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Subject: Labour Reform

  • Majority of India’s gig workers remain out of govt’s reach

    Majority of India’s gig workers remain out of govt’s reach

    Why in the News

    Only 8.58 lakh gig workers stood registered on the e-Shram portal as of the Ministry of Labour and Employment’s reply in the Rajya Sabha in January 2026, the latest publicly available figure.

    How far has the Budget’s health cover promise actually reached?

    1. Registration against the promise: The Budget’s beneficiary figure of over one crore compares with 8.58 lakh registrations on e-Shram, the figure the Ministry gave Parliament in January 2026.
    2. The optimistic case still falls short: A doubling of registrations since January would still cover only around 15 percent of the estimated gig workforce.
    3. The promise itself drove enrolment: Registrations of gig workers on e-Shram rose sharply from 2025, and the health cover announcement is the visible cause of that surge.
    4. Registration is the gate to every benefit: Registration on e-Shram is a prerequisite for availing benefits, so an unregistered gig worker is invisible to the scheme by design.

    Why does the government not know how many gig workers India has?

    1. One source for every estimate: The figure of over one crore gig workers, quoted in many government replies in Parliament last year, comes from a single document, the NITI Aayog report “India’s Booming Gig and Platform Economy” released in June 2022.
    2. What that report estimated: It put the gig workforce at around 77 lakh in 2020-21 and projected 1.27 crore in 2024-25 and 1.43 crore in the year after.
    3. No dedicated measurement effort exists: In the absence of any effort to measure the gig workforce, official estimates rely solely on this NITI Aayog report.
    4. The national labour survey does not count them: The Periodic Labour Force Survey (PLFS) reports do not capture gig workers as a distinct category, even though the estimated gig workforce is about 2 percent of India’s total workforce of 61.6 crore as cited by the 2025 PLFS report.

    What has the government built for gig workers, and what has not arrived?

    1. e-Shram as the single register: The portal, launched in 2021, is conceptualised as an Aadhaar-seeded National Database of Unorganised Workers (NDUW) and has become the unified platform for tracking the unorganised workforce, including gig workers.
    2. A legal definition came only in 2020: The government officially defined a gig worker only in the Code on Social Security, 2020, which came into force last year.
    3. The Code’s promises remain largely on paper: The Code promised accident insurance, maternity benefits and a dedicated social security fund for gig workers, and most of these are yet to materialise.

    Where are the registered gig workers, by State and by sector?

    1. Registrations are uneven across States: The ten States with the most registered gig workers as of January 2026 are led by West Bengal (54,734), Delhi (49,479), Andhra Pradesh (39,212), Rajasthan (38,205), Karnataka (37,871), Gujarat (34,756) and Madhya Pradesh (34,351), with Maharashtra, Uttar Pradesh and Bihar completing the list.
    2. Urbanised southern States are missing from the top ten: Tamil Nadu (31,654), Telangana (29,951) and Keralam (11,219) are not among the ten States with the highest registrations, despite their high urbanisation.
    3. Twenty one sectors on paper, three in practice: NITI Aayog’s 2022 report listed 21 sectors with gig workers, including agriculture, healthcare, education and retail, but e-Shram registrations concentrate in the food industry, transportation, and domestic and household work.
    4. The sector shares are lopsided: The largest single sector accounts for 32.8 percent of registered gig workers, and construction (3.6 percent) and agriculture (3.4 percent) are the smallest of the top five sectors.

