Employment and Labour Codes for UPSC: PLFS, 29 Laws into 4 Codes, Gig Workers, e-Shram, PMVBRY and Skilling (2025-26)

Reading the Labour Market: PLFS and the Structure of Employment

🎯 Exam priority: Tier-2, with a major legal anchor. Labour and employment gave 5 Prelims questions and social security 4 in ten years; the 2021 and 2022 papers asked about casual workers' entitlements and the Labour Bureau. The 21 November 2025 commencement of the four Labour Codes is the largest overhaul of labour law since Independence and will be asked as 'what do the Codes provide', with near-miss options (a floor wage that States may undercut; gratuity after five years for fixed-term staff). Mains asks whether labour reform creates jobs and whether gig workers are protected.

India has a young population and not enough regular jobs. This note takes the labour market first — how it is measured and what it shows — then the law that governs it, then the schemes that try to formalise it and to build skills.

Reading the labour market: PLFS and the structure of employment

• Demography. The working-age population (15-59) will exceed 98 crore within a decade and the demographic dividend peaks around 2030, when nearly 65% of the population is of working age; fertility is already below replacement, so ageing follows.

• How it is measured. The Periodic Labour Force Survey (PLFS) of MoSPI is the source. MoSPI revamped it in April 2025 to publish monthly bulletins (current weekly status) and revised quarterly estimates. The unemployment rate is the percentage of the labour force that is unemployed; the labour force participation rate (LFPR) is the share of the population working or seeking work. Current Weekly Status (CWS) classifies a person by activity in the last 7 days; the usual-status approach uses a one-year reference.

• The level. In July-September 2025, 56.2 crore people aged 15 and above were employed, 8.7 lakh more than in the previous quarter; unemployment fell and participation stabilised through the first half of FY26.

• The structure. Agriculture employs 42.4% of workers and self-employment is 55.8% of employment; casual labour is 18.9%. In rural areas agriculture employs 57.7% and self-employment is 62.8%; in cities services dominate (62.0%) and regular wage or salaried jobs are the largest category (49.8%). The picture: a large informal, self-employed base and a regular-wage minority concentrated in towns.

• Informality and the unorganised worker. The e-Shram portal — the National Database of Unorganised Workers (construction, migrant, gig and platform workers, street vendors, domestic and farm workers) — had registered more than 31 crore workers by early 2026 (31.42 crore on 22 December 2025) and links them to 18 social security schemes. The National Career Service (NCS) matches job seekers to vacancies; it is linked with EPFO, ESIC, DigiLocker, e-Shram, Udyam and the Skill India Digital Hub (SIDH).

The Four Labour Codes: What Each Provides

For decades labour was governed by a tangle of Central and State laws. In November 2025 they were folded into four Codes.

The four Labour Codes: what each provides

• Background. Labour is on the Concurrent List; more than 140 Central and State laws, with overlapping jurisdictions and inconsistent definitions, made compliance difficult. The four Codes — the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions (OSH) Code, 2020 — consolidate 29 Central laws and were brought into force on 21 November 2025, after tripartite discussions among government, employers and trade unions from 2015 to 2019. 32 States/UTs have published draft rules.

• Common provisions. Uniform definitions; web-based inspection with inspectors acting as 'inspector-cum-facilitators'; single licence, single registration, single return; first-offence penalties made civil (fines) rather than criminal; no gender-based discrimination, including against transgender persons; women may work in all sectors including night shifts with consent and safety measures.

Survey's reading: the Codes try to balance flexibility for firms with security for workers; their impact depends on State rules and on firms updating systems and workforce models. Some States already allow women to work night shifts with safeguards (transport, CCTV, double overtime).

Women's Work, Time Use and the Gig Economy

Behind the headline numbers are two groups the Survey singles out: women, whose work is under-counted, and gig workers, whose status the Codes have just recognised.

Women's work, time use and the gig economy

• Women are in the workforce, but as helpers and own-account workers. In rural India only 10.8% of working women hold regular wage jobs (Q2 FY26); 37.5% are own-account workers or employers and 34.2% are helpers in household enterprises. Flexible work attracts them because of unpaid care duties.

• Time Use Survey 2024 (MoSPI's second all-India survey after 2019) measures paid and unpaid work. In 2024, 75% of men and 25% of women aged 15-59 took part in employment and related activities (2019: 70.9% and 21.8%). 41% of women but 21.4% of men provided care to household members — women spent about 140 minutes a day on it against 74 for men. On unpaid activities women spent 363 minutes a day against 123 for men; on paid activities men spent 414 minutes and women 302. The Survey calls this women's dual burden. The Time Use Survey is how unpaid work gets counted; the PLFS does not capture it.

