The missing half of Viksit Bharat: A case for labour codes as growth strategy

Morning Standard

Key arguments

1. Female labour participation is a binding constraint for India’s growth — raising it toward comparable economies is crucial for achieving a $30 trillion target by 2047.
2. Fragmented pre-2019 labour law regime created compliance burdens, regulatory uncertainty and low formalisation; consolidation into four codes removes “barriers” and simplifies rules.
3. Codes are enablers, not silver bullets: they must be implemented with supporting infrastructure—social security portability, creches, advisory boards, active state adoption, and gender-sensitive measures.
4. Institutionalisation matters: Mandatory representation of women on advisory boards and state-level implementation speed will determine real outcomes.
5. Outcome orientation: The codes, when paired with active governance (digital IDs, delivery systems), can convert legal change into higher female labour force participation, job creation in tradable sectors, and productivity improvements.

3. Author’s stance and tone

• Pro-reform and pragmatic: The authors are positive about the codes but emphasise implementation design and supporting institutions. They treat labour codes as strategic levers rather than ideological endpoints.
• Policy-prescriptive: The tone is reform-oriented, recommending specific enabling measures (creches, advisory boards, gender-disaggregated monitoring).

4. Biases and assumptions

Biases

• Reform-optimism bias: Strong belief that deregulatory consolidation will translate into employment gains if correctly implemented; may underplay demand-side constraints or persistent social norms limiting women’s work.
• State-capacity optimism: Assumes states will adopt and execute implementation faithfully, and that bureaucratic capture or implementation slippage can be managed.

Key assumptions

• Labour law fragmentation is a primary constraint on formal hiring rather than other factors (skills mismatch, infrastructure, macro demand).
• Private sector will respond to reduced compliance friction by hiring more, not by automating or substituting labour with capital.

5. Pros and cons of the argument

Pros

• Coherent reform narrative: Ties legal reform to national economic objectives and demographic dividend strategy.
• Focus on women: Highlights gendered constraints (childcare, safety, flexible work) and suggests concrete institutional fixes.
• Practical prescriptions: Recommends advisory boards, creche networks and social-security portability—actionable items that bridge law and delivery.

Cons / Weaknesses

• Insufficient empirical quantification: Lacks rigorous evidence on elasticity of employment to labour-code reform (how many jobs will be created and in what sectors).
• Limited attention to informal sector realities: Majority of Indian workforce remains informal; codes may have limited reach without targeted incentives.
• Risk of uneven federal implementation: Variable state capacity and political economy may lead to heterogenous outcomes; the piece underemphasises this risk.

6. Policy implications & recommended actions

Immediate (policy design)

• Detail implementation rules: Central government must issue model rules and a clear timeline; states should be incentivised (tied grants) to adopt uniform, gender-responsive rules.
• Gender-responsive safeguards: Mandate creche/childcare norms for establishments above a small threshold, and incentivise micro/SME adoption via subsidies or tax credits.

Medium term (institutional)

• Advisory boards & social partners: Constitute Central and State Labour Advisory Boards with at least one-third women membership, trade unions and employer reps; use them to design sectoral roadmaps.
• Digital delivery & portability: Fast-track social-security registries linked to Aadhaar/ID, portable accounts for PF/ESIC for gig and informal workers; build one-stop compliance portals.

Long term (labour-market ecosystem)

• Skills-labour linkages: Scale sector-specific training tied to labour demand (industrial corridors, services) and apprenticeships with wage support.
• Monitoring & evaluation: Publish gender-disaggregated dashboards (participation, wages, formalisation rates, grievance redress) and independent evaluations at 12/36 months.

7. Real-world impact (if implemented well / poorly)

If implemented effectively

• Higher female participation and formal job creation in organized sectors; improved worker welfare via social security; gains in productivity that compound over time.
• Inclusive growth: A virtuous cycle of employment, tax revenues, and social protection expansion enabling fiscal space for further reforms.

If poorly implemented

• Token compliance: Codes become box-ticking exercises; employers may circumvent, and workers—especially women—gain little.
• Unequal outcomes: Benefits accrue to larger firms and better-off states; informal and female workers in lagging regions remain excluded.

8. Alignment with UPSC GS syllabus (how to use in answers)

• GS Paper 2 (Governance): Policy formulation, federalism (state adoption of codes), role of advisory bodies and institutional reforms.
• GS Paper 3 (Economy): Labour market reforms, employment generation, formalisation, productivity and social security systems.
• GS Paper 1 (Society): Gender norms, female labour participation, social determinants of work.
• GS Paper 4 (Ethics): Ethical governance—duty to protect vulnerable workers, balancing rights of employers and employees.

9. Balanced conclusion & future perspectives

The article makes a compelling, policy-relevant case that India’s labour codes are more than regulatory housekeeping: they can be enabling instruments for unlocking female labour participation and structural job creation—if implemented with deliberate, gender-responsive delivery systems and state-level commitment. The reform’s promise lies not in legal consolidation alone but in the ecosystem: childcare infrastructure, portable social protection, skills linkages and transparent dispute resolution. To turn legislative potential into measurable outcomes, policymakers must sequence reforms with funding, capacity-building and rigorous M&E; otherwise the codes risk becoming formalistic changes with limited impact on the ground.

Future perspective: Success will depend on three converging trends: (a) rapid state-level rule adoption and administrative digitalisation, (b) targeted interventions to remove supply-side barriers for women (childcare, safety, transport), and (c) demand revival and sectoral job growth where women can be absorbed. If these align, the labour codes can be part of a credible growth strategy; if not, the codes will remain necessary but insufficient—an important step that must be followed by sustained implementation effort.