    Challenges to e-Shram as the gateway for gig worker welfare

    1. Enrolment depends on the worker, not the platform: e-Shram is a self-registration portal, and no aggregator is obliged to enrol the workers it engages. Eg. The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023 instead makes aggregators register their workers with a State welfare board.
      The Fix: Require aggregators to push worker data into e-Shram at onboarding under the Code on Social Security, 2020, so registration stops depending on individual initiative.
    2. No survey category means no target to measure against: Without a gig work module in the labour survey, the government cannot say what share of the workforce any scheme covers. Eg. The Ministry’s January 2026 reply to Parliament could cite portal registrations but no survey count.
      The Fix: Add a platform and gig work classification to the PLFS questionnaire so coverage is measured against a surveyed denominator.
    3. The funding source has not been built: The Code provides for aggregator contributions of 1 to 2 percent of annual turnover, capped at 5 percent of payments to workers, and the fund those contributions were to feed has not materialised. Eg. Karnataka’s Platform Based Gig Workers (Social Security and Welfare) Act, 2025 levies its own transaction fee because no central fund is flowing.
      The Fix: Notify the contribution rules and the social security fund so central benefits do not depend on Budget-by-Budget announcements.
    4. State schemes fragment portability: State-level gig worker boards create separate registrations and benefits for a workforce that moves across State lines. Eg. A delivery worker registered in Rajasthan gains nothing from Karnataka’s fund on relocating.
      The Fix: Make e-Shram the single identifier that State boards read from, so benefits follow the worker across States.

    Conclusion

    The health cover promise has produced registrations faster than any earlier measure, but the register still holds a fraction of the workforce the promise was made for. The deeper problem is a denominator the state has never measured. The next e-Shram registration figure released to Parliament, and whether the Code’s social security fund is finally notified, are the two markers to watch.

    Back2Basics: Gig worker and platform worker under the Code on Social Security, 2020

    1. Gig worker: A person who performs work or participates in a work arrangement and earns from such activities outside the traditional employer-employee relationship.
    2. Platform worker: A person in platform work, meaning work arranged through an online platform that connects organisations or individuals with workers to provide specific services for payment.
    3. Aggregator: A digital intermediary or marketplace through which a buyer or user connects with a seller or service provider, the entity the Code identifies for contributions.
    4. Why the definitions matter: They are the first statutory recognition of gig work in India, and eligibility for the Code’s social security schemes is tied to them.

    [2024, GS3, 15 marks] Discuss the merits and demerits of the four ‘Labour Codes’ in the context of labour market reforms in India. What has been the progress so far in this regard?”

  • How the Supreme Court ruling redefined ‘industry’

    Why in the News

    A nine-judge Constitution Bench of the Supreme Court revisited the definition of “industry” laid down in Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978), examining how that definition interacts with the term “industry” as newly defined under the Industrial Relations Code, 2020. The 1978 ruling had given “industry” a wide, functional definition covering any organised activity involving cooperation between employer and employee for producing goods or services, regardless of profit motive. The Industrial Relations Code, 2020 narrows this definition by carving out specific exclusions. The Bench’s majority and minority opinions diverge on whether Parliament’s narrower statutory definition can override the Bangalore Water Supply test for constitutional purposes.

    What did the Bangalore Water Supply test originally hold?

    1. Triple test for “industry”: The 1978 ruling held that any activity involving systematic cooperation between an employer and workers to produce or distribute goods or services qualifies as an industry, irrespective of whether the entity is charitable, religious, sovereign, or run by the government.
    2. Sovereign function exception, narrowly read: The 1978 Bench exempted only inalienable sovereign functions of the State, such as legislation, defence, and the administration of justice, from the definition.
    3. Wide coverage of welfare and professional bodies: The test brought hospitals, educational institutions, and clubs employing staff within the definition of “industry,” extending industrial-dispute protections to their employees.
    4. Persistent legislative attempts to narrow it: Parliament had earlier attempted to codify a narrower definition through an amendment that was never brought into force, leaving the 1978 test operative for over four decades.

    What does the Industrial Relations Code, 2020 change?

    1. Statutory definition narrows the exclusions: The Industrial Relations Code, 2020 (the law consolidating the Trade Unions Act 1926, the Industrial Employment (Standing Orders) Act 1946 and the Industrial Disputes Act 1947 into a single code) defines “industry” with specific carve-outs for institutions engaged in charitable, social, or philanthropic services not for profit.
    2. Government departments performing sovereign functions excluded: The Code writes into statute an exclusion for departments discharging sovereign functions, aligning more closely with a narrower reading than the 1978 test.
    3. Domestic and hospital work carved out selectively: The Code excludes certain categories, such as purely domestic service, while leaving other categories, including some hospitals, to be decided case by case.

    Where do the majority and minority views diverge?

