attending “only” to domestic duties.
  • The new study focused on the level and trends of the ‘Employed’ — that is, Category 1.

Key Findings of the Study

  • On the whole, the study found that the total employment in the country grew by 4.5 crore in the 13 years between EUS 2004-05 and PLFS 2017-18.
  • It represents a growth of just 0.8 per cent — less than half the rate at which the overall population grew, which was 1.7 per cent.

Urban-rural spread of employment

  • Of the 4.5 crore increase in employment, 4.2 crore happened in the urban areas while rural employment either contracted or was stagnant between 2011 and 2017.

Male-female spread of employment

  • Over the 13 years, male employment grew by 6 crore but female employment fell by 1.5 crore.
  • In other words, while there were 11.15 crore women with jobs in 2004, only 9.67 crores were employed 13 years later.
  • Women’s share in employment has fallen from an already low level of 27.08% in 2004 to 21.17 per cent in 2017.

Youth Employment

  • India is one of the world’s youngest nations, but employment data according to age groups shows that youth employment (those between the ages of 15 and 24) has fallen from 8.14 crore in 2004 to 5.34 crore in 2017.
  • However, employment in the 25-59 age group and the 60 years and above group has gone up.
  • The sustained schooling reforms seem to have shown their impact in the employment of children below 14 years of age reducing from 61 lakh in 2004 to 27 lakh in 2011, and just 11 lakh in 2017.

Employment by education level

  • The emerging economy appears to be leaving behind the illiterates and those with incomplete primary education.
  • Employment in this category has gone down from 20.08 crore in 2004 to 14.2 crore in 2017, and their share in those employed has gone down from 48.77 per cent in 2004 to 31.09 per cent in 2017.
  • Employment has risen for all other categories of education from primary, secondary, to postgraduate and above.

Organised sector

  • The organised sector represents firms that are registered with regulatory authorities and are bound by a variety of labour laws
  • Here the rate of employment growth has been the fastest, and its share in the total employed has risen from 8.9 per cent in 2004 to 14 per cent in 2017.The sector, too, has grown.
  • In fact, while its rate of growth has been slower, its overall share in the economy has gone up from 37.1 per cent in 2004 to 47.7 per cent in 2017.
  • However, the pace of growth of the unorganised sector has moderated since 2011.
  • Both these sectors have grown at the expense of the agri-cropping sector, where employment has fallen from 21.9 per cent in 2004 to 17.4 per cent in 2017.
  • In essence, the results show that those who are poor, illiterate, and unskilled are increasingly losing out on jobs.

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

Population Pyramid


From UPSC perspective, the following things are important :

Prelims level : Population Pyramid

Mains level : India's demogrphic dividend


  • Population pyramids, which show the age and sex distribution of any country, help us understand how demographic transition plays out and speculate about its medium-term economic prospects.
  • The newscard provides a look at the pyramids for India and China and their implications.

Reading the Pyramid

  • Generally, males are shown on the left-hand side and females on the right.
  • Also, the convention is that age distribution is done in cohorts of five years, with the age rising as we go vertically upwards.
  • The pyramid shape changes over time due to births, deaths and net migration. A quick look above shows that India’s pyramid, like the actual pyramids in Egypt, is bottom heavy.
  • That is, the Indian population has a larger proportion of children, teenagers and young adults compared to China’s.
  • We can also observe that except for the oldest groups, India seems to have more males than females for every cohort.

What do they say about demographics?

  • India’s population for the age cohorts of 0-4, 5-9, 10-14 and 15-19 is roughly equal, whereas the numbers for older groups become progressively smaller.
  • This means that the country’s younger age groups have stopped growing in numbers now and are likely to shrink slightly soon.
  • This, however, does not mean that India’s population will also start shrinking soon—far from it.
  • On the other hand, China’s largest cohort is in its late 40s, although it is more gender balanced than its younger cohorts, suggesting that sex-selective abortions are likely to have taken off in the last few decades.

What does this have to do with economic growth?

  • If we take the 25-65 age group, India currently has around 650 million people and China 830 million.
  • By 2040, India is likely to reach 900 million, whereas China will have around 730 million.
  • In other words, India will go from having 180 million less working-age people than China today to about 170 million more—a net gain of a third of a billion in 20 years.

Achieving demographic dividend

  • Just having people in the working age is not enough. How many are in the labour force and their productivity are important.
  • People pursuing education and home-makers are mostly the ones to drop out of the labour force, women more so.
  • But after a fall in female labour force participation for 10 years or so, there are early signs of improvement.
  • On productivity, Indians about to enter the 25+ age group have almost universal literacy across both the genders and many are “digital natives” even in lower income groups.

Implications for India

  • The Indian state has to invest more, and efficiently, in human capital and infrastructure.
  • For the former, investments in health and sanitation have to be sustained and more PPP models such as vouchers and charter schools in basic education have to be explored so that tax outlays result in higher outcomes.
  • For the latter, a bigger push for affordable rental housing in cities has to be considered, along with more investments in rail connectivity.

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

[op-ed snap] Code Red for labour


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Labor reforms and proposed labor codes


Centre proposed to replace 44 labour laws with four codes.

Problems with the codes

  1. These codes are antithetical to the very idea of statutory protection of labour and dignified standard of living for workers
  2. Original labour laws were enacted after decades of struggle and were meant to ensure certain dignity to the working-class people
  3. Ministry of Labour’s proposal to fix the national minimum floor wage at ₹178 is devoid of any defined criteria or method of estimation.
    1. This may lead to a race to the bottom by States, to attract capital and investments. 
    2. This is being called ‘starvation wage’ as the Ministry’s own committee recommended ₹375 as the minimum.
  4. The four codes exclude over 95% of the workforce employed in informal units and small enterprises, who are in greater need of legal safeguards.
  5. There is no clarity on who constitutes an ‘employer’, an ‘employee’ or an ‘enterprise’, giving the owner greater discretion to interpret the provisions.
  6. To minimise wage bills and compliance requirements, it is proposed that ‘apprentices’ be no longer considered employees.
    1. Evidence indicates that apprentices are made to do jobs of contractual as well as permanent employees.
  7. The code has a provision on “employees below fifteen years of age”, which can be construed as legalisation of child labour. 
  8. The code on wages legitimises and promotes further contractualisation of labour, instead of abolishing it.
  9. Wage code brings back the provision of “recoverable advances”, a system linked to coercive and bonded labour by the Supreme Court. The distressed and vulnerable migrant labourers could be bonded to work through advance payments.
  10. The 8-hour workday shift has been done away with, and multiple provisions of increased overtime have been inserted. 
  11. The code also gives ample alibis to employers to evade bonus payments.
  12. Non-payment of wages will now not be a criminal offence and penalties in case of non-compliance have been reduced.
  13. Code on industrial relations is replete with restrictions on forming or registering unions, calling a strike and seeking legal redressal for workers.

Proposed laws resemble ‘employer codes’ rather than ‘labour laws’.

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

[op-ed snap] The seriousness of the problem of unemployment in India


From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Addressing Unemployment


Indian economy is slowing. This is largely a result of weakening demand, mostly in rural areas. Slowing demand has contributed to the declining availability of jobs, where jobless growth is already a problem.

The seriousness of the problem

  1. Employment-unemployment surveys of National Sample Survey Office (NSSO): latest Periodic Labour Force Survey (PLFS) tells us the following total number of workers in the economy was 472.5 million in 2011-12, which fell to 457 million in 2017-18. The absolute number of workers declined by 15.5 million over six years.
    1. this is the first time in the history of employment measurement by the NSSO that the total number of workers declined in absolute terms.
  2. 16-million decline in the number of workers reported by the Labour Bureau’s Annual Employment Surveys of the fourth and fifth rounds

Reasons for unemployment

  1. fall in the number of workers in agriculture and a sharp fall in the absolute number of female workers
    1. Roughly 37 million workers left agriculture in the last six years.
    2. At the same time, 25 million women workers were out of the workforce.
  2. crisis in agriculture in the last six years has only accelerated the process
  3. The trend of declining women workers has absolutely no parallel in any developing or developed country of similar per capita income. In most East Asian countries, the period of rapid growth was also accompanied by a rising number of women workers.


