Fault lines in labour reforms

The observations in the Economic Survey come as unrest grows among gig workers and labour unions

- Vaeshnavi Kasthuri, Mansi Verma & Devina Sengupta

According to the economic survey, about 40% of gig workers earn less than ₹15,000 per month.

(BLOOMBERG)

Even as the Centre moves to overhaul India’s labour regime through four new labour codes, the Economic Survey 2025-26 flags a widening gap between reform intent and labour-market reality—particularly for gig workers, women, and newly skilled youth.

Notified last November, the codes promise expanded social security, minimum wage guarantees, and a simpler compliance framework aimed at balancing workers’ welfare with industry competitiveness. The survey also points to gains such as safer and more flexible work arrangements that could improve gender diversity.

But these reforms come against the backdrop of persistent fault lines: volatile incomes for India’s fast-growing gig workforce, weak access to formal credit, low job retention despite large-scale skilling programmes, and women’s continued underrepresentation in stable, formal employment.

“The Economic Survey 2025-26 underscores labour law reforms—through the implementation of the four Labour Codes—as a major step toward creating a simpler, modern, and more inclusive labour framework,” said Puneet Gupta, partner, people advisory services-tax, EY India.

By consolidating 29 laws into four codes, he said, the reforms aim to reduce compliance burden, expand social security to unorganised and platform workers, and promote gender inclusion across sectors with appropriate safeguards.

The survey, tabled on Thursday, pointed out that while the gig sector is expanding rapidly, the “income volatility among 12 million gig workers persists, leading to challenges in accessing credit”.

Most gig workers remain financially invisible to lenders due to ‘thin file’ credit histories, even as platform aggregators have introduced some changes to improve onboarding and payments.