Print Friendly, PDF & Email

India’s big problem of low-quality employment

GS Paper 3

Source: Indian Express

Direction: Go through it once. Try to understand the trend. No need to remember data/facts.

Context:  A report titled “Impact Assessment Study of the Labour Reforms” was published recently, it analysed labour reforms conducted in Rajasthan, Maharashtra, Andhra Pradesh, Tamil Nadu, Jharkhand, and Uttar Pradesh during the period 2004-05 to 2018-19.

Status of employment:

      • 1980 to 1990: Every 1% of GDP growth generated roughly two lakh new jobs
      • 1990 to 2000:Every 1% of GDP growth generated roughly one lakh jobs.

The trend in labour reform:

      • Pre-2014 Reforms: The government focused on improving labour administration by simplifying procedures and digitisation.
      • Post-2014 Reforms: Focus on reforming the content of the laws e.g. New labour codes.

Since labour is a ‘Concurrent’ list subject, we look at the performance of states on these labour reforms:

      • Little success: The labour reforms were undertaken so far had little effect on increasing employmentin large enterprises in India.
        • The reforms failed to serve the primary purpose of labour laws like to protect workers, not promote the interests of investors.
      • Employment in formal enterprises is becoming more informal.
      • Increasing contractualization: Large investors are employing increasing numbers of people on short-term contracts, while perversely demanding more flexibility in laws.
      • Rajasthan, the first state to implement the reforms, seems to have benefitted the least from them.


More GDP does not automatically produce more incomes at the bottom. India needs to focus on the creation of jobs, labour policies must focus on the generation of better-quality livelihoods for Indian citizens or all citizens’ ease of earning better livelihoods and with more dignity.

Insta Links

New Labour laws

Mains Links

  1. What are the issues with current labour laws in the country? Examine the need for carrying out labour reforms to progress on the performance of India’s manufacturing sector. (250 Words)