QEP 2025-26 Theme Manufacturing & Labour TheIAShub
QEP 2025-26 Theme Manufacturing & Labour TheIAShub
INDEX
1 PREVIOUS YEAR QUESTIONS (2013-2024) 2
- Repeated Themes from PYQs
- Expected Questions For 2025/26
2 FACTSHEET: Manufacturing & Labour 5
3 THEME WISE KEYWORDS: As per Usage in Body of Answer & Way forward 8
4 CASE STUDIES & BEST PRACTICES: LOCAL, NATIONAL & INTERNATIONAL 11
5 FROM THE SPEECHES: PM, PRESIDENT, & VP 12
6 MANUFACTURING SECTOR: CHALLENGES & WAY FORWARD 13
7 REVISITING GLOBAL SUPPLY CHAIN 16
8 MSME SECTOR: KEY CHALLENGES & FUTURE PROSPECTS 19
9 SEMICONDUCTOR INDUSTRY IN INDIA 23
10 ANSWER WRITING VIA TEMPLATES: MACROECONOMIC & QEP FRAMEWORK 25
11 DEMOGRPAHIC DIVIDEND & CHALLENGES OF EMPLOYMENT CREATION 30
12 INFORMALIZATION OF EMPLOYMENT 32
13 SUGGESTIVE MEASURES: LABOUR REFORMS 33
14 KEY GOVERNMENT INITIATIVES FOR LABOUR REFORMS 35
15 LABOUR LAW REFORMS: NEED & CHALLENGES 36
16 AUTOMATION: A CHALLENGE TO WORKFORCE? 43
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
2015
GS3
• There is a clear acknowledgement that Special Economic Zones (SEZs) are a tool of industrial development,
manufacturing and exports. Recognizing this potential, the whole instrumentality of SEZs requires
augmentation. Discuss the issues plaguing the success of SEZs with respect to taxation, governing laws
and administration.
• “Success of make in India program depends on the success of Skill India programme and radical labour
reforms.” Discuss with logical arguments.
2016
GS3
• How globalization has led to the reduction of employment in the formal sector of the Indian economy? Is
increased informalization detrimental to the development of the country?
2017
GS3
• Account for the failure of manufacturing sector in achieving the goal of labour-intensive exports rather
than capital-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive
exports.
• Industrial growth rate has lagged behind in the overall growth of Gross-Domestic-Product(GDP) in the
post-reform period” Give reasons. How far the recent changes in Industrial Policy are capable of
increasing the industrial growth rate?
2018
GS 1
• What is the significance of Industrial Corridors in India? Identifying industrial corridors, explain their
main characteristics.
2019
GS 1
• Can the strategy of regional resource-based manufacturing help in promoting employment in India?
2021
GS 1
• Examine the role of ‘Gig Economy’ in the process of empowerment of women in India.
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2022
GS 3
• “Economic growth in the recent past has been led by increase in labour productivity”. Explain this
statement. Suggest the growth pattern that will lead to creation of more jobs without compromising
labour productivity.
2023
GS 3
• Faster economic growth requires increased share of the manufacturing sector in GDP, particularly of
MSMEs. Comment on the present policies of the Government in this regard.
• Most of the unemployment in India is structural in nature. Examine the methodology adopted to
compute unemployment in the country and suggest improvements.
2024
GS 3
• Discuss the merits and demerits of the four ‘Labour Codes’ in the context of labour market reforms in
India. What has been the progress so far in this regard?
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2 KEYFACTS
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• Global major producers: Taiwan, S. Korea, Japan, USA, & China (75% of global
capacity in East Asia.)
Automobile • Contribution: 7% of GDP, >25% of Industrial GDP, 50% of manufacturing GDP
• Contribution to Exports – 8%
• Globally: India 3rd largest automobile market in the world (after China & USA).
- Largest manufacturer of two-wheelers, three-wheelers and tractors in the
world, and 5th largest vehicle manufacturer overall.
Gems and Jewelry • Contribution to GDP - around 7%
• Contribution to Merchandise Exports: 15% (India among top 7 Exporters: 3.5%
of the world’s total exports).
