Lacunae in India’s Labour Policy

Introduction

Across many sectors, workers face unstable jobs, reclassification, and lost benefits. Informality is widespread. Forced and coercive work still exists. The draft Shram Shakti Niti 2025 promises a fair, inclusive, and future-ready system. It links social security, safety, skills, and digital tools. The real question is delivery: will protections reach informal, gig, and low-literacy workers, or stay on dashboards? The answer depends on funding, enforcement, and worker voice.

Current Status of India’s Labour Force

• About 90% of workers are informally employed (2024 ILO).
• Around 11 million people live in modern slavery in India.
• Female labour force participation is 33.7%, with a target of 35% by 2030.
• 12 million workers are in gig work. Around 400 million workers are in the informal economy.
• Skills–jobs alignment: Graduate-job mismatch is 91.75%.
• Digital access constraint: Low household literacy (about 38%, as stated) limits the access to digital systems.

Constitutional Provisions for Labour Protection

Fundamental Rights

Article 19(1)(c): Guarantees the right to form associations and unions, which includes the right to form trade unions.

Article 21: The “Right to Life” has been interpreted by the courts to include the right to a dignified life, which encompasses a safe working environment, fair wages, and the right to a livelihood.

Article 23: Prohibits traffic in human beings and forced labor, ensuring that no individual can be forced to work against their will or in conditions that violate their dignity.

Article 24: Prohibits the employment of children below the age of 14 in factories, mines, or any other hazardous employment.

Article 17: Prohibits untouchability, which helps protect workers from discrimination and exploitation based on caste, particularly those from Scheduled Castes and Tribes.

Directive Principles of State Policy

Article 38: Mandates the state to promote the welfare of the people by securing and protecting a social order in which justice, social, economic, and political, shall inform all the institutions of the national life.

Article 39: Lays down certain principles to be followed by the state, including:

(a) That citizens, men and women equally, have the right to an adequate means of livelihood.

(d) Equal pay for equal work for both men and women.

Article 41: Guarantees the right to work, to education, and to public assistance in certain cases like unemployment, old age, sickness, and disablement.

Article 42: Directs the state to make provisions for just and humane conditions of work and for maternity relief.

Article 43: Aims to secure a living wage for all workers.

Article 43A: Provides for the participation of workers in the management of industries.

Draft Shram Shakti Niti 2025 (National Labour & Employment Policy)

It is  national labour and employment policy that seeks a “fair, inclusive, and future-ready labour ecosystem,” aligning constitutional guarantees with a changing world of work.

Key features

1. Universal Social Security Coverage
   It proposes a portable Universal Social Security Account that merges the Employees’ Provident Fund Organisation (EPFO), Employees’ State Insurance Corporation (ESIC), Pradhan Mantri Jan Arogya Yojana (PM-JAY), the e‑SHRAM platform and State boards so that a worker’s health, pension, maternity, accident and life-insurance benefits travel across jobs and sectors.
2. Employment Facilitation & Future Readiness
   The policy envisions the Ministry acting as an employment facilitator, using the National Career Service (NCS) as a Digital Public Infrastructure (DPI) for job-matching, credential verification and skill-alignment across Tier-II/III cities and MSMEs, blending skill development with employment.
3. Occupational Safety, Health & Humane Working Conditions
   It commits to the full enforcement of the Occupational Safety, Health and Working Conditions Code, 2020, with risk-based audits, gender-sensitive standards, and the ambition of “near-zero fatalities by 2047”, aligned with ILO standards.
4. Women’s & Youth Empowerment
   It sets a target for female labour force participation of 35 % by 2030, up from 33.7 %. Initiatives include affordable childcare, flexible gig work options, equal pay, and apprenticeships. It also emphasises youth entrepreneurship, credential recognition and tackling a 91.75% graduate‐job mismatch.
5. Technology, Green Jobs & Just Transition
   The policy promotes green-technology employment, reskilling of workers (for example those in coal sectors), AI-enabled workplace safety, and climate-aligned labour transitions under SDG 13. It opens paths to “just transition” for affected workers.
6. Ease of Compliance & Formalisation
   It introduces a single-window, digital compliance architecture for MSMEs, a unified labour-&-employment stack, and aims to increase formalisation of the labour market, simplify registration and strengthen inspections.
7. Governance & Data-Driven Monitoring
   The policy includes the creation of a Labour & Employment Policy Evaluation Index (LPEI), real-time dashboards, an Annual National Labour Report, and the linking of policy implementation with the digital agenda (Digital India, NEP etc.). This aims for transparency, tracking and continuous improvement.