• Gig and platform work. In India such workers were historically classed as informal labour with no cover under labour laws; the Code on Social Security gives them legal recognition and a route to benefits through the Social Security Fund and e-Shram. The Survey notes that the Code treats them as one group although the workforce is highly segmented by skill; NITI Aayog projects the share of high-skilled gig workers at 27.5% and low-skilled at 33.8% by 2030. Abroad, the EU Platform Workers' Directive (2024) corrects the misclassification of gig workers as self-employed and regulates algorithmic management, and in 2025 the ILO began discussing global standards for decent work in the platform economy.

Jobs, Skills and Social Security: The Schemes

Law sets the floor; schemes and skills try to raise it.

Jobs, skills and social security: the schemes

• Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY) — the Employment-Linked Incentive scheme announced in Budget 2024-25 and launched on 15 August 2025 with an outlay of ₹99,446 crore. First-time employees get one month's wage (up to ₹15,000); employers get incentives for up to two years (four for manufacturing) for additional jobs. It aims at 3.5 crore jobs over two years, 1.92 crore of them for first-time workers, for jobs created between 1 August 2025 and 31 July 2027.

• Social protection coverage has risen from 19% in 2015 to 64.3% in 2025 (ILO measure) — second only to China — and India received the ISSA Award 2025 for achievement in social security.

• Skilling. The Ministry of Skill Development and Entrepreneurship (created in 2014) runs PMKVY; PMKVY 4.0 has trained about 27 lakh candidates across 38 sectors, introduced 77 customised courses and 102 future-skill job roles (AI, Industry 4.0, green jobs) and works through more than 15,500 institutions and over 7,000 Skill Hubs. The Survey asks for flexible vocational pathways from school level and an integrated information system linking e-Shram (workers), NCS (vacancies) and SIDH (training).

• The rural wage-employment guarantee — MGNREGA — was replaced from 1 July 2026 by the VB-G RAM G Act with 125 days (Article 20). The new Budget (Article 29) adds a High-Powered 'Education to Employment and Enterprise' Standing Committee on services.

Factory Jobs, Small Enterprises and Formalisation

The PLFS tells you how many people work; the Annual Survey of Industries and the unincorporated-sector surveys tell you where and in what kind of firm. These are the data sources the Survey uses.

Jobs in factories and small enterprises

• Organised manufacturing (ASI, FY24). The Annual Survey of Industries covers factories registered under the Factories Act, 1948 (ten or more workers with power, twenty or more without). Employment rose 6% over the previous year, adding over 10 lakh jobs, and more than 57 lakh jobs in FY15-FY24 (a CAGR of 4%).

• Big factories are better jobs. About 22% of factories employed 79% of the manufacturing workforce; small factories (under 100 workers) are 77% of the total but only 21% of the workforce. Large factories pay higher wages and have higher value added per person, and their number almost doubled (+97%) between FY14 and FY24 against +26% for small ones — a sign of improving job quality. Seven States give about 60% of manufacturing jobs, led by Tamil Nadu (15%), Gujarat (13%), Maharashtra (13%) and Uttar Pradesh (8%).

• The unincorporated non-agricultural sector (the Quarterly Bulletin of Unincorporated Sector Enterprises, QBUSE) has 7.9 crore establishments employing 12.9 crore people; working owners are 60% of workers (58.9% in 2023-24), women are 28.7% and 39% of units use the internet (26% in 2023-24).

• Women at work. The female labour force participation rate rose from 23.3% (2017-18) to 41.7% (2023-24); the Survey says raising it to about 55% by 2050 would be critical for sustaining high growth.

• Formalising the informal. The e-Shram portal — the National Database of Unorganised Workers — has registered over 31 crore workers (54% women), each with a Universal Account Number linked to Aadhaar; 18 schemes including One Nation One Ration Card, NSAP, the National Career Service and PM-SYM are integrated with it. The National Career Service (2015) has over 5.9 crore job seekers and 53 lakh employers registered.

Skilling: The Gap and the Instruments

Having a job is not the same as having the skills for a better one. The Survey's skilling chapter measures the gap and lists the instruments.

Skilling: the gap and the instruments

• The gap. The share of 15-59-year-olds with some vocational or technical training rose from 8.1% (2017-18) to 34.7% (2023-24), but only 4.9% of youth aged 15-29 have formal training and another 21.2% have informal training. Only 47% of schools offer skill courses at Grade IX and above, and just 29% of students take them (PARAKH 2024). A 2025 National Skill Gap Study points to weak foundational skills and a mismatch between training and industry needs.

• Paying for outcomes. The Survey wants skilling judged by employment, retention and earnings, not by numbers trained. The modified Model Skill Loan Scheme (2024) widens credit for training, including non-NSQF courses listed on the Skill India Digital Hub, and the Skill Impact Bond (run by MSDE through NSDC) pays providers against independently verified placement and retention.