• Diamond Advantage: >90% of the world's diamonds are cut and polished in India
Textile Contribution
• India’s GDP - 2%; Industry Output: 7%; India’s Total Exports earnings – 15%
International Competitive advantage
• Fibre Production: 2nd largest textile fibre producer in the world
- Largest jute producer, 2nd largest producer of silk and cotton.
• Technical Textile - 6th largest producer globally
• Exports: 3rd largest exporter of Textiles & Apparel in the world.
Leather Contribution
• Synthetic leather accounts for 90% of the total leather manufacturing.
• Gender inclusive - 30% of total employed are women
• Has one of the youngest workforce with 55% of workforce below 35 years of age
International Competitive advantage
• 2nd largest producer of Footwear and 2nd largest exporter of Leather Garments.
• A strong base for raw materials – India has 20% of the world’s cattle and buffalo
and 10% of the world’s goat and sheep population.
e- Commerce • India’s e-commerce market: Fastest growing in the world (20% annually).
• Online Retail Market: 3% of total retail market & 25% of organized retail market.
• Increased Adoption: > 60% of orders from tier-2 cities & smaller towns.
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Unemployment rate (UR) • UR improved from the 45-year high of 6% in 2017-18 to 3% in 2023-24
• Male’s UR (3%) = Women’s UR (3%)
[PLFS 2023-24]
• Urban UR (5%) is more than twice of Rural UR (2.5%)
Youth & Unemployment • Labor force participation rate (LFPR) of youth - >45% (lower than LFPR of Workage
population [15-59 yrs])
(age group of 15-29 yrs)
• Unemployment rate among youth – about 10% (in Double Digits).
[PLFS 2023-24]
• Urban youth unemployment > Rural (15% vs 8.5%)
Unemployment & • UR for Educated persons (secondary & above level education) – 7% (greater in urban
Education Level [PLFS areas than rural).
2023-24] • Unemployment among non-literate – 0.2%
Migrant Labour (‘Circular • Total number of internal migrants in India (inter state & intra state) – about 45
Migrants’) crore or 37% of the population.
[Census 2011] • Interstate workers - 5.5 crore
• Economic Contribution - Contribute 10% of India’s GDP. High Internal
remittances contribution ➔ immense poverty and inequality reducing potential.
Gig Workers
• In India, there are about 15 million gig workers (ASSOCHAM report).
• India’s gig economy has the potential to serve up to 30% of India’s non-farm
workforce and add up to 1.25% to India’s GDP.
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1
Crony Capitalism
2
Challenges of Manufacturing Sector
3
MSME
• Dwarf Vs. Giants (MSME), Policy that fosters Dwarfism, ‘Perverse Incentive to remain small’
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Exports
• Export Superstars
• Champion sectors
• Sunrise Sectors
5
Sustainable Manufacturing
• Circular economy
6
Labour & Employment
• Good Jobs: FBSE: Formal & Productive, Bang For Buck, Social Transformation, Export & Growth
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8
• Policy Balm + Big Bang Structural Reform = India as Global Manufacturing Powerhouse
• Make in India for the World + Assembly hub for the world = India as Global Manufacturing Powerhouse
9
From Manufacturing Unit to Manufacturing Destination
10
From ‘Credit worthy MSMEs’ to 'MSME worthy Banks’
11
‘Idea to Innovation to Industry’ (‘Idea, Innovate, Incubate and Industry).
12
From Labour Intensive to Labour Sensitive
13
From ‘Informalisation Trap’ to ‘Sweet synthesis of Social Security & Skills’
14
From Mere Investment driven to Productivity driven economic growth
15
• From Job Seekers to Job Creators
16
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INTERNATIONAL
• Mittelstand Companies, Germany: They are small and medium-sized enterprises (SMEs) that specialize
in niche industries. These companies play a crucial role in Germany's manufacturing landscape,
contributing to innovation, adaptability, and flexibility.
• Vietnam’s integration in Global Supply Chains: Today, Vietnam is the 2nd largest smartphone exporter,
producing 40% of Samsung’s global mobile phone products and employing 35% of its global staff.