  1. Number of people aged 25-64 years increased by around 47 million during the six-year period
  2. The economy should have created at least 83 million jobs between 2012 and 2018 to accommodate those who have entered the labour force and those forced out of agriculture. But it witnessed a decline in the number of workers by 15.5 million


Stagnant wages and jobless growth are not just indicators of a weakening economy, but also a recipe for political instability and a crisis in the countryside. The government should acknowledge the extent of the problem and then try to address it.

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

[op-ed snap] Sucking up surplus


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : SEBI's autonomy


The Centre’s decision to clip the wings of the Securities and Exchange Board of India has not gone down too well with its members. Yet, the Centre is refusing to budge. In a letter dated July 10, SEBI Chairman Ajay Tyagi said the Centre’s decision to suck out SEBI’s surplus funds will affect its autonomy.


  • As part of the Finance Bill introduced in Parliament, the Centre had proposed amendments to the Securities and Exchange Board of India Act, 1992 that were seen as affecting SEBI’s financial autonomy.
  • To be specific, the amendments required that after 25% of its surplus cash in any year is transferred to its reserve fund, SEBI will have to transfer the remaining 75% to the government.
  • On Friday, the government rejected the plea from SEBI’s officials asking the government to reconsider its decision, thus paving the way for further conflict.
  • Prima facie, there seems to be very little rationale in the government’s decision to confiscate funds from the chief markets regulator.


  • For one, it is highly unlikely that the quantum of funds that the government is likely to receive from SEBI will make much of a difference to the government’s overall fiscal situation.
  • So the amendment to the SEBI Act seems to be clearly motivated by the desire to increase control over the regulator rather than by financial considerations.
  • This is particularly so given that the recent amendments require SEBI to seek approval from the government to go ahead with its capital expenditure plans.
  • A regulatory agency that is at the government’s mercy to run its financial and administrative operations cannot be expected to be independent.
  • Further, the lack of financial autonomy can affect SEBI’s plans to improve the quality of its operations by investing in new technologies and other requirements to upgrade market infrastructure.

Long term impacts

  • This can affect the health of India’s financial markets in the long run. In the larger picture, this is not the first time that the government at the Centre has gone after independent agencies.
  • The Reserve Bank of India and the National Sample Survey Office have come under pressure in recent months, and the latest move on SEBI adds to this worrisome trend of independent agencies being subordinated by the government.
  • The Centre perhaps believes it can do a better job of regulating the economy by consolidating all existing powers under the Finance Ministry.
  • But such centralisation of powers will be risky.


Regulatory agencies such as SEBI need to be given full powers over their assets and be made accountable to Parliament. Stripping them of their powers by subsuming them under the wings of the government will affect their credibility.

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

[op-ed snap] Tread with caution: on labour laws


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Labour Reforms


As part of its commitment to simplify and consolidate labour rules and laws under four codes, the Union Cabinet has cleared the Occupational, Safety, Health and Working Conditions Code, a week after it approved the Code on Wages Bill.


The latter seeks to include more workers under the purview of minimum wages and proposes a statutory national minimum wage for different geographic regions, to ensure that States will not fix minimum wages below those set by the Centre. These steps should be welcomed.

Labour safety

The Code on labour safety and working conditions include regular and mandatory medical examinations for workers, issuing of appointment letters, and framing of rules on women working night shifts.

Other Codes

  • Other codes that await Cabinet approval include the Code on Industrial Relations and the Code on Social Security.
  • Unlike these pending bills, especially the one related to industrial relations that will be scrutinised by labour unions for any changes to worker rights and rules on hiring and dismissal and contract jobs, the two that have been passed should be easier to build a consensus on, in Parliament and in the public sphere.


  • Organised unions have vociferously opposed changes proposed in the Industrial Relations code, especially the proviso to increase the limit for prior government permission for lay-off, retrenchment and closure from 100 workers as it is currently, to 300.
  • The Economic Survey highlighted the effect of labour reforms in Rajasthan, suggesting that the growth rates of firms employing more than 100 workers increased at a higher rate than the rest of the country after labour reforms.
  • But worker organisations claim that the implementation of such stringent labour laws in most States is generally lax.
  • Clearly, a cross-State analysis of labour movement and increase in employment should give a better picture of the impact of these rules.

Way Forward

  • Simplification and consolidation of labour laws apart, the government must focus on the key issue of job creation.
  • The Periodic Labour Force Survey that was finally made public in late May clearly pointed to the dire situation in job creation in recent years.
  • While the proportion of workers in regular employment has increased, unemployment has reached a 45-year high.
  • The worker participation rate has also declined between surveys held in 2011-12 and 2017-18.
  • The government’s response to this question has either been denial, as was evident after the draft PLFS report was leaked last year, or silence, after it was finally released.
  • In such a situation, the government should be better off building a broader consensus on any major rule changes to existing worker rights rather than rushing through them for the sake of simplification.
  • The consolidated code bills should be thoroughly discussed in Parliament and also with labour unions before being enacted.

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

Centre to streamline labour laws into set of 4 codes


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Minimum Wages

  • The government in its second term would streamline several existing labour laws into a set of four labour codes in a move aimed at reducing disputes.

Set of four labour laws

  • The government is proposing to streamline multiple labour laws into a set of four labour codes.
  • The government wants to concise 44 labour laws into four broad codes on wages, social security, industrial safety and welfare, and industrial relations.
  • This will ensure that process of registration and filing of returns will get standardised and streamlined.
  • The Bill will replace the current Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.
  • It provides that the Central government will fix minimum wages for certain sectors, including railways and mines, while the states would be free to set minimum wages for another category of employment.
  • The code also provides for setting up of a national minimum wage.
  • The Central government can set a separate minimum wage for different regions or states.
  • The draft law also says that the minimum wage would be revised every five years.

Beginning with wages

  • The first of these labour codes– Wage Code Bill –will likely be enacted in the ongoing budget session, paving the way for benchmarking minimum wage for different regions.

For more reading, navigate to:

New Code on Wages Bill

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

New Code on Wages Bill


From UPSC perspective, the following things are important :

Prelims level : Minimum Wages. MGNREGS

Mains level : Read the attached story

New Code on Wages Bill

  • The Union Cabinet has cleared the new version of Code on Wages Bill, which seeks to define the norms for fixing minimum wages.
  • It will be applicable to workers of organised and unorganised sectors, except government employees and MNREGA workers.
  • It will amalgamate the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

New determining factors of wages

  • As per the Bill, minimum wages will be linked only to factors such as skills and geographical regions.
  • At present, minimum wages are fixed on the basis of categories such as skilled, unskilled, semi-skilled, high skilled, geographical regions, and nature of work such as mining.
  • These are applicable for 45 scheduled employments in the central sphere and 1709 scheduled employments in states.
  • This is expected to effectively reduce the number of minimum wage rates across the country to 300 from about 2,500 minimum wage rates at present.

Floor Wage

  • A National Floor Level Minimum Wage will be set by the Centre to be revised every five years, while states will fix minimum wages for their regions, which cannot be lower than the floor wage.
  • The current floor wage, which was fixed in 2017, is at Rs 176 a day, but some states have minimum wages lower than it such as Andhra Pradesh (Rs 69) and Telangana (Rs 69).


  • An effective minimum wage policy is a potential tool not only for the protection of low paid workers but is also an inclusive mechanism for more resilient and sustainable economic development.
  • A simple, coherent and enforceable Minimum Wage System should be designed with the aid of technology as minimum wages push wages up and reduce wage inequality without significantly affecting employment.

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

[Op-ed snap] Welcome measure


From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : labour reforms


In a welcome move, the Union government has announced a significant reduction in the contribution by workers and employers towards the employees’ state insurance (ESI) scheme.


From July 1, the overall contribution to ESI is slated to decline from 6.5 per cent to 4 per cent, with employers’ contribution falling from 4.75 per cent to 3.25 per cent, and that of employees from 1.75 per cent to 0.75 per cent.


Lower Cost of hiring and formal jobs – This decision, which lowers the cost of hiring for employers, should be seen in conjunction with recent initiatives such as the Pradhan Mantri Rojgar Protsahan Yojna (PMRPY) that aim to boost the creation of formal jobs by lowering the costs associated with formalisation.

Medical Care and cash benefits –The ESI Act provides for medical care and cash benefits in case of contingencies to employees drawing a salary up to Rs 21,000 per month. It is one of the pillars of the social security architecture in the country.


1.Its current cost structure is prohibitive.

