GS 3 – Economy
Context
- Quess Corp’s Pulse Report (FY25) highlights a notable transition of India’s workforce from informal to formal employment.
Key Trends
- Formal Workforce Size: Currently, 13.1% of the workforce is in the formal sector.
- EPFO Expansion:
- Net new subscribers in FY25 reached a record 139.78 lakh.
- Over 61% are below age 29, reflecting early youth entry into formal jobs.
- Female Workforce:
- Female LFPR rose to 41.7% (2023-24).
- However, women accounted for only 25% of new EPFO subscribers.
- EPFO Overview: A statutory body under the Ministry of Labour & Employment that administers PF, pension, and insurance schemes for organised workers.
Challenges
- Persisting Informality: About 85% of workers remain outside structured payroll and social protection.
- Sectoral Imbalance: Agriculture dominates employment; non-farm sectors are not absorbing workers sufficiently.
- Gender Gaps: Low female share in new formal jobs despite higher LFPR.
- Job Quality Issues: Growth of gig and temporary work (projected 23.5 crore by 2030) raises concerns over wage security and benefits.
- Compliance Hurdles: Smaller businesses in coaching, logistics, and trade struggle with GST, EPFO-ESI mandates, and payroll digitisation.
Government Initiatives
- Make in India – Promote manufacturing-led job creation.
- ELI Scheme – Incentivises companies based on net new job creation.
- Labour Codes (2020) – Consolidated 29 laws into 4 codes, streamlining social security and formalisation.
- PLI Schemes – Boost formal jobs in manufacturing & electronics.
- Udyam Assist Portal – Brings micro & small business workers into the formal net.
- Skill India & PMKVY 4.0 – Industry-linked skilling for formal employment readiness.
- Shram Suvidha Portal – Unified compliance platform for MSMEs.
- GST Reduction (18% → 5%) – Lowers cost of formal hiring via staffing agencies.
Way Forward
- Inclusive Hiring: Stronger incentives for female employment; expand flexible work models and urban childcare support.
- Youth Skilling: Link apprenticeships with EPFO-registered firms for smoother transition to formal jobs.
- Gig Worker Protection: Extend portable social security benefits under the Code on Social Security.
- Balanced Regional Growth: Promote labour-intensive industries beyond Maharashtra, Karnataka, Delhi to reduce regional disparities.