- Facilitating factors - Stable investment climate; Abundant low-skilled & low-cost labour.
✓ Proximity - Most of the electronic inputs imported by Vietnam are from China; Hong Kong SAR,
China; Japan; Korea; Singapore; Taiwan, China; and Thailand.
• Bangladesh Apparel Sector: How Foreign firm benefitted Domestic Firms
- Foreign firms created incentives for local suppliers to improve their quality & productivity.
- Spillover effects of shared suppliers: Domestic firms that shared local suppliers with foreign firms
gained access to newer and better local inputs.
- Today, Bangladesh is 3rd largest exporter of apparels and footwear after China and Vietnam.
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- Stiff competition from South-East Asian and other South Asian countries (Bangladesh/Vietnam in
apparels; Vietnam and Indonesia in leather and footwear)
• Limited capital access - high interest rates making borrowing costlier, unwillingness of banks to lend
due to rising NPAs, FDI limited to bigger firms, fluctuating exchange rates making External Commercial
Borrowing (ECBs) costly etc.
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• Aligning to new tax regime – The change makes the norms of classification growth- oriented and aligns
classification norms to the new tax regime revolving around GST, which captures turnover details of
enterprises.
• Improves Information Access - A turnover based definition, coupled with incentives for filing GST, will
encourage MSME to file taxes and transact through banks, resulting in improved information availability
on the sector for the policy makers.
• Enhance Ease of doing business - An enterprise would automatically move on to the requisite slot after
attaining a specific turnover and it would not require fulfilment of tedious formalities. The consequent
growth will pave the way for increased direct & indirect employment in MSME sector.
• In line with Global norms - The clear and unambiguous definition is also in consonance with global
norms and learns from the best practices across countries.
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
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• Ensuring Credit Access – MUDRA Yojana, PSB 59 Minute Loan, Udyamimitra loan Portal, India Aspiration Fund,
Trade Receivables e-Discounting System (TReDS) portal, Credit Guarantee Fund Trust for MSEs, etc.
• Enhance Productivity & innovation
- ASPIRE – A Scheme for promotion of Innovation, Rural Industry and Entrepreneurship
- SFURTI - Scheme of fund for Regeneration of Traditional Industries
- Aatmanirbhar Bharat ARISE-ANIC Initiative to promote research & innovation in MSMEs.
- Lean Manufacturing Competitiveness Scheme
• Improve access to Technology - Credit Linked Capital Subsidy Scheme for Technology Upgradation, Zero
Defect, Zero effect scheme (to deliver quality products using clean technology), Digital MSME scheme
• Professional support & Training
- Champions Portal: a single window solution to handhold the MSMEs throughout the business lifecycle.
- Udhyami Mitra Yojna - To promote and support new MSMEs in getting NOC, legal compliance, capital,
training, plants-machinery-technology etc. to startup entrepreneurs.
- National SC/ST hub - It is to provide professional support to entrepreneurs from SC/ST.
- Udhyam Sakhi - A one stop platform portal launched for emerging women entrepreneurs of India.
- Udyam Abhilasha - A National Level Entrepreneurship Awareness Campaign by SIDBI to train rural youth in
aspirational districts to be entrepreneurs.
• Grievance Redressal - MSME Samadhaan to empower MSEs to directly register cases of delayed payments.
• Improving Govt. interface
- Udyam Registration: Portal for registration of MSME. No supporting documents at the time of online filing.
- Public Procurement - MSME Sambandh portal to monitor the implementation of the Public Procurement
from MSMEs by CPSE.
- MSME Data Bank: enables the Ministry of MSME to streamline and monitor the schemes and pass on the
benefits directly to MSMEs.
• Skill - PM Kaushal Vikas Yojana
• Initiatives Under Aatmanirbhar Bharat Abhiyan Package
- Equity infusion for MSMEs through Fund of Funds.
- Collateral free automatic loans to meet operational liabilities and restart businesses.
- Expediting payment of dues to MSMEs: from Govt/ CPSEs to be released within 45 days.