    1. Majority view on legislative competence: The majority holds that Parliament may legislatively define “industry” for the purposes of a labour statute, and that a narrower statutory definition prevails over the judicially evolved 1978 test within the Code’s own field of operation.
    2. Minority view on protective intent: The minority holds that a legislative narrowing of “industry” risks excluding workers in charitable, educational, and welfare institutions from industrial-dispute protections that the 1978 Bench extended to them.
    3. Divergence on precedent’s continuing force: The majority treats Bangalore Water Supply as persuasive but non-binding once Parliament legislates a definition, while the minority treats it as continuing to bind interpretation of undefined terms outside the Code’s specific carve-outs.

    Conclusion

    The ruling settles, for now, that Parliament’s statutory definition of “industry” under the Industrial Relations Code, 2020 governs disputes falling within the Code, narrowing the wide protective sweep the Bangalore Water Supply test had given workers across charitable, educational and welfare institutions for over four decades. Litigation over which specific institutions fall inside or outside the Code’s carve-outs is expected to continue as the Code is implemented.

    Back2Basics: Industrial Relations Code, 2020

    1. One of the four labour codes consolidating 29 central labour laws, this one merging the Trade Unions Act, 1926, the Industrial Employment (Standing Orders) Act, 1946, and the Industrial Disputes Act, 1947.
    2. Raises the threshold for prior government permission before layoffs, retrenchment or closure from 100 to 300 workers in an establishment.
    3. Introduces a statutory recognition mechanism for trade unions and a two-member negotiating council where no single union has majority membership.
    4. Notified but implemented in phases, with States framing their own rules under it.

    Matching Previous Year Question

    “[2024, GS3, 15 marks] Discuss the merits and demerits of the four ‘Labour Codes’ in the context of labour market reforms in India. What has been the progress so far in this regard?”

  • Triple test, adrift

    Why in the News

    On 20 August 2026, a nine judge Bench of the Supreme Court of India delivered a judgment on the correctness of the ruling in Bangalore Water Supply and Sewerage Board vs A. Rajappa (1978). That 1978 judgment laid down the “Triple Test” for what counts as an “industry” under Section 2(j) of the Industrial Disputes Act, 1947. The present Bench left the Triple Test standing for all pending disputes under the older Act. A majority of the same Bench also ruled that the 1978 judgment will not be a “sheet anchor” for interpreting Section 2(p) of the Industrial Relations Code, 2020. The tension is that Section 2(p) itself reproduces much of the Triple Test’s essence, so an interpretive framework has been severed from a provision that continues to embody it.

    What is the “Triple Test” on what counts as an “industry”?

    1. The three conditions: An activity qualifies as an industry where three conditions are met together: a systematic activity, employer-employee cooperation, and production or distribution of goods and services to satisfy human wants other than those that are purely religious or spiritual.
    2. Profit is irrelevant: Profit motive plays no part in the determination. What matters is the nature of the activity itself, so a loss making or non-commercial body can still be an industry.
    3. The single exclusion: Only “sovereign functions” stand outside the definition, which is a narrow carve out rather than a general exemption for the State.

    How did the reference reach a nine judge Bench?

    1. The origin: The Triple Test was laid down in the 1978 judgment, which read Section 2(j) of the Industrial Disputes Act, 1947 expansively.
    2. The doubt: A five judge Bench in State of U.P. vs Jai Bir Singh (2005) raised a doubt about that definition.
    3. The escalation: A seven judge Bench then sent the question to the current nine judge Bench.
    4. The statute changed while the reference was pending: The Industrial Disputes Act, 1947 was repealed on 21 November 2025, when the Industrial Relations Code, 2020 came into force.
    5. The Bench therefore faced two statutes: It had to decide the status of the Triple Test both for disputes still pending under the repealed Act and for interpretation of the successor provision, which is why the ruling splits along those two lines.

    What did the majority and the dissent hold?