2.Contribution far exceeds the benefits –

  • A look at its accounts shows that the current levels of contribution far exceed the benefits disbursed by it — in fact, only around half of the contributions are paid out as benefits.
  • For instance, in 2016-17, while total contributions stood at Rs 16,852 crore (including interest income of Rs 3,069 crore), total expenditure incurred for medical benefits was only a fraction at Rs 6,409 crore.
  • This growing divergence between collections and disbursement has led to a substantial build up of its reserves.
  • At the end of March 2018, its corpus stood at Rs 73,303 crore, up Rs 13,920 crore from last year.
  • Between 2012 and 2017, it earned Rs 19,993 crore as interest income alone on this corpus.
  • But this rise in income hasn’t translated to greater benefits.

3.Standing committee on labour’s report –

  • As the standing committee on labour noted in a report last year, people continue to be deprived of the benefits of the ESI scheme “due to lack of coverage of ESIC scheme, poor functioning of hospitals, etc”.
  • This suggests that contributions can be substantially lowered, while maintaining benefits at current levels.

Way Forward

  • Prohibitive mandatory contributions such as the provident fund/employee state insurance tend to act as deterrents to formalisation.
  • As the experience of PMRPY has shown, lowering these costs tends to have a positive impact on formalisation.
  • In fact, much of the recent rise in the EPFO subscriber base is on account of PMRPY.
  • Lowering costs further, or offering employees the choice of who handles their contributions, could accelerate the process further.

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

Periodic Labour Force Survey (PLFS) data for 2017-18


From UPSC perspective, the following things are important :

Prelims level : CWS and Usual Method

Mains level : Unemployment in India

  • The govt has finally released Annual Report of the Periodic Labour Force Survey (PLFS) 2017-18 and the Quarterly Bulletin PLFS.

Periodic Labour Force Survey (PLFS)

  • The PLFS was launched from 1st April 2017.
  • Primary aim of the PLFS is to generate reasonably accurate indicators of labour market at a short span for every quarter for which speed of quality data collection and processing are important.
  • PLFS was launched with the objective of measuring employment every three months in urban areas and once a year in both rural and urban areas.
  • The quarterly survey only captures data classed as current weekly status (CWS), while the annual survey measures both the usual status and CWS.
  • The NSSO was historically conducting Employment and Unemployment Surveys as part of its National Sample Surveys.

Who are the Unemployed?

  • Labour force means people working or looking for jobs in the age group of 15-29 years.
  • CWS Method: A person who is unable to get work for even an hour in the last seven days despite seeking employment is considered unemployed.
  • Usual Status Method: Under this, the employment activity of a person is determined on the basis of a reference period of 365 days preceding the date of the survey.


  • Labour force participation has been declining and touched 36.9% in 2017-18 as more among them, especially females, enrolled for higher studies.
  • The youth accounted for 28.2% of urban males and 27.8% of urban females.
  • During 2017-18, among people aged 15-29 years, the share of the educated was 65.8% among urban males. It was 65.4% among urban females.
  • A higher percentage of males compared to females had received either formal or non-formal vocational training.

Reality of jobless growth

  • The rising unemployment rate despite falling labour force participation for the youth is more worrying.
  • This is likely to raise questions about whether India is suffering from jobless growth.
  • According to Census 2011, India has 333 million youth—a number that is likely to touch 367 million in 2021 and 370 million by 2031.
  • With this huge rise in youth unemployment, it is hard to reconcile this information with the EPFO data that people keep talking about, because a majority of the new entrants to EPFO would be the younger people.

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

Social and Labor Convergence Programme (SLCP)


From UPSC perspective, the following things are important :

Prelims level : Social and Labor Convergence Programme (SLCP)

Mains level : Labour reforms in India

  • The ‘Social and Labor Convergence Programme (SLCP),’ an initiative to have a standard-neutral, converged assessment framework for the textile and clothing industry, will be launched in India very soon.

Social and Labor Convergence Programme (SLCP)

  • The SLCP is an initiative led by the world’s leading manufacturers, brands, retailers, industry groups, (inter)governmental organizations, service providers and civil society organizations, to eliminate audit fatigue by replacing current proprietary tools with a standard-neutral Converged Assessment Framework.
  • The objective of the programme is to improve the working conditions in textile units by allowing resources that were previously designated for compliance audits to be redirected towards the improvement of social and labour conditions.

What SCLP actually is?

  • This is a voluntary adoption by the textile and clothing makers.
  • The SLCP would be holding free seminars at Mumbai, Bengaluru, Tiruppur, and New Delhi and will launch operations in India, China, Sri Lanka and Taiwan this month.
  • The SLCP is not a code of conduct or compliance programme.
  • The converged assessment framework is a tool developed by the SLCP, which provides a data set with no value judgment or scoring.
  • It is, however, compatible with existing audit systems and codes of conduct. This means that the same data set can be used by a wide-range of stakeholders.
  • It eliminates the need for repetitive audits to be carried out on the same facility.


  • For the exporting units, it will reduce the number of social audits and facilitate measuring of employment practices, thus improving working conditions and employee relations.
  • It also redeploys resources towards improvement actions and fosters collaboration between supply chain partners.
  • The benefits of SLCP for facilities are that it addresses audit fatigue by reducing the number of social audits and facilitates measuring of employment practices, thus improving working conditions & employee relations.
  • It also redeploys resources towards improvement actions and fosters trust and collaboration between supply chain partners.
  • SLCP will be holding a series of free one-day seminars in four centres to introduce facilities and their business partners to the SLCP process.

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

How to strengthen the National Occupational Safety and Health systems


From UPSC perspective, the following things are important :

Prelims level : Not Much

Mains level : Ensuring occupational safety in India

Occupational Safety is at peril in India

  • It’s been a decade since the National Policy on Safety, Health and Environment at the Workplace (NPSHEW) was announced.
  • It called for a legislation on safety, health and environment at workplaces.
  • Yet, only the manufacturing, mining, ports and construction sectors are covered by existing laws on Occupational Safety and Health (OSH).
  • Around 2.3 lakh workers were affected and 2,500 died in more than 81 industrial accidents in the past three-and-a-half decades.
  • Yet sectors such as agriculture, services and transport remain unlegislated from the point of work-safety.

Why in news again?

  • The issue has been flagged by the Directorate General Factory Advice Service and Labour Institutes (DGFASLI) of the Union Ministry of Labour & Employment.
  • In 2018, the DGFASLI suggested that a comprehensive legislation on OSH covering all sectors needed to be developed within three years.
  • Progress, however, hasn’t been much. There has also not been a specific budget to support the effective implementation of policy.

Various sectors are uncovered. Why?

I. Factories Act not enforced

  • Under the Factories Act, 1948, the state governments are empowered to frame their respective state factories rules and enforce both the Act and the Rules in their states.
  • But these functionaries are not adequately staffed for enforcing the Act and the Rules. In fact, many posts under have been lying vacant.
  • Besides this, the central rules under this are not available.
  • These rules are required to be framed and enforced by an authority under the central government for the factories under the administrative control of the central government and public sector undertakings.
  • It is also worrying that the Micro, Small & Medium Enterprises too do not have any legislation to cover the safety and health of the workers.

II. Dock Workers Act, 1986 and Regulations, 1990 enforced in major ports only

  • The Dock Workers (Safety, Health and Welfare) Act, 1986 and Regulations, 1990 have been enforced only in major ports by the DGFASLI.
  • In other ports, the state governments are required to frame respective state regulations and enforce the provisions of the both, the Act and the Regulations, in these ports.
  • However, till date, none of the states have framed their regulations for enforcement in these ports.
  • These ports are also handling huge quantities of cargo, including dangerous goods; the absence of regulation on safety and health of the workers and its enforcement is a major gap

III. Building and Other Construction Workers’ Act not being enforced in true spirit

  • The Building and Other Construction Workers’ Act, 1996, is being enforced by the Labour Commissioners at the centre and at the state Level.
  • However the safety and health provisions under the Act are highly technical in nature and are not being enforced in true letter and spirit.

IV. Limited research on occupational safety

  • Modern approaches for dealing with safety, health and environment at workplace demands research in the area.
  • But the number of institutes in the country for research and development are limited and these too are not fully equipped for carrying out their activities effectively.
  • Capturing data related to occupational safety and health across all the sectors has also been an issue for a long time, which has not been taken seriously till date.
  • The most recent facts and figures shared by the ministry in Parliament in February 2019 were up to 2016 only.
  • It is important to have suitable schemes for subsidy and provision of loans to enable effective implementation of the policy. However, such a scheme too has not been launched so far.

