Economic Survey promises, impact of new labour codes
The Economic Survey 2025-26 projects that India's new labour codes will significantly increase formalisation, create 77 lakh jobs, and boost GDP by 1.25% by 2029-30. However, the article argues that these optimistic projections overlook the realities of India's informal workforce, where over 80% of workers are unprotected. The codes raise thresholds for protections and promote 'fixed-term employment,' which undermines job security. Issues like unclear rules for gig worker schemes, reskilling funds, and minimum wage methodology, along with the weakening of labour inspections, suggest that the codes may not genuinely improve workers' lives or reduce informality.
Key Points
- The Economic Survey 2025-26 optimistically projects that new labour codes will boost formalisation, job creation, and GDP growth.
- The codes raise thresholds for defining 'factory' and 'contract labour,' potentially making it easier for firms to avoid permanent employment.
- The promotion of 'fixed-term employment' under the codes undermines job security, a key feature of formal work.
- Ambiguities exist regarding rules for gig worker contributions, reskilling funds, and the methodology for setting national floor and minimum wages.
- The rebranding of labour inspectors as 'Inspector-cum-Facilitators' is seen as weakening enforcement and accountability, potentially allowing employers to compound violations.
Exam Facts
- The Economic Survey 2025-26 projects formalisation to increase from 60.4% to 75.5%.
- It projects the creation of 77 lakh jobs and a 1.25% contribution to GDP by 2029-30.
- The Occupational Safety, Health and Working Conditions Code raises the definition of a 'factory' from 10 to 20 workers (with power).
- Platform companies are required to contribute 1%-2% of annual turnover for gig worker schemes.
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