Lok Sabha Question No. 2341 (UNSTARRED), answered on 2025-12-15
Subject: SBI Projections on Impact of Labour Codes
Ministry: LABOUR AND EMPLOYMENT
Asked by: Shri Suresh Kumar Shetkar, Shri Vijayakumar Alias Vijay Vasanth

## GOVERNMENT OF INDIA

## MINISTRY OF LABOUR AND EMPLOYMENT LOK SABHA UNSTARRED QUESTION NO. 2341 TO BE ANSWERED ON 15.12.2025

## SBI PROJECTIONS ON IMPACT OF LABOUR CODES

## 2341. SHRI VIJAYAKUMAR ALIAS VIJAY VASANTH: SHRI SURESH KUMAR SHETKAR:

Will the Minister of LABOUR AND EMPLOYMENT be pleased to state:

- whether the Government accepts that SBI's estimate of a Rs. 75,000-crore consumption boost from the new labour codes is purely  theoretical  and  if  so,  whether  any  independent  impact
- (a) study has been conducted by the Government;
- (b)
- if so, the details thereof;
- (c) whether the Government has credible evidence to support the assumption that 20 per cent of informal workers are likely to shift to  formal  employment,  despite  the  persistent  failure  of  past formalisation efforts and if so, the details thereof;
- (d) whether the Government admits that unemployment cannot fall by 1.3 per cent when several States have yet to fully notify labour code rules and if so, the details thereof along with the corrective steps are planned by the Government;
- (e) whether  safeguards  exist  to  prevent  employers  from  evading compliance through contractualisation, outsourcing or pushing workers back into informal arrangements and if so, the details thereof; and
- (f) whether the Government has assessed the compliance burden on  Micro,  Small  and  Medium  Enterprises  (MSMEs)  and  small establishments  and  if so,  the  measures  proposed  by  the Government  to  ensure  that  the  labour  codes  do  not  escalate costs or trigger job losses?

## ANSWER

## MINISTER OF STATE FOR LABOUR AND EMPLOYMENT (SUSHRI SHOBHA KARANDLAJE)

- (a) & (b): Reforms in labour laws are an on-going process to update the legislative as well as governance system to address the need of the hour so as to make them more effective, flexible and in sync with

emerging economic and industrial scenario. The four Labour Codes have  provisions  for  reducing  compliance  burden  and  enabling flexible, modern work arrangements thereby facilitating employment, Government's pro- skilling and industrial growth; reaffirming the commitment to a pro-worker, pro-women, pro-youth and employment labour ecosystem.

(c) to (e): The four Labour Codes came into force with effect from 21.11.2025. The Codes provide for reducing compliance burden and enabling  flexible,  modern  work  arrangements  thereby  boosting employment, skilling and industry growth, reaffirming the Government's  commitment  to  a  pro -worker,  pro-women,  pro-youth and pro-employment labour ecosystem.

The Labour Codes strengthen the protection available to workers, including unorganized workers  in terms of statutory minimum  wage,  social  security  and  healthcare  of  workers.  The provision of Fixed Term Employment (FTE) has been introduced in the Industrial Relations Code 2020, allowing engagement of workers for a specified duration. Such workers are entitled to all benefits, at par with permanent employees performing similar work. This provision is expected to  reduce  contractualization,  increase  employability  and meet workers' aspirations. They are eligible for gratuity after just one year, instead of five years.

The Code on Wages, 2019 provides for a statutory right for extends applicability  of  minimum  wages  to  all  employees  in  all  sectors payment of minimum wages for all employees and covering both organised and unorganised.

The Occupational Safety, Health and Working Conditions Code,  2020  provides  for  provisions  related  to  safety,  health  and working conditions of these workers. The Code also mandates every employer to issue appointment letters to all employees which will further enhance formalisation.

Further, the Code on Social Security, 2020 aims to extend social  security  benefits  to  all  workers  both  in  the  organised  and unorganized sectors.

Besides, the National Career Service (NCS) and a national database of  unorganised  workers on  e-Shram  portal  of  Ministry  of Labour and Employment are in place to bridge the supply-demand in stakeholders registration labour market through convergence of various employers, job-seekers, skilling services and respectively.

The NCS Portal is a one-stop solution for providing career related services including jobs from private and government sectors through a digital platform [www.ncs.gov.in].

Labour  is  in  the  Concurrent  List  of  the  Constitution  of India, therefore, the Centre and the States have separate enforcement machinery to oversee compliance and ensure effective implementation of labour laws in their respective sphere.

(f): One of the central aims of the Labour Codes is to simplify and streamline regulatory processes through rationalised thresholds leveraging technology thorough digitised forms, registers & returns, transparency in enhancement and decriminalisation of offences etc. The Codes create a balanced environment for enterprises to create employment  opportunities  for  workers  to  benefit  from  fair  wages, dignity, and social protection.

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