- Insolvency resolution: A special insolvency resolution framework for MSMEs under IBC
- e-market linkage for MSMEs to act as a replacement for trade fairs and exhibitions.
- Disallowing global tenders: upto Rs. 200 cr in government procurement tenders to protect Indian MSMEs
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9.2 BACKGROUNDER
ABOUT SEMICON INDIA PROGRAM 4 Schemes under Semicon India
• Launched in 2021 by Ministry of Electronics and 1. Scheme for setting up of Display Fabs
Information Technology (Meity). 2. Set up of Semiconductor Fabs
• Aim: Provide financial incentive to companies that are 3. Set up of Compound Semiconductors/
engaged in semiconductor manufacturing. Silicon Photonics/ Sensors Fab,
• Nodal agency for schemes approved under Semicon Semiconductor Assembly, Testing, facilities.
India: India Semiconductor Mission (ISM) 4. Design Linked Incentive (DLI) Scheme.
- ISM is a specialised and independent Business
Division within Digital India Corporation (DIC) to build a vibrant semiconductor ecosystem.
✓ DIC is a not-for-profit Company set up by MeitY, that leads and guides in realizing the vision,
objectives and goals of the Digital India program.
- Composition: An advisory board consisting of leading global experts in the field of semiconductors.
About Semiconductor
• It is a material (composed of
Silicon, Germanium etc.) that
fits between a conductor (full
conductivity) and an insulator
(no conductivity), designed to
manage and control the flow
of current in electronic devices
and equipment. Hence, the
name semiconductor.
• Global major producers -
Taiwan, South Korea, Japan,
USA, and China (75% of global
capacity in East Asia).
• Semiconductors Market in
India: $25 billion; projected
reach $80 billion by 2028.
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• Industry 4.0 & Modern Electronics: essential component for advanced technologies like AI, Quantum
computing, Block chain applications, 5G, IoT, Self-driven vehicles, Drones etc.
• Climate Change & Clean Energy: Semiconductor chips are key components in several green technologies
like EVs, solar panels, turbines, LEDs etc ➔ meet India net zero carbon emissions Target.
• Positive Spillover Effect: Health Sector (AI/ML Tools performing complex surgeries), Boost to Space
Economy (Satellite, Launch Vehicles, Deep space probes), Precision Agriculture, Smart energy etc.
• Success of Government big ticket reforms like Make in India, Digital India, $ 5 trillion economy, Aatma
Nirbhar Bharat depends on how India achieves self-sufficiency in chip production.
• National security: By reducing dependence on imported semiconductors, safeguarding critical
infrastructure, defense system, sensitive data from vulnerabilities.
• Employment generation - in domains like design, fabrication, assembly, testing etc.
• Stable Forex: A vibrant & competitive semiconductor ecosystem will help India boost export earnings
by tapping global market & save huge Forex (India imports 100% of SC Chips) ➔ narrow trade deficit.
KEY CHALLENGES
• Highly capital-intensive: Manufacturer has to maintain a large volume production facility to support
volume orders that will result in very high investment in the beginning.
• High maintenance & Infra dependency: They require high-quality supply of pure water, uninterrupted
electricity, etc. For e.g. TSMC alone uses almost 5% of all Taiwan’s electricity
• Lack of highly-skilled labour & technology:
- Education trend more inclined towards software rather than core technology like semiconductor.
- Inadequacy of institutes engaged in cutting edge research in advanced semiconductor manufacture
• Scarcity of raw materials: From a value-chain perspective, SC production needs silicon, Germanium &
Gallium arsenide, and Silicon carbide which are not available in India and needs to be imported.
• Adverse effect on environment: Many toxic materials are used in the fabrication process such as
arsenic, antimony, and phosphorous, along with high global warming potential fluorinated compounds.
• Other Factors: Gaps in meeting global products standard, Intellectual Property Rights issues, Inadequate
Credit availability, Administrative delays, Inadequate R&D and Innovation ecosystem.