    1. Pending disputes are unaffected: The Bench, led by the Chief Justice of India, left the Triple Test standing for all pending disputes under the older Industrial Disputes Act, 1947.
    2. The anchor was removed for the new Code: A majority of the nine judge Bench ruled that the 1978 judgment will not be a “sheet anchor” for interpreting Section 2(p) of the Industrial Relations Code, 2020.
    3. The dissent went further than disagreement: The dissenting opinion held that the reference itself was unnecessary and that the Triple Test requires no interference at all.
    4. The dissent was not isolated: That view was shared by three other judges on the Bench, so the split on the reference question was narrow rather than lopsided.

    Why does an expansive definition of “industry” matter more now than in 1978?

    1. The workforce has moved: Since 1978, and particularly after the liberalisation and privatisation reforms of 1991, a far higher number of workers have moved to the private sector, out of the security of public employment.
    2. Security no longer comes from the employer: For a worker outside public employment, statutory coverage rather than employment status is what provides protection.
    3. Definition decides access: Whether an establishment is an “industry” determines whether its workers can raise an industrial dispute at all, so the definition is the gateway to every protection that follows.
    4. Most of the workforce is outside formal protection: About 90 per cent of India’s workforce is informal, and nearly 58 per cent of salaried workers still lack a written contract.
    5. The expansive reading is therefore a bulwark: An expansive definition of industry is more necessary now than it was in 1978, precisely because the cushion of public employment has shrunk.

    Was the Triple Test a pro-labour device or a framework for industrial peace?

    1. It was not merely pro-labour: The Triple Test was not only a device for extending worker protection, though it is usually described that way.
    2. It brought restrictions with it: An expansive definition of industry brought with it not just the protections of the Industrial Disputes Act, 1947 but also its restrictions.
    3. The employer gained a defined route: It gave employers a regulated route to retrenchment and closure, rather than leaving those decisions to be contested without a framework.
    4. Workers accepted a limit in return: It carried a bar on workers striking at will, so the coverage came with a procedural discipline on industrial action.
    5. The net effect was industrial peace: In essence the Triple Test allowed for industrial peace rather than worker welfare alone, which is what makes its removal a loss to both sides rather than to one.

    Why is setting the 1978 judgment aside difficult to justify?

    1. The successor provision did not change the test: Section 2(p) of the Industrial Relations Code, 2020 does not move away from the Triple Test formula and reproduces much of its essence.
    2. The reasoning does not follow: It is therefore difficult to understand why the 1978 judgment has to be set aside when Section 2(p) itself comes up for interpretation.
    3. A framework, not just a precedent, was cut away: Severing that principle from the Code cuts away the interpretive framework that allowed such disputes to be resolved at all.
    4. Two footings now coexist: Pending disputes under the repealed Act will be decided on the Triple Test, and disputes under the Code will be decided without it as an anchor, on a definition that says much the same thing.
    5. The burden shifts to the lower courts: It is now incumbent upon courts and tribunals to ensure that a change of statute is not read as a change of intent, and they must do so with the anchor removed.

    Challenges to the definition of “industry” under the Industrial Relations Code, 2020

    1. Litigation will restart from zero: With the 1978 judgment displaced as the anchor, every category of establishment settled over four decades becomes arguable again. Eg. Hospitals, educational institutions and charitable bodies were brought within the definition on the strength of that judgment. Fix. Insert a statutory explanation to Section 2(p) listing the categories expressly included and excluded, so the question is settled by text rather than by fresh litigation.
    2. The “sovereign functions” exclusion has no statutory boundary: The carve out is judicially defined, so its width expands or contracts with each ruling rather than by legislative choice. Eg. Municipal and public utility bodies performing statutory duties have repeatedly contested their status as industries. Fix. Define sovereign functions in the Code by reference to a listed set of constitutional functions.
    3. Threshold changes shrink the protected group: Raising the retrenchment and closure approval threshold reduces how many workers the framework covers regardless of how “industry” is defined. Eg. The Industrial Relations Code, 2020 raises the closure and retrenchment threshold from 100 to 300 workers. Fix. Pair the higher threshold with a statutory retrenchment compensation escalator and a funded reskilling entitlement.
    4. Platform and contract work sits outside the frame: The employer-employee cooperation limb assumes an identifiable employer, which app-mediated and multi-layered contract work does not supply. Eg. Aggregator platforms classify workers as partners rather than employees, which places them outside the industrial dispute route. Fix. Deem an aggregator to be the principal employer for the purpose of dispute resolution where it controls pricing and task allocation.
    5. Two parallel regimes will run for years: Pending disputes under the repealed Act and new disputes under the Code will be decided on different interpretive footings for as long as the backlog lasts. Eg. Industrial disputes routinely take a decade or more to reach final decision. Fix. Issue a transitional provision directing that Section 2(p) be construed consistently with the settled position under Section 2(j) for a stated period.
    6. Tribunal capacity has not been strengthened: A framework that shifts interpretive burden to tribunals fails where those tribunals are understaffed and slow. Eg. Industrial tribunals and labour courts carry long standing vacancies alongside a large pending case load. Fix. Fill sanctioned tribunal posts on a fixed calendar and publish disposal timelines for industrial dispute references.