• Gig and platform work. Gig workers grew from 77 lakh (FY21) to 120 lakh (FY25) — over 2% of the workforce — yet about 40% earn under ₹15,000 a month. The Code on Social Security, Section 2(35), defines a gig worker as someone earning outside a traditional employer-employee relationship. States are also moving: Uttar Pradesh allows women to work night shifts with safeguards (employer transport, CCTV, double overtime) and in all 29 hazardous sectors.

• The instruments. PMKVY 4.0 trains in job roles aligned to the National Skills Qualification Framework and developed by industry-led Sector Skill Councils, with the Flexi-MoU scheme letting firms customise courses. The National Scheme for Upgradation of ITIs will upgrade 1,000 government ITIs — 200 hubs and 800 spokes. NAPS 2.0 pays 25% of the apprentice stipend directly by DBT, and NATS 2.0 had made over 12 lakh stipend transfers. PM Vishwakarma (September 2023) supports artisans in 18 traditional trades with training, a toolkit e-voucher of up to ₹15,000 and collateral-free loans up to ₹3 lakh. SWAYAM Plus (February 2024) delivers industry-aligned digital courses and the Skill India Digital Hub brings skilling, education and jobs into one portal.

How UPSC Could Ask This Next

How UPSC could ask this next

• The 'what do the Codes provide' stem. Statements such as 'Minimum wage is a statutory right of all employees' (true), 'States may fix minimum wages below the floor wage' (false), 'Fixed-term employees get gratuity after five years' (false: after one year), 'Women may not work night shifts' (false), 'The Codes consolidate 29 laws and came into force on 21 November 2025' (true).

• The definitions stem. Unemployment rate (share of the labour force) versus LFPR (share of the population); CWS versus usual status. A near-miss swaps the denominators.

• The institutions stem. Labour Bureau (industrial disputes, retrenchments, CPI-IW), PLFS (MoSPI), e-Shram (unorganised workers), NCS (jobs), EPFO and ESIC (provident fund and insurance). A 2022 Prelims question asked who compiles data on disputes and lay-offs: the Labour Bureau.

• The scheme-numbers stem. PMVBRY — ₹99,446 crore, one month's wage up to ₹15,000, 3.5 crore jobs; e-Shram — 31 crore; social-protection coverage 64.3%.

• The convention stem. ILO Conventions 138 (minimum age) and 182 (worst forms of child labour) are about child labour (2018 Prelims); the 2026 paper asked which labour conventions India has not ratified (that item was dropped from the key). Know the ILO's eight fundamental conventions and which India has ratified.

• The near-miss numbers. FLFPR 41.7% (2023-24) versus the 2017-18 base of 23.3%; formal-training share 4.9% (youth) versus 34.7% (any vocational or technical training, 15-59); ASI: 22% of factories employ 79% of workers.

• Mains angles. (1) Do the Labour Codes strike a balance between flexibility and worker security? (2) Why has manufacturing not created the mass employment that textile and footwear exporters did in East Asia? (3) How should the Social Security Fund finance gig and platform workers? (4) Is India's employment growth 'jobless' in quality — dominated by self-employment and casual work? (5) How can skilling be made industry-led?

Further Reading

• NCERT Economics textbooks (Class 11–12), the Economic Survey, the Union Budget documents and RBI publications cited in this note — the primary sources behind every figure above.

Test Yourself: Practice Questions & PYQs

Twelve practice questions on the Labour Codes, PLFS concepts and the employment schemes, followed by real UPSC questions and exact Mains questions.

Practice Questions

Q1. The four Labour Codes brought into force on 21 November 2025 together consolidate how many Central labour laws?

• (a) 44

• (b) 29

• (c) 100

• (d) 12

Q2. Consider the following statements about the Code on Wages, 2019:
1. Minimum wages become a statutory right for all employees in organised and unorganised sectors.
2. States may fix minimum wages below the floor wage fixed by the Centre.
3. Employees must be paid at least twice the wage rate for overtime.
Which of the statements given above are correct?

• (a) 1 and 3 only

• (b) 1 only

• (c) 1, 2 and 3

• (d) 2 and 3 only

Q3. Under the Code on Social Security, 2020, gratuity is extended to fixed-term employees after

• (a) three years of continuous service

• (b) one year of continuous service

• (c) ten years of continuous service

• (d) five years of continuous service

Q4. Which of the following is a feature of the Industrial Relations Code, 2020?
1. Fixed-term employment with benefits equal to permanent workers
2. A Re-skilling Fund funded by 15 days' wages per retrenched worker
3. Recognition of a Negotiating Union for collective bargaining

• (a) 1 and 3 only

• (b) 2 and 3 only

• (c) 1, 2 and 3

• (d) 1 and 2 only

Q5. The Code on Social Security, 2020 provides a formal definition of which of the following categories of workers?
1. Gig worker
2. Platform worker
3. Aggregator

• (a) 2 and 3 only

• (b) 1, 2 and 3

• (c) 1 only

• (d) 1 and 2 only

Q6. In the Periodic Labour Force Survey, the labour force participation rate is the percentage of

• (a) the population that is employed in agriculture

• (b) wage earners in the organised sector

• (c) the labour force that is unemployed

• (d) persons in the labour force (working, seeking or available for work) in the population

Q7. According to the Economic Survey 2025-26, agriculture accounted for about what share of total employment in the PLFS quarter of July-September 2025?