V. The glooming Agriculture sector

  • The agriculture sector is the largest sector of economic activity and needs to be regulated for safety and health aspects.
  • But the sector is lacking on legislation on safety and health for workers in this sector.
  • There are certain Acts on occupational safety and health pertaining to certain equipment or substances, namely, the Dangerous Machines Regulation Act, the Insecticides Act.
  • But the enforcement authorities are not identified under these Acts and hence are not being enforced.
  • Lack of legislation on safety and health in the agriculture sector is hindering the ratification of ILO convention 155.
  • Ratification of ILO conventions concerning occupational safety and health needs to be expedited, says the profile document on occupational health prepared by the DGFASLI.

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

[op-ed snap] The shape of an urban employment guarantee


Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: Periodic Labour Force Survey (PLFS), NSSO

Mains level: Focusing on urban employment to deal with present employment crisis.



The unemployment rate has reached a 45-year high (6.1%) in 2017-18 as per leaked data from the Periodic Labour Force Survey (PLFS) report of the National Sample Survey Office (NSSO).

Severe Crisis regarding employment situation

  • According to the PLFS report, the unemployment problem is especially aggravated in India’s cities and towns. Aside from unemployment, low wages and precarity continue to be widespread.
  • In urban India the majority of the population continues to work in the informal sector.
  • Hence, India cannot ignore the crisis of urban employment.

Importance of towns in growth

  • Both State and Central governments tend to treat towns as “engines of growth” for the economy rather than spaces where thousands toil to make a living.
  • Programmes such as the Swarna Jayanti Shahari Rozgar Yojana (1997) that included an urban wage employment component have made way for those focussed on skilling and entrepreneurship.

Policy ignorance of urban bodies in growth and employment Context

  • India’s small and medium towns are particularly ignored in the State’s urban imagination.
  • As per Census 2011, India has 4,041 cities and towns with an urban local body (ULB) in the form of a Municipal Corporation, Municipal Council or Nagar Panchayat.
  • However, national-level urban programmes such as the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) only benefit a fraction of them.
  • Most ULBs are struggling to carry out basic functions because of a lack of financial and human capacity.
  • Further, with untrammelled urbanisation, they are facing more challenges due to the degradation of urban ecological commons.
  • Hence, we need new ways to promote the sustainable development of India’s small and medium towns.

Promoting Urban  Employment

  • In the context of the present employment crises, it is worthwhile considering to introduce an employment guarantee programme in urban areas.
  • Along with addressing the concerns of underemployment and unemployment, such a programme can bring in much-needed public investment in towns to improve the quality of urban infrastructure and services, restoring urban commons, skilling urban youth and increasing the capacity of ULBs.

1.Urban employment programme

  • The idea of an urban employment programme is gaining traction in political and policy debates.
  • According to multiple reports, it could be a key agenda of a possible Common Minimum Programme of the Opposition parties for the 2019 general election.
  • In Madhya Pradesh, the new State government has launched the “Yuva Swabhiman Yojana” which provides employment for both skilled and unskilled workers among urban youth.

A.Pros of the urban employment programme

  • Such a programme would give urban residents a statutory right to work and thereby ensure the right to life guaranteed under Article 21 of the Constitution.
  • To make it truly demand-driven, we have proposed that the ULB receives funds from the Centre and the State at the beginning of each financial year so that funds are available locally.
  • Wages would be disbursed in a decentralised manner at the local ULB.
  • Given the State’s relative neglect of small and medium towns and to avoid migration to big cities, such a programme can cover all ULBs with a population less than 1 million.
  • Since it is an urban programme, it should have a wider scope than the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA); this would provide employment for a variety of works for people with a range of skills and education levels
  • It would not come at the expense of MGNREGA but rather the two would go hand-in-hand.
  • Urban informal workers with limited formal education would benefit from this programme.
  • They can undertake standard public works such as building and maintenance of roads, footpaths and bridges for a guaranteed 100 days in a year, at ₹500 a day.
  • a new set of “green jobs” which include the creation, restoration/rejuvenation, and maintenance of urban commons such as green spaces and parks, forested or woody areas, degraded or waste land, and water bodies.
  • Further, a set of jobs that will cater to the “care deficit” in towns by providing child-care as well as care for the elderly and the disabled to the urban working class have been included.

2.Skilling and apprenticeship

  • Another novel aspect is the creation of a skilling and apprenticeship programme for unemployed youth with higher education
  • Who can sign up for a contiguous period of 150 days (five months), at ₹13,000 a month for five months to assist with administrative functions in municipal offices, government schools, or public health centres, and for the monitoring, measurement, or evaluation of environmental parameters.
  • While the first category of work is aimed at providing additional employment opportunities and raising incomes for those in low-wage informal work, the second category is to provide educated youth experience and skills that they can build-on further.
  • Such a programme will cost between 1.7-2.7% of GDP per year depending on design, and can provide work opportunities to around 30-50 million workers.
  • In light of the 74th Amendment, this programme should be administered by the ULB in a participatory manner by involving ward committees.

Checks and balances to enhance accountability

  • Strong transparency and accountability structures — proactive disclosure of information based on Section 4 of the RTI Act, proactive measures through mandatory periodic social audits, public hearing and reactive measures through a “Right to Timely Grievance Redressal” for workers.

Way Forward

  • An urban employment guarantee programme not only improves incomes of workers but also has multiplier effects on the economy.
  • It will boost local demand in small towns, improve public infrastructure and services, spur entrepreneurship, build skills of workers and create a shared sense of public goods.
  • Hence, the time is ripe for an employment guarantee programme in urban India.


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

[pib] PM Shram Yogi Maan-Dhan (PM-SYM) Scheme


Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre & States & the performance of these schemes

From UPSC perspective, the following things are important:

Prelims level: Pradhan Mantri Shram- Yogi Maandhan Yojana

Mains level: Pension Scheme for Unorganised sector workers


  • The PM Shram Yogi Maan-Dhan (PM-SYM) was formally inaugurated by PM Modi.

PM Shram Yogi Maan-Dhan (PM-SYM) 

  1. PM-SYM will be a Central Sector Scheme administered by the Ministry of Labour and Employment and implemented through Life Insurance Corporation of India and CSCs.
  2. LIC will be the Pension Fund Manager and responsible for Pension pay out.
  3. The amount collected under PM-SYM pension scheme shall be invested as per the investment pattern specified by GoI.

Eligibility Criteria

  1. The unorganised workers mostly engaged as home based workers, street vendors, mid-day meal workers, head loaders, brick kiln workers, cobblers, rag pickers, domestic workers, washer men, rickshaw pullers, landless labourers, etc. whose monthly income is Rs 15,000/ per month or less and belong to the entry age group of 18-40 years are eligible for the scheme.
  2. They should not be covered under New Pension Scheme (NPS), Employees’ State Insurance Corporation (ESIC) scheme or Employees’ Provident Fund Organisation (EPFO).
  3. Further, he/she should not be an income tax payer.

Features of PM-SYM

Pension Pay out

  1. Once the beneficiary joins the scheme at the entry age of 18-40 years, the beneficiary has to contribute till 60 years of age.
  2. On attaining the age of 60 years, the subscriber will get the assured monthly pension of Rs.3000/- with benefit of family pension, as the case may be.

Family Pension

  • During the receipt of pension, if the subscriber dies, the spouse of the beneficiary shall be entitled to receive 50% of the pension received by the beneficiary as family pension.
  • Family pension is applicable only to spouse.

Contribution by the Subscriber

  • The subscriber’s contributions to PM-SYM shall be made through ‘auto-debit’ facility from his/ her savings bank account/ Jan- Dhan account.
  • The subscriber is required to contribute the prescribed contribution amount from the age of joining PM-SYM till the age of 60 years.

Matching contribution by the Central Government  

  • PM-SYM is a voluntary and contributory pension scheme on a 50:50 basis where prescribed age-specific contribution shall be made by the beneficiary and the matching contribution by the Central Government.
  • For example, if a person enters the scheme at an age of 29 years, he is required to contribute Rs 100/ – per month till the age of 60 years.
  • An equal amount of Rs 100/- will be contributed by the Central Government.