Concerns Related to National Labour and Employment Policy of India

1. Employer-ease policy: Policies prioritise employer convenience over worker rights. This undercuts Articles 14, 16, and 23 and normalises informality. For example ,Workers recruited with ESI and PF promises are later reclassified as “daily wagers,” losing contributions.

2 Unfunded social security architecture: The proposed Universal Social Security Account has no clear funding path. There are no mandates on gig employers or matching contributions from States. Without money in the system, portability becomes a promise on paper.

3. Digital-first design that excludes: A digital-ID heavy approach sidelines workers with low literacy and limited access. Women, seniors, and low-literates are most at risk. Offline access and assisted enrolment are not hard-wired, so exclusion persists.
4. Weak safety enforcement and soft targets: The pledge of “near-zero fatalities by 2047” lacks penalties, inspectors, and timelines. Risk audits and gender-sensitive standards are announced, but without enforcement muscle they do not change conditions on shop floors.
5. AI-led placement without bias guardrails: Turning the Ministry into an AI-based employment facilitator without bias safeguards risks caste and gender discrimination. Algorithms for job matching and credential checks need ethics audits and worker oversight; today, these are missing.
6. Gig work outside wage protection: “Flexibility” is used to avoid wage floors and benefits. Wages Code minima are not applied to gig workers, and transition benefits are unclear. This keeps a large, growing segment precarious and voiceless.
7. Women’s participation: targets without tools: The 35% FLFP by 2030 target is paired with childcare and apprenticeships, but no quotas, penalties, or robust maternity support for informal workers. Without enforceable instruments, progress will be nominal.
8. Data rights and surveillance risks: Dashboards, LEPEI-style indexing and interoperable registries advance data-driven control while DPDP enforcement is weak. This raises surveillance concerns and can chill Article 19 freedoms in hiring, organising, and grievance processes.

Way forward

1. Fund universal social security: Mandate platform-employer and State contributions. Create a tripartite fund so benefits under the unified account are actually paid.
2. Enforce safety: Notify penalties, strengthen inspectors, and set time-bound safety milestones while implementing the OSH Code with risk-based audits.
3. Guarantee offline and assisted access: Provide walk-in/assisted services at district centres and mobile camps so low-literacy workers, women, and seniors can enrol and use benefits.
4. Protect gig and platform workers’ pay and continuity: Apply wage floors to platform work and define transition benefits (injury, sickness, downtime) within the unified social security design.
5. Make AI job-matching fair and auditable: Require bias testing, independent audits, and a clear appeals path for NCS decisions to prevent caste- or gender-based exclusion.
6. Restore worker voice and speedy grievance redress: Formalise union/worker participation in policy pilots and audits, and run time-bound grievance systems with public tracking of outcomes.

Conclusion

The draft brings social security, safety, skills, and data onto one platform. Outcomes now depend on money, penalties, offline access, fair algorithms, just-transition income support, and worker voice. With these in place, delivery is possible. Without them, dashboards will grow—but workers will not be safer, formal, or secure.

Question for practice:

Examine the key challenges in implementing the Draft Shram Shakti Niti 2025 as an inclusive and enforceable labour policy for India’s informal and gig workforce.

Source: The Hindu