OTHER KEY GOVT. INITIATIVES
WAY FORWARD (Includes NITI Aayog recommendations)
• Production Linked Incentive scheme (PLI)
• Strategic policy & Legal framework: covering entire
• Chips to Startup (C2S) Programme: train high-
chip-making value chain ie. design centers, testing
quality engineers.
facilities, packaging, etc. Legislative backing to policy
• Modified Special Incentive Package Scheme
& incentives on the lines of USA & EU Chips Act.
(M-SIPS) for Semiconductors.
• Sustainable Logistics & Infrastructure: Required for a
• Digital RISC-V (DIR-V) program: production of
modern Fab, with swift transportation, a large
microprocessors & achieving industry-grade
quantity of pure water, uninterrupted electricity,
silicon & designs.
communication, a pollutant-free environment, etc.
• Industry & academia collaboration: Jointly designed curriculum & promotion of a start-up culture
among faculty & students in higher educational institutes through initial capital and mentoring.
- For eg. 'Semiconductor Startup Incubation and Acceleration Program (SSIAP)' at IIT Hyderabad.
• ‘Friend Shoring’ for secure supply: Government trade & foreign policies to focus on securing access to
foreign technology & input suppliers in friendly countries (For Eg. QUAD, S. Korea, Taiwan etc).
- Securing Rare Earth elements by investing in offshore reserve eg. Lithium triangle in S. America.
• Gain Gradual Expertise: India can start with assembly, testing, marking, and packaging (ATMP) that
generates more employment and require less investment than full-fledged Fabs.
- Can gradually enter and master complex R&D and advanced semiconductor manufacturing.
• Other Measures: Facilitative tax & IPR regime, Industrial clusters, funding across value chain, etc.
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11.1 INTRODUCTION
• India enjoys a place of pride in the international arena not only as the fastest emerging economy, but
also as a vast pool of dynamic human resources.
• While most of developed world is moving towards ageing population, India has:
- The largest youth population in the world with around 27% of the population in the age group of
15-29 years and 65% of population below 35 years of age.
• India, by harnessing this youth power & demographic dividend, can become “skill capital” of the world.
• However, the present demographic advantage of India is predicted to saturate by 2040. Thus, there is
very narrow window to harness it.
- The employability of this pool of creative talent has been the highest concern.
• India currently needs ‘twin reforms’:
- Creating ‘gainful employment’ opportunities for nearly 10-12 million people joining the labour
market every year.
- Bringing informal sector workers into a formalised set up by creating ‘high productivity – high
wage’ jobs.
• Thus, the focus of government has been on promoting self-employment and entrepreneurship,
transforming youth into ‘job creators’ from ‘job seekers’ ➔ ‘Empowering through Enterprise’.
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• Absence of holistic labour policy: Introduction of piecemeal reforms in labour laws from time to time,
while a holistic national labour policy is elusive.
• Roadblocks to key government initiatives – Unresolved Labour sector issues neutralise government
initiatives to put Indian economy on the path of 10% growth rate – for eg. Make in India, Skill India, Start
up India, Smart cities, making India an export hub, etc.
• High trust deficit & socio economic losses - Trust deficit between workers and Management and lack of
effective industrial dispute resolution mechanism leading to increased discontent, lockouts, loss of
production ➔ tarnishing India’s image as an investment destination eg. Maruti lockout, leading to loss
of lives of management personnels.
• Challenges to fostering spirit of entrepreneurship – ‘Risk averse’ mind set of people, lack of access to
credit, market linkages, space, network, and mentors.
• Ineffective linkage (disintermediation) between prospective employers and employees - This has led
to labour shortage in some parts of the country, with excess labour supply in other parts.
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12 INFORMALIZATION OF EMPLOYMENT
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
• Increasing Female Labour Force Participation – through access to capital, market linkages, education &
skill development, reforms in laws, formation of SHGs, removal of traditional gender barriers etc.
• Urbanization – Create new job magnets like Gurgaon near Delhi, Whitefield near Bangalore, Mohali
near Chandigarh etc.