Enrolment Process

  • The enrolment will be carried out by all the Community Service Centers (CSCs).
  • The subscriber will be required to have a mobile phone, savings bank account and Aadhaar number.
  • The eligible subscriber may visit the nearest CSCs and get enrolled for PM-SYM using Aadhaar number and savings bank account/ Jan-Dhan account number on self-certification basis.

Facilitation Centres

  • All the branch offices of LIC, the offices of ESIC/EPFO and all Labour offices of Central and State Governments will facilitate the unorganised workers about the Scheme.

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

[op-ed snap]Unemployment in India: The real reason behind low employment numbers


Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level:Periodic Labour Force Survey (PLFS).

Mains level: Mismatch in actual job growth and data being provided and reasons why there is a mismatch



Last month saw a series of discussions related to employment numbers reported in the leaked Periodic Labour Force Survey (PLFS).

Reason Behind Different Employment rates reporting

  • There to be a stark difference in the methods used to choose survey households.
  • The PLFS is based on the education level of households and the EUS is based on expenditure (urban) or livelihood (rural) of households.
  • Any direct comparison of the survey results of the PLFS with the earlier EUS would lead to erroneous inference about the employment scenario.
  • The sample chosen in the PLFS was not quite representative of the underlying Indian population in terms of the achievement of secondary education leading to lower estimates for the population, labour force participation and employment.


  • The EUS, which was last conducted during the 68th round of the NSSO for the duration July 2011 to June 2012, is a comprehensive survey providing a complete scenario of the labour force, across sectors like agriculture, industry, services, etc, in both rural and urban areas.
  • In any survey, a sample of locations are chosen judiciously to represent the entire country.
  • For the EUS 2011-12, the selection of locations for First Stage Units (FSU) in the sample, urban and rural classification was made based on the data from Census 2001 and each town with a population of more than 10 lakh was represented as a separate group in sample locations.
  • For the Second Stage Strata (SSS), the criteria for choosing households in both the rural and urban areas was household affluence, as shown in the accompanying table.
  • In rural areas, 50% of chosen households are those with principal earnings from non-agriculture-based activities.
  • For urban areas, the Monthly Per Capita Expenditure (MPCE) available from the previous rounds of the NSSO household surveys forms the basis for selecting households.
  • The sample also has good representation of the middle class engaged in gainful employment-related activities.


  • It provides continuous update on the employment situation in India (quarterly for urban and yearly for rural areas).
  • This survey has, for the first time, used the Computer Assisted Personal Interviewing (CAPI) method to capture data—a great step towards technology adoption. The sample size of various NSSO surveys are comparable and may assumed to be in line with the last EUS survey of 2011-12.
  • There is a major change in the criteria for the selection of households in the SSS for both rural and urban areas, based on the number of members in the household having general education up to secondary level (10th standard).
  • At first glance, the household selection criteria for the PLFS seems aspirational in nature, as the choice of households is dependent upon the education level of the household instead of the earlier criteria of affluence/expenditure.
  • It is true that mostly formal or better-playing employment is linked to the education level of the household members and this move by the PLFS is really aspirational in nature.
  • Percentage of people above secondary level as of 2011 is quite low, at 21.51%, which goes further down to 15.3% for the rural population but has a healthy number of 35.24% for the urban population. Not all informal or daily wage employment requires more than secondary level education. A healthy literate level of 63.07% implies that a large portion of the population has basic literacy, which is what is required for daily wage employment.
  • It can be seen that there are 66.42% of households (75.61% rural and 46.20% urban) with no family members with general education above secondary level. Whereas only 25% of households have been sampled based on these criteria, leading to a huge mismatch between the reality and the samples drawn. People from these households are mostly daily wagers or engaged in informal employment, which would also show lower employment estimates.


  • These numbers provided a good view on the education level of the people in India and showed that the stratification criteria used in the PLFS is not quite aligned to the secondary and above secondary levels of education in the country.
  • This under sampling, leading to under-representation of such households, is leading to lower estimates of the people for this group in labour force participation and employment rate.
  • The percentages of households for the urban area, though far from the sample sizes are closer to the reality in urban areas compared to rural areas.
  • It would be proper to wait for the next round of the PLFS (2018-19) that is under progress and compare its findings with the results of the PLFS (2017-18) to make a more correct assessment of the employment rate in the country.



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

Minimum wage: what it is, how it is fixed


Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Minimum wage determination criteria

Mains level:  Minimum wages for workers


  • Central trade unions have called a nationwide strike today to protest the government’s announcement of a hike in minimum wages for workers.

Why are the trade unions not happy?

  1. The government has announced a 42% increase in minimum wages for unskilled non-agricultural workers in central sphere.
  2. Employees of the central government and allied departments and undertakings, for category ‘C’ areas from Rs 246 a day to Rs 350 a day — or Rs 9,100 for a month of 26 working days.
  3. A, B and C category areas are determined broadly on the basis of their urban/rural profile.
  4. The trade unions had demanded statutory minimum wage for all workers of not less than Rs 18,000 per month.

Who will benefit from the increase?

  1. The minimum wage revision will be applicable to central government employees in its scheduled employment, in line with the provisions of the Minimum Wage Act, 1948.
  2. Currently, there are 45 scheduled employments under the central sphere, including agriculture, stone mines, construction, non-coal mines, and loading and unloading, and around 1,679 employments of states.

How is the minimum wage determined?

  1. The norms for determining the minimum wage were recommended by the Indian Labour Conference in 1957.
  2. It decided that the minimum wage should be need-based, and should ensure the minimum human needs of the industrial worker.
  3. Five norms were suggested:
  • Three consumption units for one earner in a standard working class family, with the earnings of women, children and adolescents in the family being disregarded.
  • Net intake of 2,700 calories for an average Indian adult of moderate activity.
  • Per capita consumption of cloth of 18 yards per annum, which would mean for the average worker’s family of 4 a total 72 yards.
  • Rent corresponding to the minimum area provided for under the Subsidised Industrial Housing Scheme for low-income groups.
  • Fuel, lighting and other miscellaneous items of expenditure to constitute 20 per cent of the total minimum wage.

SC Judgement

  1. In 1991, the apex Court, in Raptakos & Co. Vs its workers, ruled that children’s education, medical requirement, minimum recreation including festivals, ceremonies, provision for old age and marriage, should constitute 25%, and be used as a guide for fixing the wage.
  2. These six criteria are considered by the central and state governments to fix the minimum wage.
  3. The minimum wages include basic and variable dearness allowance, which is revised twice a year based on Consumer Price Index (Industrial Worker).

Why is there a disparity in minimum wages across India?

  1. Based on the recommendations of the National Commission on Rural Labour in 1991, a National Floor Level Minimum Wage was proposed in order to have a uniform wage structure across the country.
  2. In 1996, the NFL Minimum Wage was fixed at Rs 35 per day, which was revised in subsequent years and currently stands at Rs 160 per day.
  3. Since this Wage does not have statutory backing, it is not mandatory for states — although they are advised to fix minimum wages at not less than the National Floor Level Minimum Wage.
  4. Some states such as Kerala and Delhi already have a higher minimum wage for unskilled labourers than what has been announced by the government.
  5. However, in the absence of legal backing, the lowest minimum wage drops very low.

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

[pib] Pradhan Mantri Shram Yogi Maan-Dhan (PM- SYM)


Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre & States & the performance of these schemes

From UPSC perspective, the following things are important:

Prelims level: Pradhan Mantri Shram- Yogi Maandhan Yojana

Mains level: Pension Scheme for Unorganised sector workers


  • The PM Shram Yogi Maan-Dhan (PM-SYM)will be rolled out by the Ministry of Labour and Employment from. 15th Feb, 2019.

PM Shram Yogi Maan-Dhan (PM-SYM) 

  1. PM-SYM will be a Central Sector Scheme administered by the Ministry of Labour and Employment and implemented through Life Insurance Corporation of India and CSCs.
  2. LIC will be the Pension Fund Manager and responsible for Pension pay out.
  3. The amount collected under PM-SYM pension scheme shall be invested as per the investment pattern specified by GoI.

