New labour codes to slash compliance burden, boost India's competitiveness: Labour Secretary
Synopsis
India's new labour codes will collapse 29 laws into four, slashing over 1,000 sections and nearly 1,100 rules. Labour Secretary Vandana Gurnani says a digital-first, risk-based inspection model will replace intrusive enforcement — a structural shift that could reshape how MSMEs and large industry alike handle workforce compliance.
Key Takeaways
Labour Secretary Vandana Gurnani outlined new labour code implementation plans at an ASSOCHAM event in New Delhi on Wednesday, 13 May .
The reforms consolidate 29 labour laws into 4 codes , reducing sections from 1,228 to 480 and rules from 1,436 to 357 .
A digital-first, risk-based inspection model will replace traditional enforcement, minimising human interface.
EPFO CEO Ramesh Krishnamurthi announced API-based return filing, automated account transfers, and simplified withdrawal mechanisms.
MSMEs are expected to benefit significantly from reduced procedural complexities under the new framework.
The new framework is projected to support higher exports, greater formalisation of employment, and stronger investment inflows.
Labour Secretary Vandana Gurnani on Wednesday said the government is working closely with states and industry stakeholders to ensure a smooth, technology-driven implementation of the new labour codes, aimed at reducing compliance burden, improving worker welfare, and enhancing India's global competitiveness. She was speaking at an ASSOCHAM event titled New Labour Codes: Implementation, Compliance to Competitive Advantage & Industry Readiness in New Delhi.
Key Reforms Under the New Labour Codes
According to Gurnani, the reforms consolidate 29 labour laws into four labour codes, reducing 1,228 sections to 480 sections and streamlining 1,436 rules into 357 rules, significantly simplifying India's labour compliance ecosystem. The government has undertaken extensive consultations with states to harmonise implementation frameworks and compliance mechanisms.
Point of View
And the consolidation of 29 laws into four codes is genuinely significant on paper. The harder question is implementation velocity — states retain concurrent jurisdiction over labour, and harmonisation has historically stalled at that seam. The shift to risk-based, data-driven inspections is the right direction, but its credibility depends entirely on whether EPFO's digital infrastructure can handle scale without exclusion. MSMEs, which employ the bulk of India's informal workforce, stand to gain the most — or lose the most if the transition is rushed without adequate handholding.
NationPress
3 Jul 2026
Frequently Asked Questions
What are the new labour codes in India?
The new labour codes consolidate 29 existing labour laws into four codes, reducing 1,228 sections to 480 and streamlining 1,436 rules into 357. They aim to simplify compliance, improve worker welfare, and enhance India's global competitiveness.
How will the new labour codes affect MSMEs?
Micro, small and medium enterprises are expected to benefit significantly from simplified digital compliance systems and reduced procedural complexities under the new framework. The digital-first approach is specifically designed to lower the compliance burden on smaller businesses.
What changes is EPFO making under the new labour codes?
EPFO CEO Ramesh Krishnamurthi announced the introduction of API-based return filing systems, automated account transfer facilities, and simplified withdrawal mechanisms. Inspections will increasingly rely on data analytics and web-based systems to identify high-risk non-compliance cases.
What is the government's approach to inspections under the new labour codes?
The government is adopting a risk-based, technology-enabled inspection model focused on facilitation rather than intrusive enforcement. The objective, as stated by Labour Secretary Vandana Gurnani, is to minimise unnecessary human interface and encourage voluntary compliance.
Why are the new labour codes significant for India's competitiveness?
The reforms are expected to support higher exports, increased formalisation of employment, and stronger investment inflows by simplifying the compliance ecosystem. Labour Secretary Gurnani described the reforms as an opportunity rather than merely a compliance requirement.