• Boost exports – Creation of strong networks of manufacturing units and integrating them with global
supply chain is required to make use of export-led growth in manufacturing, especially in labour
intensive sectors like textile and apparel industry.
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
• The Code on Wages Bill consolidates the following 4 acts - Minimum Wages Act, 1948, Payment of Bonus
Act, 1965, Payment of Wages Act, 1936, and Equal Remuneration Act, 1976.
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
• Holistic Coverage - It seeks to regulate wage & bonus payments in all employments where any industry,
trade, business, or manufacture is carried out, including, government establishments & private sector.
• Floor wage - The central government will fix a floor wage, taking into account living standards of workers
and it may set different floor wages for different geographical areas.
- Provides for the consultative mechanism for determining the national minimum wage
• National Minimum Wage – Centre/States to keep Minimum wages more than or equal to Floor Wages.
• Periodic revision of Minimum wages by Centre & states ➔ revised every 5 years or less.
• Other features – fixed working hours (by Centre/States), rest day once a week, overtime (at least twice
the normal rate of wages) etc.
• Prohibition of Gender discrimination - in matters related to wages and recruitment of employees for
the same work or work of similar nature.
• Provisions regarding Penalties - Penalties for different types of violations rationalized. Amount of fines
varying as per the gravity of violations and repeat of the offences.
• Advisory Board – by Centre & states
- Board having representation from (i) employers, (ii) employees (in equal number as employers), (iii)
independent persons, and (iv) five representatives of state governments.
- One-third of the total members will be women.
• Social security funds for unorganised workers, gig workers and platform workers shall be set up by the
Central government. Similarly, State governments also to set up separate social security funds.
• National Social Security Board - for the purposes of welfare of unorganised workers, gig workers and
platform workers, and recommend and monitor schemes for them.
• Role of aggregators - Schemes for gig workers and platform workers may be funded through a
combination of contributions from the central government, state governments, and aggregators.
- For this purpose, the Code specifies a list of aggregators in Schedule 7 (such as ride sharing services,
food and grocery delivery services, content and media services, and e-marketplaces).
• Changes in definitions
- Expanding the definition of ‘employees’ to include workers employed through contractors.
- Expanding the definition of “inter-state migrant workers” to include self-employed workers from
another state.
- Expanding the definition of “platform worker” to additional categories of services or activities as
may be notified by the government.
- Expanding the definition of audio-visual productions to include films, web-based serials, talk shows,
reality shows and sports shows.
• Additional powers during an epidemic - The central government may defer or reduce the employer’s
or employee’s contributions (under PF and ESI) for a period of up to 3 months in the case of a pandemic,
endemic, or national disaster.
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
• Rationalization of labour law - Amalgamates 13 labour laws including the Factories Act, 1948; the Mines
Act, 1952; the Building and Other Construction Workers Act, 1996; the Contract Labour Act, 1970 etc.
• Coverage
- Factories - Threshold increased to: (i) 20 workers for premises where the manufacturing process is
carried out using power, and (ii) 40 workers for premises where it is carried out without using power.
- All Establishments engaged in hazardous activity - regardless of the number of workers.
- Contract workers - It will apply to establishments or contractors employing 50 or more workers,
including contract labour engaged through a contractor by central and state governments.
• Exemption – It empowers the state government to exempt any new factory from the provisions of the
Code in order to create more economic activity and employment.
• Contract labour regulation & prohibition
- Prohibits contract labour in core activities, with certain exceptions.
- It defines a list of non-core activities where the prohibition would not apply for eg. (i) sanitation
workers, (ii) security services, and (iii) any activity of intermittent nature.
• Daily work hour limit - Fixes the maximum limit at eight hours per day.
• Employment of women
- Women will be entitled to be employed in all establishments for all types of work under the act.
- Employer to provide adequate safeguards prior to employment in hazardous/dangerous operations
• Inter-state migrant workers and unorganized workers
- Definition of inter state migrant worker
✓ A person who has been recruited by an employer or contractor for working in another state or
any person who moves on his own to another state and obtains employment there.
✓ Only those persons will be considered who are earning a maximum of Rs 18,000 per month.