• (a) 27.4 per cent

• (b) 12.4 per cent

• (c) 42.4 per cent

• (d) 72.4 per cent

Q8. The e-Shram portal is a

• (a) National Database of Unorganised Workers

• (b) platform for filing corporate returns

• (c) data portal of the Employees' Provident Fund Organisation only

• (d) stock exchange for gig workers

Q9. Consider the following statements about the Pradhan Mantri Viksit Bharat Rozgar Yojana:
1. It was launched on 15 August 2025.
2. First-time employees get one month's wage up to ₹15,000.
3. It targets the creation of more than 3.5 crore jobs over two years.
Which of the statements given above are correct?

• (a) 1 and 3 only

• (b) 2 and 3 only

• (c) 1 and 2 only

• (d) 1, 2 and 3

Q10. In India, which one of the following compiles information on industrial disputes, closures, retrenchments and lay-offs in factories employing workers?

• (a) Labour Bureau

• (b) Department for Promotion of Industry and Internal Trade

• (c) NITI Aayog

• (d) Central Statistics Office

Q11. According to the Labour & Employment Ministry's review, social protection coverage in India has risen from 19 per cent in 2015 to

• (a) 34.3 per cent in 2025

• (b) 94.3 per cent in 2025

• (c) 64.3 per cent in 2025

• (d) 44.3 per cent in 2025

Q12. Under the Labour Codes, women are permitted to work

• (a) only in day shifts

• (b) only in agriculture

• (c) only in offices

• (d) in all sectors, including night shifts, with consent and safety measures

UPSC Previous Year Questions (PYQs)

Real UPSC Prelims questions, checked against the official paper and answer key.

Q1. (2021) With reference to casual workers employed in India, consider the following statements:
1. All casual workers are entitled for Employees Provident Fund coverage.
2. All casual workers are entitled for regular working hours and overtime payment.
3. The government can by a notification specify that an establishment or industry shall pay wages only through its bank account.
Which of the above statements are correct?

• (a) 1 and 2 only

• (b) 1, 2 and 3

• (c) 1 and 3 only

• (d) 2 and 3 only

Q2. (2022) In India, which one of the following compiles information on industrial disputes, closures, retrenchments and lay-offs in factories employing workers?

• (a) Central Statistics Office

• (b) National Technical Manpower Information System

• (c) Labour Bureau

• (d) Department for Promotion of Industry and Internal Trade

Q3. (2018) International Labour Organization's Conventions 138 and 182 are related to

• (a) Gender parity at the workplace

• (b) Regulation of food prices and food security

• (c) Adaptation of agricultural practices to global climate change

• (d) Child labour

Mains Practice Questions

Use these to frame full-length answers. You don't have to answer one exactly — they show the angles UPSC tests, so let them guide which points you cover.

• Do the four Labour Codes strike the right balance between flexibility for employers and security for workers? Which provisions are most contested?

• India's employment growth is dominated by self-employment and casual work. Examine the reasons and suggest policies for creating more regular, quality jobs.

• How should social security be extended to gig and platform workers? Discuss the role of the Social Security Fund and e-Shram.

• Why has manufacturing failed to create labour-intensive jobs and exports? Suggest measures for more labour-intensive manufacturing.

• Evaluate employment-linked incentives (PMVBRY) as a way of creating formal jobs. What are the risks of such schemes?

UPSC Mains — Previous Years’ Questions on this topic (last 10 years)

These are the actual GS Mains questions UPSC has asked on this theme — real proof of how, and when, it is tested. Try to write a full answer to each.

• 2022 (GS-III): "Economic growth in the recent past has been led by increase in labour productivity." Explain this statement. Suggest the growth pattern that will lead to creation of more jobs without compromising labour productivity.

• 2022 (GS-II): Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.

• 2021 (GS-II): "'Earn while you learn' scheme needs to be strengthened to make vocational education and skill training meaningful." Comment.

• 2017 (GS-III): Account for the failure of manufacturing sector in achieving the goal of labour-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports.

• 2016 (GS-III): How globalization has led to the reduction of employment in the formal sector of the Indian economy? Is increased informalization detrimental to the development of the country?