Context:
Setting the stage for the possible implementation of the four Labour Codes from April 1, a meeting of the officials and Ministers of the Union Labour Ministry and State Labour Ministries has reviewed the progress in drafting of rules under the Codes by the States.
Key Highlights:
- Harmonised Draft Rules by States and UTs
- All 36 states and Union Territories UTs are expected to pre publish harmonised draft rules in alignment with the four new labour codes by March 31, 2025.
- Current Progress
- 18 states,UTs have already implemented most reforms.
- 32 states,UTs have prepublished the draft rules while others are making satisfactory progress.
Objective of the Labour Code Reforms
- Ease of Doing Business
- The new rules aim to simplify compliance and reduce burdens on businesses.
- Decriminalisation
- Reforms seek to de-criminalise certain labour related offences making regulations more business friendly.
- Promoting Women Participation
- The changes are designed to encourage greater female workforce participation.
- Better Employment Outcomes
- The ultimate goal is to create a more labour friendly ecosystem, fostering better working ,conditions and employment opportunities.
Launch of Occupational Shortage Index (OSI)
- Purpose
- The Occupational Shortage Index is designed to help match labour market demand and supply leading to more effective employment outcomes by identifying sectors with skill shortages.
- Impact
- This initiative aims to align workforce training with actual market needs.
E-Shram Microsite for Unorganised Workers
- Multilingual Platform
- A new multilingual microsite was launched to provide unorganised workers with easy access to welfare programmes from both the central and state governments.
- Goal
- To ensure seamless registration and access to government support for unorganised workers promoting inclusivity and social security.
Key Benefits of Labour Code Reforms
- Improved Regulatory Framework
- The reforms will create a more streamlined and efficient system for labour management.
- Support for Businesses
- By reducing compliance burdens and improving ease of doing business the reforms are expected to foster a more entrepreneur friendly environment.
- Social Security
- The new regulations are designed to ensure better welfare for workers especially those in the unorganised sector.
Labour Code Reforms Impact on Businesses and Workers
Business Impact
- Simplified Compliance
- Harmonization of labour codes, streamlines regulations, reducing paperwork and bureaucratic delays.
- Single window Clearance
- Businesses can comply with a single set of rules reducing paperwork and bureaucratic delays.
- Online Portals
- Digital submission of compliance records through online portals like the EShram microsite.
- Reduction in Compliance Burden
- The reforms reduce the administrative burden on businesses particularly SMEs as well who faced complex and overlapping regulations.
- Saving Costs
- Decriminalization of specific offenses reduces the legal expenses and risks for businesses.
Encouragement of Investment and Growth
- Foreign Investment
- Simplification of the regulatory regime makes an environment more appealing to foreign investors for the business ecosystem in India.
- Business Growth
- Streamlined compliance reduces bureaucratic hassle, enabling business growth and new initiatives.
Effects on the Workers
- Better Welfare and Social Security
- The roll out of E-Shram microsite gives better security to India’s unorganized workers recognizing it as a gender inclusive interface.
- Decriminalization and Empowerment of Workers
- Government works on shielding the working class from harassment by decriminalizing minor violations of labor laws.
