New Delhi : India has long grappled with sluggish economic momentum, widespread corruption, and a persistent lack of accountability in job creation and labour welfare. Political agitations, frequent bandhs, and disruptions to industrial activity further eroded confidence, scaring away investors and weakening the manufacturing ecosystem. For years, labour welfare existed only in political speeches, not in sincere policy action.
The nation’s labour landscape began to transform only after a change in leadership. From the historic Red Fort, Prime Minister Narendra Modi articulated the resolve of “Shramev Jayate”—labour as the foundation of India’s growth. This was more than a rallying cry; it marked the birth of a renewed national mindset that put workers at the centre of India’s development roadmap.
A System Stuck in Time
India’s labour laws, many drafted between the 1920s and 1950s, were products of a colonial framework built to control—not empower—the workforce. Meanwhile, the global economy moved ahead rapidly. Digital platforms, gig employment, flexible work arrangements, and tech-driven enterprises reshaped the definition of labour worldwide. Yet India’s regulatory structure had remained virtually frozen, unable to support either modern industry or a future-ready workforce.
Through the panch pran (five vows), the Prime Minister urged the nation to discard colonial-era thinking. But outdated labour laws survived for decades primarily due to a lack of courage and political will.
As India’s global profile rose sharply under the current leadership—and as the world began to view India not just as a participant but a shaper of the future—the need for robust and contemporary labour reforms became unavoidable.
The Big Overhaul: Four Labour Codes
To unlock large-scale job creation, deepen formalisation, and guarantee social security for every worker, the government undertook one of independent India’s most sweeping reforms.
The earlier 29 separate labour laws were merged into four comprehensive labour codes:
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Code on Wages
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Industrial Relations Code
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Code on Social Security
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Occupational Safety, Health and Working Conditions Code
These codes officially came into effect on November 21, establishing a simplified, modern labour framework that helps workers and strengthens India’s industrial competitiveness.
Since their passage in Parliament in 2019 and 2020, states—regardless of political party—along with industry bodies and labour organisations have endorsed their forward-looking spirit. Several states updated their laws in harmony with the codes. Notably, states that permitted women to work night shifts with consent and safety provisions recorded a 13% increase in female employment, reflecting growing trust in safer, more inclusive workplaces.
Clarity, Dignity, and Fairness at the Workplace
Feedback from workers and industry leaders consistently highlighted the need for transparency and fairness. The new codes follow that principle, replacing a messy, confusing structure with a clear and unified system.
Key worker-centric reforms include:
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Statutory floor wages to reduce income inequality across states.
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Pan-India ESIC coverage, including for sectors previously excluded.
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Mandatory annual health check-ups for workers aged 40 and above.
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Formal recognition of gig and platform workers, acknowledging the realities of the modern economy.
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Appointment letters, pay slips, and paid annual leave for greater job dignity.
Fixed-Term Employment: Stability with Protection
Introducing Fixed-Term Employment (FTE) provides an alternative to contract jobs. FTE workers receive the same wages, benefits, and protections as permanent staff, including:
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paid leave
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regulated work hours
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medical benefits
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access to social security
A major reform is eligibility for gratuity after just one year of continuous service—a significant boost for worker welfare.
Overtime rules also emphasise fairness: if workers choose to stay beyond normal hours, they must be paid twice the regular wage rate.
Women at the Forefront of Economic Growth
Women’s empowerment is central to the reforms. The codes open new sectors for women—ranging from underground mining to heavy machinery and night shifts—when combined with consent and strict safety standards.
This has already improved participation rates and encouraged industries to adopt better workplace environments.
Simplifying Compliance for Industries
To foster ease of doing business, the codes drastically cut through bureaucratic layers:
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Single licence
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Single registration
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Single return filing
This simplicity encourages industries to scale operations and expand across states, creating more employment opportunities locally.
Global Recognition for India’s Reform Path
India’s rapid expansion of social security—from just 19% coverage in 2015 to 64.3% in 2025—has earned international praise.
The International Labour Organization (ILO) and the International Social Security Association (ISSA) have both hailed India’s efforts, with ISSA honouring the country with its Award for Outstanding Achievement in Social Security.
These organisations have also acknowledged the new labour codes as progressive, modern, and worker-friendly.
Reform Meets Resistance
Much of the criticism surrounding the labour codes stems from political motives rather than an understanding of the reforms. Those who benefitted from opaque systems and loopholes feel threatened by a transparent framework that reduces discretionary power. Instead of welcoming a system centred on workers’ welfare, they choose to mislead the public with misinformation.
Towards an Atmanirbhar and Viksit Bharat
The labour codes mark a turning point in India’s march toward self-reliance and developed-nation status. They uphold worker dignity, spur industrial growth, protect rights, and place workers at the heart of India’s economic engine.
In the vision of an Atmanirbhar Bharat, these reforms ensure that India grows not just economically, but equitably—with its workforce empowered, protected, and ready to shape the nation’s future