    Conclusion

    The nine judge Bench preserved the Triple Test where it no longer decides much and removed it where it would have decided most. The relationship between the successor provision and the test, set out above, is what makes that split hard to defend. The dissenting view, that the reference was unnecessary and the test required no interference, is the more coherent reading of a workforce that has moved into private employment since 1978 and needs an expansive definition more, not less. It now falls to courts and tribunals to ensure that a change of statute is not read as a change of intent, without the anchor that would have made that straightforward.

    “[2024, GS3, 15 marks] Discuss the merits and demerits of the four ‘Labour Codes’ in the context of labour market reforms in India. What has been the progress so far in this regard?”

  • In a 5-4 ruling, Supreme Court for tweaking the definition of industry, exempts pending matters

    Why in the News

    A nine-judge Bench of the Supreme Court held on 20 August 2026, by a 5:4 margin, that the expansive 1978 interpretation of the term industry will not govern the Industrial Relations Code, 2020. The ruling preserves that interpretation for disputes already pending under the Industrial Disputes Act, 1947 and withdraws it from every case that follows.

    What is the ‘triple test’ laid down in Bangalore Water Supply (1978)?

    1. Origin: A seven-judge Constitution Bench in Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978), authored by Justice V.R. Krishna Iyer, read Section 2(j) of the Industrial Disputes Act, 1947 expansively.
    2. The three conditions: An undertaking qualifies as an industry where there is systematic activity, organised by cooperation between employer and employee, for the production or distribution of goods or services calculated to satisfy human wants and wishes.
    3. What the test ignores: Profit motive is irrelevant to the classification. Purely spiritual or religious activity stays outside the definition.
    4. Reach: The test brought hospitals, educational institutions and municipalities within the fold of industry, exempting only core sovereign activities such as the judiciary, law and order and defence, in order to protect the state’s functional autonomy.

    What is the Industrial Relations Code, 2020?

    1. About: The Industrial Relations Code, 2020 consolidates the law on trade unions, standing orders and the settlement of industrial disputes into a single statute, and came into force in November 2025.
    2. The operative provision: Section 2(p) of the Code carries its own definition of industry, taking over the function that Section 2(j) of the 1947 Act performed for 48 years.

    What did the Supreme Court actually hold on the reach of the 1978 definition?

    1. A clean slate for the new Code: The majority held that industry under Section 2(p) of the Industrial Relations Code, 2020 would not be burdened by the 1978 interpretation of Section 2(j) of the 1947 Act.
    2. No sheet anchor: The Chief Justice of India stated that the 1978 judgment and its conclusion would not act as the sheet anchor or the foundation for any future interpretation of Section 2(p).
    3. A refinement, not a reversal: The majority found that the essential framework of the 1978 interpretation had withstood the test of time, and that some of its constituent elements could have been articulated differently to better reflect the scope and contours of Section 2(j).
    4. Prospective operation: The refined triple test evolved in the opinion of the Chief Justice of India will operate prospectively, and the modified definition will not apply to pending cases.
    5. Pending disputes protected: All matters presently pending before courts, tribunals and labour authorities under the Industrial Disputes Act, 1947 are to be adjudicated in accordance with the triple test as laid down in Bangalore Water Supply.
    6. Maintainability settled: The majority held that the reference questioning the correctness of the 1978 ruling was maintainable.
    7. Text still awaited: The fine print of the ruling prescribing the new formulation of the definition has not yet been released.

