The effective rollout of India’s Labour Codes will be critical to expanding formal employment and strengthening security for women and gig workers, the Economic Survey 2025–26 said, while underscoring the need for sustained investment and coordination from the private sector.
The pre-Budget document, tabled in Parliament by Finance Minister Nirmala Sitharaman on Thursday, noted that all four Labour Codes were notified on November 21, 2025, with detailed rules expected to be operational in the coming months.
As definitions of work continue to evolve amid technological and demographic shifts, the Survey said dynamic labour policy and flexible regulatory frameworks would be essential to support job creation, worker well-being and employment security.
“Implementing the Codes marks the first step towards labour market transformation. The transition will require coordination and investment from the private sector,” the Survey stated.
It added that companies will need to upgrade internal systems, revise workforce policies, reassess employment models and strengthen digital readiness to remain competitive under the new framework. While the Codes offer a unified regulatory structure, their effectiveness will ultimately depend on how deeply businesses integrate them into day-to-day operations.
Draft rules under the four codes — the Code on Wages, 2019; Industrial Relations Code, 2020; Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020 — were pre-published on December 31, 2025, for stakeholder feedback.
Labour market transformation underway
The Survey noted that India has recorded strong employment growth in recent years, supported by structural reforms, tax rationalisation and sustained investment in skill development. At the same time, the employment and skilling ecosystem is being reshaped by demographic changes, rapid technological adoption and the expansion of gig and platform work.
Against this backdrop, the Survey reiterated that the effective implementation of the Labour Codes would play a pivotal role in strengthening formal employment and improving protections for women and gig workers.
Push for targeted skilling and early vocational pathways
On skills, the Survey called for flexible vocational pathways starting at the school level, arguing that early exposure to skills training will be increasingly important.
It recommended targeted skilling initiatives for women and youth in high-productivity sectors to ensure more inclusive labour-market outcomes. A stronger emphasis on industry-driven skilling, it said, remains central to building job-ready talent and improving alignment between education and employment.
India’s workforce, which now exceeds 56 crore, represents a significant opportunity for economic growth, the Survey noted. Labour market indicators point to a relatively stable environment, with rising labour force participation, falling unemployment and steady job creation across both organised and unorganised sectors.
To fully harness the demographic dividend, however, the Survey stressed the importance of generating quality jobs that offer sustainable livelihoods.
Women, gig workers and social security expansion
The Survey observed that structural barriers to female labour force participation are gradually being addressed through measures such as safe and affordable accommodation, as well as flexible and hybrid work arrangements.
It also highlighted a growing policy focus on extending social security, income protection and grievance redressal mechanisms to gig and platform workers. While expanding the quantity of employment remains important, improving job quality is equally critical, it said, as economic growth depends on both the size and capability of the workforce.
Vocational education at all levels will be vital to strengthening the skill ecosystem and advancing the vision of a Viksit Bharat, the Survey added.
Digitalisation reshapes labour markets
India’s labour markets are undergoing significant structural change, driven by digitalisation, the green energy transition and new forms of employment such as gig and platform work, the Survey said.
In the post-pandemic phase, the emphasis has shifted from the sheer number of jobs to the quality of work, reflecting a more inclusive and sustainable approach to labour policy. The Survey called for policies that promote flexible work arrangements, hybrid models and gender-responsive standards, including maternity benefits, equal pay and safeguards against workplace harassment.
Under the new framework, women workers are permitted to work from home after availing maternity benefits.
Recent policy initiatives have also focused on identifying unorganised workers and integrating them more closely with the formal economy through welfare and skilling systems.
The Code on Social Security, 2020 defines unorganised workers as home-based, self-employed or wage workers in the unorganised sector, as well as certain workers in the organised sector not covered by the Industrial Disputes Act, 1947.
The e-Shram portal, which serves as a national database for informal workers, continues to bridge the gap between informal and formal employment. As of January 2026, over 31 crore unorganised workers have been registered, with women accounting for 54 per cent of total enrolments.
Each registrant is assigned a Universal Account Number linked to Aadhaar and mobile details, enabling portability of benefits across platforms, locations and employment arrangements.
The four Labour Codes consolidate 29 central labour laws, streamlining regulations and expanding worker protections. Complementing the Centre’s efforts, 32 states and Union Territories have published draft rules under the Codes.
Importantly, the Codes formally recognise gig and platform workers, extending access to social security, welfare funds and benefit portability.