DMPQ-“Labour codes need to be drafted keeping in mind realities of informal sector workers.”

. Finance Minister Nirmala Sitharaman in her budget speech referred to the implementation of the four labour codes, closing the process that started 20 years ago. She also mentioned a handsome Rs 15,700 crore for MSMEs, more than double of this year’s budget estimate.

The announcements are welcome if they provide job and social security to informal workers. India’s estimated 450 million informal workers comprise 90 per cent of its total workforce, with 5-10 million workers added annually. Nearly 40 per cent of these employed with MSMEs.

The financial year 2020-21 had been a tough year economically — the economy is expected to contract by 7.7 per cent. So, while there is an urgent need to revive the economy by generating employment, the COVID-19 experience tells us that there is also a need to provide social protection, especially to the 450 million informal sector workers.

For instance, while on paper, the draft rules envisage wider coverage through the inclusion of informal sector and gig workers, at present the draft rules apply to manufacturing firms with over 299 workers. This leaves 71 per cent of manufacturing companies out of its purview.

It is also unclear as to how these benefits will be applicable in the larger scheme of things. For instance, will a migrant worker with an Aadhaar card registered in her/his home state of Bihar be eligible for social security benefits in Gujarat where she/he is currently employed? It is, therefore, important for the draft rules to clearly state how their applicability will unfold with respect to the migrant informal workforce. According to a recent IHD report, the total number of vulnerable migrant workers could range from 115 million to 140 million.

The draft rules fail to cater to the growing informal workforce in India — a workforce of contract and casual labour without the safety and security net extended to the formal sector. The growing informal nature of the workforce and the lack of the state’s accountability makes it a breeding ground for rising inequality. The workers face the risk of violations of their human and labour rights, dignity of livelihood, unsafe and unregulated working conditions and lower wages apart, among several other vulnerabilities. They are devoid of any employment security, paid leaves, health benefits or social security. These vulnerabilities of the informal sector became even more prominent as the entire country went into a state of suspension due to the lockdown enforced as a state response to the pandemic. The existing social security schemes failed to provide protection during such times of crisis, and one can only hope that the same mistakes aren’t repeated.

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