India to witness Labour reforms in 2025 in a Big Way

 

By Dr. Gyan Pathak

The year 2024 saw the Union Government of India meticulously preparing the ground for proposed labour reforms, including the four controversial labour codes, and Employment Linked Incentive (ELI), though could not roll them out because of a range of issues, including hesitant attitude of India Inc and opposition from the joint platform of the 10 Central Trade Unions (CTUs). However, preparations reached an advanced stage, and the Union Government is almost ready to implement labour reforms in a big way in 2025.

The Union Ministry of Labour and Employment has been consistently working for harmonization of rules under the four labour codes – the Code on Wages 2019, Industrial Relations Code 2020, Occupational Safety, Health and Working Conditions Code 2020, and Code on Social Security 2020, which have been resisted by the joint platform of 10 CTUs since 2020 even organizing all India strike actions, and are still demanding their withdrawal, alleging that they are anti-labour and pro-corporate, and their implementation would make workers suffer like economic slaves.

Union Government on the other hand claims that implementation of these codes would bring much desired labour reforms which will benefit both the workers and employers. PM Narendra Modi has committed himself for implementation of these codes which he said the biggest reform in independent India.

During the year, 6 regional meetings were held between August and October, 2024 to facilitate State/UT Governments for framing the Rules within the ambit of Labour Codes, since labour is a state subject and rolling out implementation of the Codes legally require states own rules. Now, all 36 States/UTs are expected to complete harmonization and pre-publication of draft rules by 31st March 2025, the Union Ministry of Labour and Employment has said.

Not only that, the Union Ministry of Labour & Employment has identified four reforms in Labour Laws to be carried out viz. Single Registration, Single Return, Firm-based common license with 5 years validity. Further the Ministry is also moving for change of role of Inspector to Inspector-cum-Facilitator. These steps, the Centre expects, would act as a catalyst for Ease of Doing Business (EODB) by reducing compliance burden. EPFO has released the updated Manual for Inspector cum Facilitator describing entire spectrum of duties and responsibilities of an Inspector cum Facilitator.

As for ELI Scheme announced in July 2024 in the Union Budget 2024-25 is concerned, it could not take off last year, again due to a range of issues, including the hesitations among the employing companies of the country in participating in the programme. Union Government had announced this programme as a major step towards incentivising job creation, promoting formalisation in job market, and improving employability. Three Schemes announced for large number of decent job creation under ELI and two other schemes as part of the five-package schemes had a total outlay of Rs 2 lakh crore and was expected to benefit around 4.1 crore young people over the next five years.

Part A of ELI was targeting first-time employees in the formal sector registered with (Employment Provident Fund Organisation) EPFO. This Part offers a one-month wage (up to Rs. 15,000) in three instalments. Part B was focusing on job creation in manufacturing. This Part incentivizes both employees and employers for the additional employment of first-time employees by reimbursing their EPFO contributions during the first four years of employment, as per scheme guidelines. Employees with salaries up to Rs. 1 lakh will be eligible. Part C was providing support to employers by reimbursing uptoRs. 3,000 per month for two years towards their EPFO contribution for each additional employee above the threshold, with a salary of up to Rs. 1 lakh per month.

EPFO was asked by the Union Ministry of Labour and Employment to ensure that employers complete UAN activation and Aadhaar seeding by November 30 for new employees to avail ELI benefits which failed because of two reasons – first India Inc was unwilling to participate and secondly, Union government was also not ready with the details of the ELI scheme. Thereafter, on December 4, the date was extended to December 15. The deadline has been extended for the third time to January 15, 2025.

Since, the Union Budget 2025-26 is expected to be tabled in the parliament of India on February 1, there is not much time left in implementation of the ELI Schemes announced in the Union Budget 2024-25. One year has already been lost. Nevertheless, Union Government is trying hard to roll out the scheme in the current financial year 2024-25 ending on March 31, 2025 itself.

EPFO is not even ready with its Centralized IT Enabled System (CITES 2.01) to have an integrated, centralized data-base, bringing efficiency in the process. The IT upgradation involving hardware and software upgrade, is targeted to be completed by January 2025.

Under the Direct Benefit Transfer Scheme, the Union government has asked all ministries and departments to link workers’ Aadhaar numbers and their back accounts to take benefit from the social security benefits. It is under progress.

Union Ministry of Labour and Employment has launched eShram as “One-Stop-Solution” on October 21, 2024 for unorganized labour to have access to various social sector schemes as they register on eShram to access social security schemes and see benefits availed by them so far. Registration on eShram has crossed 30 crore in 2024. So far, 12 social security and welfare schemes have been integrated or mapped with eShram. Data sharing guidelines between states and UTs have been formulated and shared. A Platform Workers Module has also been developed under eShram.

MIS Portal for building and construction workers was launched on August 21, 2024. States and UTs have been requested to share data on the portal, and 10 states have completed integration process so far. The states have also been asked to integrate with PMJJBY and PMSBY. A total of 12 states have signed MoU with State Health Agency und NHA for extension of Ayushman Bharat PMJAY. Employees State Insurance Corporation (ESIC) is also in the process of convergence with Ayushman Bharat PMJAY, which is expected to benefit over 14.43 crore ESI beneficiaries.

The Union Ministry of Labour and Employment is also working towards Framework Development for Social Security Coverage to Gig and Platform workers under the Social Security Code, 2020. Extensive stakeholder consultations were carried out with states and UTs. A dedicated committee, chaired by the Central Provident Fund Commissioner (CPFC) of the Employees’ Provident Fund Organisation (EPFO), has also been constituted.

There are every indication that 2025 would be going to prove eventful and significant year for the workforce in India, though implementation of the four labour codes at one go would not be easy when the joint platform of 10 CTUs are still opposing it. The Centre is therefore planning to implement labour reform in a phased manner to keep the opposition from CTUs at manageable level. (IPA Service)

 

 

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