The Code on Social Security, 2020, mandates social security coverage for all workers, including gig and platform workers. All workers are to get PF, ESIC, insurance, and other social security benefits. Similarly, The Code on Wages, 2019, makes statutory provisions for minimum wage payment, which, along with provisions of timely payment, will ensure financial security. Earlier, the minimum wages applied only to scheduled industries and a large section of workers remained outside the purview of the labour laws.

According to the SBI Research report ECOWRAP, the new codes will boost the share of formalisation in the labour force by at least 15%, social sector coverage to 85%, and employment and consumption by 7.7 million and ₹75,000 crore, respectively, over the medium term. It notes that around 440 million Indians are employed in the unorganised sector. “Out of which, around 310 million unorganised workers are registered under the eShram portal. By assuming 20% will shift from informal to formal payroll, it will benefit around 100 million beneficiaries,” the report states.

It expects India’s social security coverage to reach 80-85% in the next two to three years. “This, after a short transition phase, could reduce unemployment by up to 1.3% over the medium term, implying additional employment generation of 7.7 million people based on the current labour force participation rate (15+ years) at 60.1% and average working age population at 70.7% across rural and urban workforce,” it notes.

With a saving rate of around 30%, the implementation will result in a major consumption boost of ₹66 per person per day. “This could lead to a consumption boost of nearly ₹75,000 crore,” the research report reads.

While the codes are now in force nationwide, supporting rules under both central and state jurisdictions are yet to be notified. The government will engage the public and stakeholders in the framing of the corresponding rules, regulations, and schemes under the codes. During transition, the relevant provisions of the existing labour acts and their respective rules, regulations, notifications, standards, and schemes, among others, will continue to be in force, the government said.

New labour codes

Labour reforms pick up speed with notification of new labour codes