New labour laws are a major 2nd generation economic reform

Deft balancing of interests must be continued till all stakeholders come on board.

- AJAY DUA

Representational image: Workers at a candle making factory in Agartala, Tripura. ANI

(ANI)

Last week's enunciation of 4 Labour Codes to replace the existing 29 Central laws is the first major labour reform in independent India. Their notification on 21 November 2025 marks the culmination of a two-decade-long endeavour to update the archaic workforce-related legal framework in sync with the goals of an inclusive society and a developed economy.

Several of the displaced legislations were either a legacy from the colonial rule or originated in the socialist era of controls, licensing, and sheltered economic engagements. Deploying the time-honoured factor of production—labour—with greater fairness and higher productively, aims to promote the nation’s global competitiveness while enhancing resilience in its economic activities.

Though the process of liberalizing the Indian economy and integrating with the external world was initiated in 1991, the domestic labour markets had remained virtually immune from any progressiveness. Varied national priorities, and absence of the requisite political will to undertake measures impacting a large section of society, had hitherto allowed the disequilibrium to subsist. Though the Union Government had framed the new laws in 2019 and 2020, these had been kept in a limbo. After a long hiatus, the same political configuration now dominates the Centre, the two Houses of Parliament, and 20 of the 29 provincial governments. That has prompted the NDA government to activate these enactments.