Eligibility Criteria

  1. The unorganised workers mostly engaged as home based workers, street vendors, mid-day meal workers, head loaders, brick kiln workers, cobblers, rag pickers, domestic workers, washer men, rickshaw pullers, landless labourers, etc. whose monthly income is Rs 15,000/ per month or less and belong to the entry age group of 18-40 years are eligible for the scheme.
  2. They should not be covered under New Pension Scheme (NPS), Employees’ State Insurance Corporation (ESIC) scheme or Employees’ Provident Fund Organisation (EPFO).
  3. Further, he/she should not be an income tax payer.

Salient Features of PM-SYM

Pension Pay out

  1. Once the beneficiary joins the scheme at the entry age of 18-40 years, the beneficiary has to contribute till 60 years of age.
  2. On attaining the age of 60 years, the subscriber will get the assured monthly pension of Rs.3000/- with benefit of family pension, as the case may be.

Family Pension

  • During the receipt of pension, if the subscriber dies, the spouse of the beneficiary shall be entitled to receive 50% of the pension received by the beneficiary as family pension.
  • Family pension is applicable only to spouse.

Contribution by the Subscriber

  • The subscriber’s contributions to PM-SYM shall be made through ‘auto-debit’ facility from his/ her savings bank account/ Jan- Dhan account.
  • The subscriber is required to contribute the prescribed contribution amount from the age of joining PM-SYM till the age of 60 years.

Matching contribution by the Central Government  

  • PM-SYM is a voluntary and contributory pension scheme on a 50:50 basis where prescribed age-specific contribution shall be made by the beneficiary and the matching contribution by the Central Government.
  • For example, if a person enters the scheme at an age of 29 years, he is required to contribute Rs 100/ – per month till the age of 60 years.
  • An equal amount of Rs 100/- will be contributed by the Central Government.

Enrolment Process

  • The enrolment will be carried out by all the Community Service Centers (CSCs).
  • The subscriber will be required to have a mobile phone, savings bank account and Aadhaar number.
  • The eligible subscriber may visit the nearest CSCs and get enrolled for PM-SYM using Aadhaar number and savings bank account/ Jan-Dhan account number on self-certification basis.

Facilitation Centres

  • All the branch offices of LIC, the offices of ESIC/EPFO and all Labour offices of Central and State Governments will facilitate the unorganised workers about the Scheme.

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

[op-ed snap] The shape of the jobs crisis


Mains Paper 3: Economic Development| Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

From UPSC perspective, the following things are important:

Prelims level: Basic knowledge of India’s demographic dividend.

Mains level: The news-card analyses the issues of growing unemployment in India and why there’s a need for an industrial policy or employment strategy, in a brief manner.


  • India has no industrial policy or employment strategy to ride the wave of its demographic dividend

Job creation has slowed down

  • Job creation has slowed since 2011-12, the year of the last published National Sample Survey Office (NSSO) labour force survey.
  • Experts have used Labour Bureau annual survey (2015-16) data and Centre for Monitoring Indian Economy Pvt. Ltd. (CMIE) data (post-2016), which has a sample size larger than the NSSO labour force surveys, to reach this conclusion.
  • Both surveys cover rural and urban, and organised and unorganised sector employment.
  • They capture both the Employees’ Provident Fund Organisation/National Pension Scheme (organised) as well as such employment as might be generated by MUDRA loans or platform economy jobs.
  • The latter two job sources are precisely what the government claims were not being captured by jobs data available.
  • However, government claims on absence of ‘good’ data on jobs are simply untenable.

A jump now

  • The leaked NSSO 2017-18 data have shown that while the open unemployment rate (which does not measure disguised unemployment and informal poor quality jobs that abound in the economy) by the usual status never went over 2.6% between 1977-78 and 2011-12, it has now jumped to 6.1% in 2017-18.

More young people have become educated

  • This was expected as in the last 10-12 years, more young people have become educated.
  • The tertiary education enrolment rate (for those in the 18-23 age group) rose from 11% in 2006 to 26% in 2016.
  • The gross secondary (classes 9-10) enrolment rate for those in the 15-16 age group shot up from 58% in 2010 to 90% in 2016.
  • The expectation of such youth is for a urban, regular job in either industry or services, not in agriculture.
  • If they have the financial wherewithal to obtain education up to such levels, they can also “afford” to remain unemployed.
  • Poor people, who are also much more poorly educated, have a much lower capacity to withstand open unemployment, and hence have lower open unemployment rates.

Unemployed have stopped looking for work

  • What NSSO 2017-18 also shows is that as open unemployment rates increased, more and more people got disheartened and fell out of the labour force.
  • In other words, they stopped looking for work.
  • The result is that labour force participation rates (LFPR, i.e. those looking for work) for all ages, fell sharply from 43% in 2004-5 to 39.5% in 2011-12, to 36.9% in 2017-18 (a reflection mainly though not only of the falling female LFPR).

Growing numbers of youth who are NEETs

  • This shows up in the growing numbers of youth who are NEETs: not in education, employment or training.
  • They are a potential source of both our demographic dividend but also what is looking to be a mounting demographic disaster.

Across education categories

  • A sharp increase in the unemployment rate of the educated should have worried the government.
  • It is estimated that the unemployment rate rose over 2011-12 to 2016 from 0.6% to 2.4% for those with middle education (class 8);
  • 1.3% to 3.2% for those who had passed class 10;
  • 2% to 4.4% for those who had passed class 12;
  • 4.1% to 8.4% for graduates; and
  • 5.3% to 8.5% for post-graduates.
  • Even more worrying, for those with technical education, the unemployment rate rose for graduates from 6.9% to 11%, for post-graduates from 5.7% to 7.7%, and for the vocationally trained from 4.9% to 7.9%.

Structural retrogression for Indian Economy

  • For an economy at India’s stage of development, an increase of workers in agriculture (of 20 million that took place over 1999-2004) is a structural retrogression, in a direction opposite to the desired one.
  • Between 2004-5 and 2011-12, the number of workers in agriculture fell sharply, which is good, for the first time in India’s economic history.
  • Similarly, the number of youth (15-29 years) employed in agriculture fell from 86.8 million to 60.9 million (or at the rate of 3 million per annum) between 2004-5 and 2011-12.
  • However, after 2012, as non-agricultural job growth slowed, the number of youth in agriculture actually increased to 84.8 million till 2015-16 and even more since then (as the CMIE data would attest).
  • These youth were better educated than the earlier cohort, but were forced to be in agriculture.

Drop in manufacturing jobs

  • Manufacturing jobs fell in absolute terms, from 58.9 million in 2011-12 to 48.3 million in 2015-16, a whopping 10.6 million over a four-year period.
  • This is consistent with slowing growth in the Index of Industrial Production (IIP), which consists of manufacturing, mining, and electricity.
  • The IIP had sharply risen from 100 in 2004-5 to 172 by 2013-14 (in the 2004-5 series), but only rose from a base of 100 in 2011-12 in the later series to 107 in 2013-14, and to 125.3 in 2017-18.
  • This is also consistent with exports first falling after 2013, then barely recovering to levels still lower than 2013.
  • It is also consistent with investment-to-GDP ratio falling sharply since 2013, and still remaining well below 2013 levels.
  • This holds for both private and public investment.

“NEET”: A major concern

  • What is tragic is the growing number of educated youth (15-29 years) who are “NEET”.
  • This number (70 million in 2004-5) increased by 2 million per annum during 2004-5 and 2011-12, but grew by about 5 million per annum (2011-12 to 2015-16).
  • If that later trend continued it is estimated it would have increased to 115.6 million in 2017-18.
  • That is a 32 million increase in “NEETs” in our society over 2011-12 to 2017-18.

Way Forward

  • These youth (“NEET” and unemployed) together constitute the potential labour force, which can be utilised to realise the demographic dividend in India.
  • It is estimated that the number of new entrants into the labour force (currently at least 5 million per annum), and especially educated entrants into the labour force will go on increasing until 2030.
  • It will thereafter still increase, though at a decelerating pace.
  • By 2040 our demographic dividend — which comes but once in the lifetime of a nation — will be over.
  • China managed to reduce poverty sharply by designing an employment strategy (underpinned by an education and skills policy) aligned to its industrial strategy.
  • That is why it rode the wave of its demographic dividend.
  • It is time India should also devise and align its industrial policy and employment strategy to reap the benefits of its demographic dividend.