    Why was the 1978 definition sent to a nine-judge Bench at all?

    1. Docket explosion: Later Benches found that the 1978 definition produced what they called a docket explosion, bringing far more cases to the labour courts.
    2. A failed legislative narrowing: Parliament attempted to narrow the definition through the Industrial Disputes (Amendment) Act, 1982, excluding several organisations from its scope.
    3. The 2005 admission: The Centre told the Court in 2005 that no alternative dispute resolution mechanism existed for employees who would fall outside the amended definition, so the 1978 position continued to hold.
    4. Divergent readings: Subsequent rulings interpreted the 1978 judgment differently, and the case was referred to a nine-judge Bench for reconsideration.

    What three questions did the reference place before the Bench?

    1. Correctness of the test: Whether the test laid down in Bangalore Water Supply remains the correct interpretation of industry, and whether later legislative developments have any bearing on it.
    2. Welfare schemes: Whether welfare schemes run by the government count as an industrial activity.
    3. Sovereign function: What constitutes a sovereign function of the state, and whether such functions fall outside the ambit of labour law altogether.
    4. When framed: The Court identified these three broad questions for consideration in February 2026.

    Why does preserving the 1978 test only for pending cases divide the workforce in two?

    1. Two regimes running side by side: A dispute already filed under the 1947 Act is decided on the wide 1978 definition. An identical dispute arising under the Code is decided on a definition that has not yet been written out.
    2. The Court’s own reason: The majority stated that it did not intend to displace the governing legal position on pending proceedings, since doing so would create artificial discrimination.
    3. What the wide net secured: The 1978 definition enabled workers across a wide range of jobs to obtain legal recourse on wages, working hours, strikes, collective bargaining and protection against arbitrary dismissal.
    4. What the clean slate removes: Workers whose disputes arise after the Code’s commencement lose the settled presumption that their workplace is an industry, and must establish it afresh under Section 2(p).

    What does the dissent argue about the State as an employer?

    1. Reference itself questioned: Justice B.V. Nagarathna found the reference against the 1978 verdict unwarranted and not maintainable, and held that the ruling required no interference or modification.
    2. Identity of the employer is irrelevant: The dissent held that merely because a function is performed by the State, it cannot be exempted from the definition of industry, so the test of who carries out the activity is not relevant.
    3. Nature of the activity governs: Social welfare activities and schemes undertaken by government departments or their instrumentalities can be construed as industrial activities for the purpose of Section 2(j), depending on the nature of the activity and all other relevant factors.
    4. Why it matters now: The dissent held that it was important, now more than ever, to retain the inclusive definition of industry to safeguard workers’ rights.
    5. Split within the majority side: Justice Joymalya Bagchi recorded disagreement with the majority on the reformulation of the triple test, and Justices Dipankar Dutta and Ujjal Bhuyan wrote dissenting opinions.

    What challenges follow from redefining ‘industry’ under the new Code?

    1. Coverage uncertainty until the operative text arrives: The modified formulation was pronounced without the wording that prescribes it being available, so adjudicating authorities have no text to apply. Eg. The hour-long pronouncement on 20 August 2026 ended with the fine print of the new formulation still awaited.
    2. Identical workplaces treated differently by filing date: The cut-off is the date of the proceeding, not the nature of the work, so two workers in the same undertaking can face different definitions. Eg. A dispute in a municipal water supply undertaking filed under the 1947 Act is decided on the triple test, and one arising afterwards is not.
    3. No fallback forum for excluded categories: Narrowing the definition removes workers from the industrial adjudication machinery without putting anything in its place. Eg. The Centre itself told the Court in 2005 that no alternative dispute resolution mechanism existed for employees who would fall outside a narrowed definition.
    4. Threshold effects that discourage firms from growing: The Code applies its stricter obligations only above stated headcounts, which gives firms a reason to stop hiring below the line. Eg. Standing orders now apply at 300 employees and prior approval for layoff, retrenchment and closure applies at 300 workers, both raised from far lower thresholds.
    5. The sovereign function boundary left to case-by-case litigation: The Court has framed the question of what a sovereign function is without settling a workable test for it. Eg. Whether a government-run welfare scheme is an industrial activity was one of the three questions placed before the Bench in February 2026.
    6. A definition built for a standard employment relation: The triple test turns on cooperation between employer and employee, which platform-mediated work does not fit. Eg. Gig and platform workers are addressed through the Code on Social Security, 2020 rather than through the industrial dispute machinery.

