New Delhi, Nov 25 (NationPress) A recent report from SBI Research indicates that India's new Labour Codes, following a brief transition period, have the potential to decrease unemployment by as much as 1.3% over the medium term. This reduction is contingent on how effectively the reforms are implemented, the costs of firm-level adjustments, and the introduction of complementary state-level regulations.

The implication is significant, with the potential to generate an additional 77 lakh jobs based on the current labour force participation rate of 60.1% for individuals aged 15 and above, and an average working age population of 70.7% across both rural and urban areas.

According to Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor at the State Bank of India, “With a savings rate around 30%, the rollout of these reforms could result in a daily consumption increase of ₹66 per person. This translates to an estimated overall boost of ₹75,000 crore in consumption. Thus, the implementation of the Labour Codes is set to significantly enhance consumption as well.”

The report further emphasizes that enforcing the new Labour Codes will empower both employees and businesses, creating a workforce that is secure, efficient, and in tune with the changing dynamics of work. This will ultimately contribute to a more resilient, competitive, and self-reliant nation.

Currently, approximately 44 crore individuals are engaged in the unorganised sector, with around 31 crore of them registered on the e-Shram portal.

“Assuming that 20% will transition from informal to formal payroll, this could benefit about 10 crore individuals. Consequently, we anticipate that India's social security coverage may increase to 80-85% within the next 2-3 years,” the report adds.

Based on the PLFS dataset, the share of formal workers in India is estimated at 60.4%. The report forecasts a 15.1% increase in the formalization rate post-implementation of the four labour codes, which would elevate labour market formalization to 75.5%.

The government enacted the comprehensive Labour Codes on November 21, which were legislated by Parliament in 2019 and 2020. Together, these codes are designed to empower both workers and enterprises, fostering a workforce that is secure, productive, and aligned with the contemporary world of work — setting the stage for a more resilient, competitive, and self-reliant nation.