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

Pradhan Mantri Shram-Yogi Maandhan Yojana


Mains Paper 2: Governance | Welfare schemes for vulnerable sections of the population by the Centre & States & the performance of these schemes

From UPSC perspective, the following things are important:

Prelims level: Pradhan Mantri Shram- Yogi Maandhan Yojana

Mains level: Pension Scheme for Unorganised sector workers


Pradhan Mantri Shram-Yogi Maandhan Yojana

  1. The scheme announced in the Budget 2019 has proposed to launch the scheme for the unorganised sector workers with monthly income upto Rs 15,000.
  2. The Government will deposit equal matching share in the pension account of the worker every month.
  3. It is expected that at least 10 crore labourers and workers in the unorganised sector will avail the benefit of the scheme within next five years making it one of the largest pension schemes of the world.
  4. A sum of Rs 500 crore has been allocated for the Scheme.
  5. The scheme will also be implemented from the current year.


  1. This pension yojana shall provide an assured monthly pension of Rs 3,000 from the age of 60 years on a monthly contribution of a small affordable amount during their working age.
  2. An unorganised sector worker joining pension yojana at the age of 29 years will have to contribute only Rs 100 per month till the age of 60 years.
  3. A worker joining the pension yojana at 18 years, will have to contribute as little as Rs 55 per month only.

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

Yuva Swabhiman Yojana


Mains Paper 2: Polity | Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of the vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Yuva Swabhiman Yojana

Mains level:  Various initiatives for EWS


  • The Madhya Pradesh government has announced the launch of a scheme to ensure temporary employment to the youths from the economically weaker sections (EWS) in the urban areas.

Yuva Swabhiman Yojana

  1. The Scheme would guarantee 100 days of employment every year to the EWS youths.
  2. During their employment, youths would be given skills training of their choice, so that they can take benefits of the available job opportunities.
  3. While those in rural areas get employment under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), the urban poor youth are left out.
  4. This scheme will effectively cover them.

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

[op-ed snap]Diagnosing the job crisis


Mains Paper 2: Social Justice|Issues relating to development and management of Social Sector/Services relating to Health,Education, Human Resources.

From UPSC perspective, the following things are important:

Prelims level:Nothing as such.

Mains level: The news-card analyses the problem of India’s MSME sector, in a brief manner.


  • It has been observed by some experts that the regulatory framework that has choked MSMEs has contributed to the farm crisis and quota demands in India.
  • And that farm loan waivers, migration restrictions and10 per cent economically backward reservation in government jobs does not represent a sustainable approach.

Overhauling India’s MSME sector

  • The only way to create millions of jobs with decent wages is a policy re-imagination of the rights, needs, and treatment of formal MSME entrepreneurs.
  • The average employer in India is not a formal MSME or somebody large like Marico, Lupin or the Tatas, but an informal MSME because the present regulatory framework are not pro-informal sector MSME.
  • Fewer than 2 per cent of our 63 million MSME’s are formal.

Labour market interventions in MSMEs can be by:

  • Taking the long view:a 10-year plan is not 10-one-year plans for formalisation, urbanisation, industrialisation, financialisation and human capital.
  • Recognise progress made:6 million new formal enterprises and 30 million new social security payers in the last three years), and
  • Get bolder with structural interventions that matter most to MSME entrepreneurs.

India’s problem is no longer jobs but wages

  • Creating millions of well-paying jobs needs ending killing of millions of MSMEs (small but formal employers that will grow and pay the wage premium because of enterprise productivity).

Formalisation of MSMEs need

  • lower regulatory framework,
  • labour law rationalisation,
  • e-governance, and
  • education effectiveness
  • all in turn need civil service reform.

Way Forward

  • The only solution to helping farmers is having less of them and making the remaining productive — US farms with more than $1 million in sales are only 6 per cent of farms but produce 66 per cent of output.
  • The need of the hour is to have enough formal MSME employers.

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

Private Member’s Bill to allow employees to ignore calls after work


Mains Paper 2: Polity | Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of the vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Right to Disconnect Bill, 2018

Mains level:  Employee Welfare measures in India


  • A Member of Parliament has introduced a Private Member’s Bill in the Lok Sabha to give employees the right to not respond to communication from employers outside of office hours.

Why such move?

  1. Studies have found that if an employee is expected to be available round the clock, they tend to exhibit risks of over-work like sleep deprivation, developing stress and being emotionally exhausted.
  2. This persistent urge to respond to calls and e-mails (termed as ‘telepressure’), constant checking of e-mails throughout the day, and even on weekends and holidays, is reported to have destroyed work-life balance of employees.

Right to Disconnect Bill, 2018

  1. The Bill is to “establish an Employees’ Welfare Authority to confer the right on every employee to disconnect from work-related telephone calls and emails beyond work hours and on holidays.
  2. It calls for the Right to Refuse to answer calls and emails outside work hours and for all matters connected therewith or incidental thereto.
  3. It means that while the employer may contact the worker after work hours, the employee is not obliged to reply or shall have the right to refuse to answer such calls.
  4. Further, in case an employee refuses to reply any call during out-of-work hours, such employee shall not be subject to any disciplinary action by the employer.
  5. Non-adherence would lead to penalties of one per cent of the total employee remuneration.

Various Provisions

Overtime Wages

  • If an employee works beyond work hours which are mutually agreed — he/she shall be entitled to overtime at the normal wage rate.

Digital Detox

  • The Bill states that the government is entitled to provide employees counselling, digital detox centres, and similar resources “to free an employee from digital distractions and enable him to truly connect with the people around him.

Employee Welfare Authority

  1. An Employee Welfare Authority will be set up, including IT, Communication and Labour ministers, under the Bill which.
  2. Besides publishing a study regarding the impact of digital tools beyond work hours and yearly reports, the authority is required to outline a charter outlining employee-employer negotiations.
  3. Companies with more than 10 employees would periodically negotiate specific terms with their workers, publish their own charter, and create an Employee Welfare Committee consisting of representatives of the company’s workforce.


Private member’s bill

  1. Members of Parliament other than ministers are called private members and bills presented by them are known as private member’s bills.
  2. A private member bill can be introduced by both ruling party and opposition MPs.
  3. They can introduce a bill in the parliament after giving prior notice of one month.
  4. The bill needs to be passed in both houses of parliament.
  5. Once passed in both the houses, bill needs to get assent of the president to become an act.
  6. By set tradition, President can easily exercise his absolute veto power against such bills.
  7. In Lok Sabha, the last two and a half hours of a sitting on every Friday are generally allotted for transaction of “Private Members’ Business”, i.e., Private Members’ Bills and Private Members’ Resolutions.

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

Sikkim launches “One Family One Job” Scheme


Mains Paper 3: Economy | Development & Employment

From the UPSC perspective, the following things are important:

Prelims level: ‘One Family One Job’ scheme

Mains level: Ensuring employment in NE states


  • Sikkim has recently launched the ‘One Family One Job’ scheme which entitles one government job for every family in the state.

‘One Family One Job’ Scheme

  1. The scheme envisions employment to a member of every family which does not have a government job in the state.
  2. Under this scheme, all loan debts in the farming and agriculture sector would be revoked.
  3. At present recruitments are being made for Group C and Group D posts in 12 government departments.
  4. The letters were awarded only to members of those families which do not have a government job at present.
  5. The task of providing employment was entrusted to the Department of Personnel.
  6. Over 25,000 already employed but unregularised government employees would also be subsequently regularized within 2019 according to their seniority.

What makes it special?

  1. Sikkim has become the first state in the country to carry out such an exclusive programme for the people who would now be entitled to state government employee benifits.
  2. Sikkim was the only state that earmarks 70 per cent of its revenues towards salaries for state government employees.
  3. As of now, the state government has over 1 lakh regularised employees on its rolls from a population of just 6.4 lakh.
  4. Sikkim is also the only state in the country that gives the highest salaries to state government employees.

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

New national policy for domestic workers being drafted, 40 lakh to benefit


Mains Paper 2: Governance | Mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections.

From UPSC perspective, the following things are important:

Prelims level: National policy for domestic workers

Mains level: Welfare measures for domestic workers and unorganized sector workers


  • The Ministry of Labour & Employment is set to formulate a National Policy on Domestic Workers for providing various social securities.

