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18 Dec 2025·Source: The Indian Express
3 min
EconomySocial IssuesPolity & GovernanceEDITORIAL

India's New Labour Codes: A Rollback of Worker Protections or Economic Reform?

Editorial critically analyzes new labour codes, arguing they roll back worker protections.

India's New Labour Codes: A Rollback of Worker Protections or Economic Reform?

Photo by Museums Victoria

संपादकीय विश्लेषण

The author critically assesses India's new Labour Codes, arguing that despite their stated aim of simplification and modernization, they largely represent a "rollback" of key worker protections and disproportionately favor employers, particularly at the expense of informal sector workers.

मुख्य तर्क:

  1. The new Labour Codes, while consolidating 29 laws into four, introduce higher thresholds for applicability, effectively excluding a vast majority of workers, especially in the informal sector, from crucial social security benefits like gratuity, provident fund, and health insurance.
  2. The codes make it easier for employers to hire and fire workers by increasing the threshold for government approval for retrenchment (from 100 to 300 workers), thereby weakening job security and collective bargaining power.
  3. The promotion of fixed-term employment and the dilution of regulations for contract labour further precariousize work, reducing the benefits and stability traditionally associated with permanent employment.

प्रतितर्क:

  1. The government argues that the codes will simplify the complex labour landscape, attract investment, boost manufacturing, and create more jobs by improving the ease of doing business.
  2. Proponents also claim the codes aim for universal social security coverage, even if the implementation details are debated.

निष्कर्ष

The author concludes that while the new Labour Codes aim for simplification and economic growth, their current structure risks diluting essential worker protections and exacerbating the vulnerabilities of the informal sector. He calls for a re-evaluation to ensure a more balanced approach that prioritizes both economic growth and social justice for workers.

नीतिगत निहितार्थ

The implementation of these codes will significantly reshape India's industrial relations and labour market. It could lead to increased flexibility for businesses but potentially at the cost of worker welfare, necessitating careful monitoring and potential amendments to ensure equitable outcomes.

This editorial critically examines India's four new Labour Codes, arguing that they represent a significant rollback of key worker protections, particularly for informal sector workers. The author contends that while the government aims to simplify and modernize labour laws to boost industrial growth and ease of doing business, the codes disproportionately favor employers by making it easier to hire and fire, and by diluting collective bargaining rights.

The surprising fact is that despite claims of universal social security, the codes introduce thresholds that exclude a vast majority of workers, especially in the unorganized sector, from crucial benefits like gratuity, provident fund, and health insurance. This analysis is crucial for understanding the ongoing debate between economic liberalization and social welfare, a key area for UPSC aspirants studying economy and social justice.

मुख्य तथ्य

1.

Four new Labour Codes in India.

2.

Aim to simplify 29 existing laws.

3.

Concerns about dilution of worker protections.

4.

Increased thresholds for applicability of laws (e.g., 300 workers for prior government approval for retrenchment).

5.

Impact on informal sector workers.

6.

Concerns about fixed-term employment and contract labour.

7.

International Labour Organization (ILO) conventions mentioned.

UPSC परीक्षा के दृष्टिकोण

1.

Impact of economic reforms on social welfare and labour rights.

2.

Constitutional provisions related to labour (DPSP, Fundamental Rights).

3.

Challenges and opportunities in formalizing the informal economy.

4.

Role of the state in balancing industrial growth and social justice.

5.

Evolution of labour laws and trade union movements in India.

दृश्य सामग्री

और जानकारी

पृष्ठभूमि

India's labour laws have historically been complex, fragmented, and often criticized for being rigid, hindering industrial growth and formalization. Post-independence, laws were largely protective, influenced by socialist ideals and the need to safeguard workers' rights. However, with economic liberalization starting in 1991, there has been a growing demand for labour market flexibility to boost investment and ease of doing business. This led to the push for comprehensive labour reforms.

नवीनतम घटनाक्रम

The Indian government consolidated 29 central labour laws into four new Labour Codes: the Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020. These codes aim to simplify regulations, promote ease of doing business, and provide universal social security. However, their implementation has been met with significant debate, with critics arguing they dilute worker protections, particularly for the vast informal sector, by making 'hire and fire' easier and introducing thresholds for social security benefits.

बहुविकल्पीय प्रश्न (MCQ)

1. With reference to India's new Labour Codes, consider the following statements: 1. The new Labour Codes consolidate a large number of existing central labour laws into four main codes. 2. The Industrial Relations Code, 2020, has raised the threshold for requiring government permission for retrenchment or closure, making it easier for establishments to adjust workforce. 3. The Code on Social Security, 2020, aims to provide universal social security benefits to all workers, including those in the unorganized sector, without any eligibility thresholds. Which of the statements given above is/are correct?

उत्तर देखें

सही उत्तर: B

Statement 1 is correct. The four codes consolidate 29 central labour laws. Statement 2 is correct. The Industrial Relations Code, 2020, has increased the threshold for requiring government permission for retrenchment, layoff, or closure from 100 to 300 workers, providing greater flexibility to employers. Statement 3 is incorrect. While the Code on Social Security, 2020, aims for broader coverage, it introduces various eligibility thresholds for benefits like gratuity, provident fund, and health insurance, which effectively exclude a vast majority of workers, especially in the unorganized sector, from universal coverage as highlighted in the editorial.

2. In the context of social security for workers in India, which of the following statements is/are correct? 1. Article 41 of the Constitution of India mandates the state to make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement. 2. The Employees' Provident Funds and Miscellaneous Provisions Act, 1952, originally covered all establishments irrespective of their employee strength. 3. The concept of 'gig workers' and 'platform workers' has been explicitly included under the ambit of social security provisions for the first time in the new Labour Codes. Select the correct answer using the code given below:

उत्तर देखें

सही उत्तर: C

Statement 1 is correct. Article 41 is a Directive Principle of State Policy (DPSP) that guides the state in making provisions for social security. Statement 2 is incorrect. The EPF Act, 1952, initially applied to establishments employing 50 or more persons, later reduced to 20 or more. It did not cover all establishments irrespective of employee strength from its inception. Statement 3 is correct. The Code on Social Security, 2020, for the first time, explicitly defines and includes 'gig workers' and 'platform workers' within its framework, aiming to extend some social security benefits to them, although the implementation mechanisms and actual coverage remain a subject of debate.

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