- Benefits for inter-state migrant workers: These include: (i) option to avail the benefits of the public
distribution system either in the native state or the state of employment, (ii) availability of benefits
available under the building and other construction cess fund in the state of employment, and (iii)
insurance and provident fund benefits available to other workers in the same establishment.
- Database for inter-state migrant workers: to be maintained by Central and state governments.
Inter-state migrant worker can register themselves on the basis of self-declaration and Aadhaar.
• Establishment of Social Security Fund: for the welfare of unorganised workers.
• Fixation of standards - Centre empowered to prescribe standards on occupational safety and health.
- National/State Occupational Safety and Health Advisory Board to recommend standards.
- Safety Committee & Safety Officer in certain factories and establishments.
• Mandatory Annual health check – to be provided by the employer
• Mandatory Appointment letters for all workers - which must underline their rights to statutory benefits
• Other provisions - Various welfare provisions regarding washing facilities, fixed working hours, extra
wages for overtime, prohibition of overlapping shifts etc. are included in the code.
• Rationalization - simplify/replace the 3 laws: Trade Unions Act, 1926; Industrial Employment Act, 1946
and the Industrial Disputes Act, 1947.
• Defines Workers - ‘workers’ to include all persons employed in a skilled or unskilled, manual, technical,
operational & clerical capacity, supervisory staff drawing up to ₹18,000 a month as salary.
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
• Eased rigidity in retrenchment – Employee limit increased from 100 to 300, above which the
government approval is needed for layoff/retrenchment/closure.
• Exemption - The appropriate government may exempt any new industrial establishment or class of
establishments from the provisions of the Code in public interest.
• Standing orders - All industrial establishments with at least 300 workers must prepare standing orders
on certain matters. These include: (i) classification of workers, (ii) manner of informing workers about
hours of work, holidays, paydays, and wage rates, (iii) termination of employment, (iv) suspension for
misconduct, and (v) grievance redressal mechanisms for workers.
• Trade unions - Trade unions that have a membership of at least 10% of the workers or 100 workers,
whichever is less, will be registered. The central or state government may recognise a trade union or a
federation of trade unions as Central or State Trade Unions, respectively.
• Sole Negotiating Union - If there are more than one registered trade union of workers functioning in an
establishment, the trade union having more than 51% of the workers as members would be recognised
as the sole negotiating union.
• Negotiation Council - If no trade union is eligible as sole negotiating union, a negotiating council will be
formed consisting of representatives of unions that have at least 20% of the workers as members.
• Tribunals for settlement of disputes - The worker may apply to the Industrial Tribunal for adjudication
of the dispute, 45 days after the application for the conciliation of the dispute is made.
• Fixed term employment – It has been introduced giving employers the flexibility to hire workers based
on requirement through a written contract. Fixed term employees are treated on a par with permanent
workers in terms of hours of work, wages, allowances and other benefits, including statutory benefits
such as gratuity.
• Right to Strike based on certain pre-conditions
- The Code prohibits strikes and lock-outs in all industrial establishments without notice. The 2020
code requires all persons to give a prior notice of 14 days before a strike or lock-out.
- This notice is valid for a maximum of 60 days.
- The Code also prohibits strikes and lock-outs: (i) during and up to 7 days after a conciliation
proceeding, and (ii) during and up to 60 days after proceedings before a tribunal.
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
• Fixed-Term Employment (FTE): Such Contractual employees to get all statutory entitlements, similar to
regular workers.
• Provisions for better resolution of disputes: The provision for a 14-day notice period before strikes and
lockdowns would allow both workers and employers to attempt resolving the issues.
LABOUR CODES: KEY CONCERNS
• Delegated Legislation - Many essential features of the law are not specified in the Codes but have been
delegated to be prescribed by the government through Rules.
- For eg. setting the thresholds for application of various social security schemes, specifying safety
standards and working conditions, the power to increase the threshold for establishments that have
to seek permission before retrenchment etc.
• Power to exempt establishments - Central and the state government have wide discretion in providing
exemptions from these codes, including those related to hours of work, safety standards, retrenchment
process, collective bargaining rights, contract labour.