Draft National Policy on Domestic Workers

  1. In a bid to give recognition to domestic workers besides making them eligible for minimum wages, social security and safe working conditions, labour ministry is drafting the national policy.
  2. As per the National Sample Survey, there are an estimated 39 lakhs people employed as domestic workers by private households, of which 26 lakhs are female domestic workers.
  3. Some of the salient features of the proposed draft are:
  • Inclusion of Domestic Workers in the existing legislations
  • Right to register as unorganized   workers
  • Right to form their own associations/unions
  • Right to minimum wages, access to social security
  • Right to enhance their skills
  • Protection against from abuse and exploitation
  • Access to courts, tribunals for grievance redressal
  • Establishment of a mechanism for regulation of private placement agencies.
  • Establishment of a grievance redressal system for domestic workers.

Other Policy Measures

  1. The Centre is already implementing Unorganised Workers’ Social Security Act, 2008.
  2. The act aims to provide social security relating to life and disability cover, health and maternity benefits, old age protection to the unorganised workers including domestic workers.
  3. The ministry is also drafting a Universal Social Security Code that would cover even domestic workers, who are otherwise deprived of benefits such as medical insurance, pension, maternity and mandatory leave.

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

[pib] Formulation of a new Labour Code


Mains Paper 2: Polity | Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of the vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Basics of the proposed Code

Mains level:  Labour related legislation in India


Labour Code on Industrial Relations

  1. The Ministry of Labour & Employment has prepared a Labour Code on Industrial Relations, by simplifying, amalgamating and rationalizing the relevant provisions of the following three Labour Laws:-
  • The Industrial Disputes Act, 1947,
  • The Trade Unions Act, 1926,
  • The Industrial Employment (Standing Orders) Act, 1946.
  1. The provisions of the draft Code have been discussed with stakeholders in various Tripartite Meetings and then finalized.
  2. Labour code on wages and industrial relations are two of the four codes that labour ministry had been working over the last few years.
  3. In line with recommendations of Second National Commission on Labour, ministry had formed four labour codes, namely wages, industrial relations, social security & welfare and occupational safety, health and working conditions.

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

[pib] Amendment to the Trade Unions Act, 1926 to make provisions regarding Recognition of Trade Unions


Mains Paper 2: Polity | Mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections

From UPSC perspective, the following things are important:

Prelims level: Trade Unions Act, 1926

Mains level:  Labour related legislation in India


  • The Union Cabinet has approved Amendment to the Trade Unions Act, 1926 to make provisions regarding Recognition of Trade Unions.

What Amendments brings in?

  1. The proposed Bill will ensure that the nomination of workers’ representatives in tripartite bodies by the government will become more transparent.
  2. Trade Unions so recognized would be accountable in maintaining industrial harmony.
  3. Recognition of Trade Unions at Central/State level would reduce duplicacy of such exercise by different departments. Recognized Trade Unions may be assigned specific roles at Central or State level.

Benefits of the Amendments

The approval will facilitate:

  • Recognition of Trade Unions at Central and State level;
  • Ensure true representation of workers in the tripartite bodies;
  • Check on the arbitrary nomination of workers’ representatives by the Government
  • Reduce litigations and industrial unrest

Indian Trade Unions Act, 1926

  1. The legislation regulating the trade unions is the Indian Trade Unions Act, 1926.
  2. The Act deals with the registration of trade unions, their rights, their liabilities and responsibilities as well as ensures that their funds are utilized properly.
  3. It gives legal and corporate status to the registered trade unions.
  4. It also seeks to protect them from civil or criminal prosecution so that they could carry on their legitimate activities for the benefit of the working class.
  5. The Act is applicable not only to the union of workers but also to the association of employers and extends to whole of India.
  6. Also, certain Acts, namely, the Societies Registration Act, 1860; the Co-operative Societies Act, 1912; and the Companies Act, 1956 shall not apply to any registered trade union, and that the registration of any such trade union under any such Act shall be void.

Trade Unions in India

  1. The credit for the first association of Indian workers is generally given to the Bombay Mill-Hands Association founded by N.M. Lokhande in 1890.
  2. This was in the period just after the passing of the ‘First’ Factories Act in 1881 by the British Government of the time.
  3. The following years saw the formation of several labour associations and unions.
  4. The first clearly registered trade-union is considered to be the Madras Labour Union founded by B.P. Wadia in 1918.

The lagging manufacturing sector

  • Despite low wages, India is not a global manufacturing hub, even while being one of the fastest growing service sectors in the world
  • India’s service sector has grown at an annual rate of 9% since 2001, and contributed 57% of the GDP in 2012-13
  • The industrial sector, meanwhile, only recorded a negligible increase and contributes nearly half at 26% of GDP
  • Despite the availability of human resources, India has not been able to leverage its demographics for industrial development

This disparity is considered to be an outcome of:

  1. High rates of corruption
  2. Excessively complex worker-centric labour regulations
  3. Low labour productivity

Issues in Indian labour laws:

#1. Archaic laws

  • In the pre-independence period, British colonialists in India suppressed labour rights, trade unions and the freedom of association among workers. As a result, labour activism became a part of the Indian freedom struggle
  • In 1950, the newly framed Constitution of India looked to undo these wrongs by including fundamental labour rights, along with complex labour laws. These laws made hiring additional workers increasingly difficult
  • Despite several decades of economic progress, these laws have not been amended or reformed in order to foster a friendlier climate for business

#2. Labour productivity

  • India has low labour productivity in comparison with other developing nations
  • As a result, in the early days of offshoring, Western firms showed greater interest in setting up manufacturing facilities in Thailand, Mexico, China, Vietnam and Philippines rather than in India
  • All of these countries had as bad a record of bureaucratic corruption as India did at the time, but labour productivity was found to be higher

#3. Politics

  • In Kerala alone, for example, there were nearly 363 hartals between 2005 and 2012, causing loss of working days
  • In addition, in the 1970s and 1980s, Indian politics was dominated by socialists who created the impression that profit making by private enterprises is undesirable
  • Policymakers also further strengthened India’s complicated labour laws

#4. Complexity

  • Labour is a subject in concurrent list of the Constitution of India. Thus both centre and states can enact laws on labour matters
  • There are about 45 central government laws and more than 100 state statutes, sometimes overlapping or contradicting

#5. Rigidity

  • India has one of the most rigid labour regulatory frameworks in the world
  • Example- Industrial Disputes Act of 1947 stipulates that a firm with 100 employees or more cannot close down without government permission
  • Such laws curtail the growth of a firm by forcing it to hire fewer workers and remain small

#6. Cost of compliance

  • There are also high costs involved in complying with several labour laws
  • Example- under the Factories Act, firms with 10 or more workers and firms which use electric power are required to keep records and file regular reports on matters such as overtime work, wages, attendance, sick leave and worker fines

Need for reforms:

  • As early as in 2002, the Second National Commission on Labour suggested the formulation of labour codes similar to those in Russia, Germany, Poland, Hungary and Canada
  • The commission recommended that labour legislation be divided into five broad areas: industrial relations, wages, social security, safety and welfare, and working conditions
  • It is predicted that the size of India’s workforce will swell to 249 million by 2050, while China’s is set to decline to 166 million during the same period

So how should the Indian government and Indian industry build India’s human resources for the cause of future growth?

Way ahead:

  • Legislative reforms such as those taken up recently by central government and states such as Rajasthan, Gujarat, MP are very much needed
  • Empowering women to enter the workplace and providing them additional support
  • Physically challenged- Increasing current 3% reservation in governmental and government-funded jobs. Also ensuring that workplaces are disabled-friendly
  • Example- Karnataka granted exemptions to IT industries from the Industrial Employment (Standing Orders) Act of 1946. It undermines the employer’s autonomy in determining the terms of employment, working hours, leave grant and similar matters
  • Providing social security to workers in the informal sector would also pave the way for a more satisfied and productive workforce
  • Training and skilling- India has a demographic advantage but in order to utilize this dividend, India needs to invest heavily in training its talent
  • India’s supply of labour presently outnumbers industry’s demand for them. As a result, the government and manufacturing firms need to invest in training and skilling


The guiding principle for India’s labour policy reformers should not merely be ring fencing jobs but safeguarding workers through social assistance, re-employment support (such as that which is provided in several Western nations) and skill building, and supporting employers in employee training and development.


  • From our collection on Govt schemes:
  1. Pandit Deendayal Upadhyay Shramev Jayate Karyakram
  2. From Jan Dhan to Jan Suraksha

Published with inputs from Swapnil
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