    Conclusion

    The Court has separated the past from the future of a single statutory term, keeping Justice Krishna Iyer’s wide definition alive for disputes already in the system and denying it any authority over the Code that now governs Indian industrial relations. The substantive contest has therefore moved from the judiciary to the text of Section 2(p) and to whoever interprets it first. The Industrial Relations Code, 2020 has been in force since November 2025, and the next milestone is the release of the full text of the judgment carrying the refined formulation of the triple test.

    “[2024, GS3, 15] Discuss the merits and demerits of the four ‘Labour Codes’ in the context of labour market reforms in India. What has been the progress so far in this regard?”

  • With a Page Out of China’s Book, TN Maintains Lead in Share of Women Workers

    Why in the News:

    New data from the Ministry of Statistics and Programme Implementation (MoSPI) on India’s 46 most populous cities places Coimbatore and Madurai at the top of the female labour force participation rate (FLFPR) rankings, with Tamil Nadu holding nearly half the country’s women employed in electronics manufacturing. States with comparable industrial investment, such as Karnataka and Maharashtra, show far lower and declining shares, sharpening the question of what specifically converts factory investment into women’s employment.

    What does the MoSPI data show about Tamil Nadu’s lead in female employment?

    1. City rankings: Coimbatore records an FLFPR of 41.3% and Madurai 37%, both above the urban India average of 27.7%; Surat ranks between them at 40.6%.
      • Term: Labour Force Participation Rate (LFPR): The percentage of people either employed or actively looking for work.
    2. Electronics manufacturing share: Tamil Nadu’s share of women employed in computer, electronics and optical products manufacturing rose from 20% to 43% between 2013 to 2014 and 2023 to 2024, as per the Annual Survey of Industries.
    3. Divergent state trends: Gujarat’s women’s share in electronics manufacturing remained at 10% over the same decade; Maharashtra’s fell from 24% to 6%, and Karnataka’s from 11% to 8%.
    4. Overall factory employment: Tamil Nadu accounted for 14,814 of the 34,531 women directly employed nationally in electronics manufacturing in 2023 to 2024, and holds the largest state share of all women employed in factories at 40% in 2023 to 2024, down slightly from 43% in 2021 to 2022.

    Why has housing infrastructure become the deciding factor, not industrial investment alone?

    1. Housing as the binding constraint: Housing is cited as the single issue causing 80% of women to decline job offers, according to the Udaiti Foundation.
    2. Two hostel models: The Tamil Nadu Working Women’s Hostels Corporation runs large SIPCOT linked industrial dormitories alongside smaller Thozhi hostels of 100 to 150 beds. The 19 existing Thozhi hostels operate at 87% occupancy and are expected to expand to 46 within two years.
    3. Housing as economic infrastructure: The state treats women’s hostels as economic infrastructure rather than welfare spending, reducing employers’ need for separate mobility infrastructure and improving retention of migrant labour.
    4. Concentration in two states: Almost half of India’s working women’s hostels are located in Tamil Nadu and Kerala, according to a December 2024 ICRIER paper.

    Is the model being replicated elsewhere, and does hostel capacity alone explain the outcome?

    1. Kerala’s shortfall: Despite similar hostel infrastructure, Kerala’s share of women in electronics manufacturing declined from 8% to 6% between 2013 to 2014 and 2023 to 2024, showing that housing alone does not create an electronics manufacturing base.
    2. Karnataka’s reactive catch up: Foxconn’s Devanahalli plant hired around 30,000 workers, nearly 80% women, and began expanding dormitory facilities only after recruitment.
    3. China comparison unsubstantiated: The comparison with China’s women led electronics manufacturing model is presented as a framing device and is not supported by comparative evidence in the report.