• No universalization of Social Security – The gig, platform & unorganized sector worker continue to be
covered by discretionary schemes since the benefits, such as pension and medical insurance, are
mandatory only for establishments with a certain minimum number of employees.
• Overlapping definition – The code defines a gig, a platform & an unorganized sector worker separately.
But, in practical terms, there might be an overlap between the 3 categories.
• Strikes & lock-outs may become difficult for all establishments due to provision relating to prior notice.
• Fixed term employment – the Code does not restrict the type of work in which fixed term workers may
be hired. Therefore, they may be hired for roles offered to permanent workmen, which otherwise is
prohibited for contract labour.
• Implementation challenges
- Transitional challenges in moving from old to new system.
- Without reforms in Labour enforcement machinery & attitudes of the officials, the reform in laws
will not lead to desired impact.
- Various provisions are at the discretion of the states which might breed non uniformity in
implementation or non implementation.
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
16.1 INTRODUCTION
• Technological advancement and pace of change will significantly affect the availability of jobs, type, and
location causing a Paradigm shift.
• Machines will replace some jobs, and new jobs will be created while existing jobs may take on a new set
of tasks. It is, therefore, essential that automations are sustainable & able to create benefits for people.
16.2 AUTOMATION: OPPORTUNITIES
• Powerful drivers of economic opportunity: By automating repetitive tasks, machines lead to higher
efficiency and lower operational cost ➔ benefits can be passed on to worker & customers.
• Improved working conditions: by reducing the need for manual labour, which can be physically
demanding and dangerous ➔ reduced workplace injuries and an improvement in overall well-being.
• Improved Safety: Robots are also increasingly used in places that demand high output and zero error.
For eg. Aviation, Automobile, Pharma industry etc.
• Improved customer service: by providing more accurate and faster responses to customer queries,
which can help to improve customer satisfaction. For eg. Chatbots.
• New job creation: Emergence of New business models & changing nature of jobs are expected to create
new, high skilled jobs such as Robotic, Programming, Data Scientists, etc.
• Promote Social Equality
- By improving the quality of existing jobs: This will lead people to be more productive and eligible
for higher remuneration.
- Non-discriminatory access – Technology serves to remove entry barriers (caste, religion, gender,
and location) ie. anyone can participate from anywhere ➔ accessible to the vulnerable group.
16.3 AUTOMATION: CHALLENGES
• Job Losses: with maximum impact on semi and unskilled labours, who make up a substantial portion of
the workforce in manufacturing & agricultural sector. Esp. Women workforce.
• Large-scale displacement of the workforce: As location and type of jobs will change.
• Limitation of New jobs: The new jobs created will not be a one-to-one substitute of the existing jobs.
- Access to new jobs created may be difficult without acquiring adequate skills.
• Vicious cycle of a weak economy: Surging unemployment will reduce consumer demand and damage
social cohesion.
• Aggravate Income inequality: as the jobs that are replaced by machines tend to be lower-paying and
lower-skilled, while the jobs created by automation tend to be higher-paying & require specialized skills.
• Reduced bargaining power for workers: as companies may be able to reduce labour costs by replacing
workers with machines. This can result in lower wages and fewer benefits for workers.
• Reduced productivity gains: The introduction of the advanced machine tool may worsen the work
environment if investment in training workforce has not done in advance ➔ loss for the businesses.
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QUALITY ENRICHMENT PROGRAMME (QEP): TARGET 2025/26
Under the Guidance of M K YADAV
• Impact assessments: Government/ Research institutions need to investigate how technological changes
will affect employment, what are the opportunities for consumers, manufacturers and other
stakeholders involved in the entire supply chain management.
• Special protection to semi-skilled and unskilled workforces and labour intensive manufacturing units
like construction, agriculture ➔ targeted programmes that focus on skilling/reskilling.
- Nuanced Extension of social security net in case of widespread income/job losses.
Conclusion: Thus, a ‘culture of adaptability and lifelong learning’ will be crucial for spreading the benefits of
automation widely through society.
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