    Does a rising employment share also mean better quality jobs?

    1. Wage gap: The average monthly wage for salaried women in Chennai was Rs 22,919 in 2025, below the average for million plus cities of Rs 23,707. Wages were lower in Coimbatore (Rs 19,149) and Madurai (Rs 18,247).
    2. Sectoral wage gap: The average annual wage per worker in Tamil Nadu’s electronics manufacturing was Rs 2.45 lakh in 2023 to 2024, slightly below the all India average of Rs 2.5 lakh and well below Telangana’s Rs 4.46 lakh.
    3. Fast growth from a low base: Tamil Nadu’s wages increased by 83% between 2013 to 2014 and 2023 to 2024, more than double the all India average growth of 36%, though behind Delhi, Puducherry, Madhya Pradesh, Goa, and Uttarakhand.
    4. Restrictive hostel norms: Hostels are reported to have restrictive rules, and factories have historically been reluctant to hire married women.
    5. Data undercount: The MoSPI dataset covers only cities with populations above 10 lakh as per Census 2011, excluding newer industrial hubs such as Hosur, Erode, and Oragadam.

    Conclusion:

    Tamil Nadu’s leadership is driven by a deliberate policy of treating women’s housing as economic infrastructure rather than welfare, enabling higher female participation in manufacturing. However, employment gains remain concentrated in relatively low wage, hostel based jobs with continuing social restrictions, while official statistics understate the model’s reach by excluding newer industrial centres. Whether this approach can expand beyond electronics manufacturing and improve job quality and wages remains an open question.

  • Discuss the merits and demerits of the four ‘Labour Codes’ in the context of labour market reforms in India. What has been the progress so far in this regard?

    The Central Government consolidated 29 existing central labour laws into four codes to simplify the legal framework, improve ease of doing business.

    4 Labour codes-

    Code on Wages

    Industrial Relations Code

    Code on Social Security

    Occupational Safety, Health and Working Conditions Code

    Merits

    Merging and Simplification of laws reduces complexity and overlaps.

    Uniform definitions & wage protections: Eg- code on Wages introduces a floor wage

    Flexibility in hiring/retention: IR Code raises the threshold for requiring government approval for layoffs/closures from 100 to 300 workers.

    Broader social security coverage: SS Code covers gig workers, platform workers, unorganised sector. (presently only 25%)

    Improved safety and working conditions: OSHWC mandates working hours, safety standards, migrant worker welfare.

    Promoting formalisation through clearer rules and digital compliance systems.

    Minimise exploitative practices – Eg: provision for overtime wages twice normal wages

    Easier resolution of industrial disputes – Eg: 14 days’ notice period before strikes & lockdowns

    Demerits

    Transition and Adaptation Challenges as India’s labour market is 90% informal, contributing nearly 50% of GDP

    Weakened collective bargaining: IR Code imposes stricter conditions on strikes (60 days’ notice).

    Job-security concerns: Increased flexibility may lead to precarious employment. Eg- fixed-term employment, easier layoffs

    Increased burden on SMEs: Eg- requirements such as documentation of wages, benefits, safety norms, etc..

    Inconsistent Application Across Sectors – agriculture (60% of informal workforce) and construction (~50 million workers) face seasonal work, casual labour, and absence of contracts

    Rising Costs for Businesses

    Gratuity obligations

    PF contributions

    Maternity benefits (26 weeks paid leave + crèche facilities)

    Progress So Far

    All four codes are legally enacted between 2019-20.

    34 States and UTs have notified draft rules but full implementation is pending.

    The Centre has initiated digital portals (e-Shram, unified labour compliance) to support implementation.

    Resistance from trade unions and worker groups continues. Eg- strikes by AITUC and CPI

    Labour is a concurrent subject – state-level variation persists.

    Enforcing labour codes can bring in transparency, simplification & digitization in compliance. This can help India to become a manufacturing hub as companies adopt the “China+1” strategy.