Sharm Shakti Niti 2025 Transforms Labour Employment Policy

The draft Shram Shakti Niti 2025 marks a very important change in India’s labour and employment strategy. It urges the Ministry of Labour and Employment to shift from mere regulation to active facilitation of jobs. The policy emphasises digital tools to connect workers with employers and align skills with market demands. This approach recognises that government recruitment alone cannot generate enough jobs. Instead, the State must support private sector employment through infrastructure, oversight, and digital assistance.

Shift from Regulation to Facilitation

The policy proposes that the labour ministry become a facilitator rather than just a regulator. It aims to promote job creation by supporting private industry and improving digital connectivity between workers and employers. The National Career Service platform will act as a central public portal for job matching, skill training, and worker credential verification.

Focus on Informal, Gig, and Rural Workers

More than 80 percent of India’s workforce is informal, gig-based, or rural. Shram Shakti Niti targets these groups through initiatives like education-to-employment ‘career lounges’ that link private industry with training and job opportunities. However, challenges remain as many informal workers lack internet access, proper documentation, and awareness of government schemes.

Digital Platforms and Coordination Challenges

Previous efforts to unify labour databases such as the Employees’ Provident Fund Organisation and e-SHRAM have faced coordination issues and fragmented data. Some states like Kerala have shown success with district-level registration and welfare systems combining digital tracking and on-ground support. Yet, digital solutions alone cannot solve deep structural issues in the labour market.

Structural Labour Market Issues

Labour rights enforcement is weak and public investment in health, education, and skilling is insufficient. Only a small formal sector enjoys statutory protections. The majority work in insecure informal jobs. Migrant workers face high risks and low wages with minimal regulatory oversight. Intermediaries such as recruitment agents further limit their bargaining power, perpetuating informality.

Gender Inclusion Challenges

The policy aims to increase women’s workforce participation to 35 percent by 2030. However, this goal is difficult due to scarce childcare, unsafe mobility, and limited part-time or flexible jobs outside metropolitan areas. Addressing these barriers is essential for improving gender inclusion in the workforce.

Need for Institutional Support Beyond Digital Tools

For Shram Shakti Niti to succeed, it requires more than digital platforms. It must address structural inequalities and the digital divide. Building strong institutions and support systems at the grassroots level is crucial to provide real assistance to informal and vulnerable workers.

Questions for UPSC:

1. Critically discuss the role of digital platforms in transforming India’s labour market and their limitations in addressing informal employment.
2. Examine the challenges faced by migrant workers in India’s informal sector and analyse policy measures to improve their working conditions and social security.
3. Estimate the impact of gender inclusion policies on women’s workforce participation in India and point out the socio-economic barriers that hinder progress.
4. Analyse the importance of institutional support and public investment in health, education, and skilling for enhancing labour market outcomes in developing economies.

Answer Hints:

1. Critically discuss the role of digital platforms in transforming India’s labour market and their limitations in addressing informal employment.

1. Digital platforms like National Career Service enable job matching, skill training, and credential verification, improving transparency and access.
2. They facilitate connections between workers and employers, supporting private-sector employment growth beyond government recruitment.
3. Informal, gig, and rural workers face digital divide issues – limited internet access, lack of documents, and low awareness hinder platform use.
4. Fragmented databases and poor coordination among agencies (e.g., EPFO, e-SHRAM) reduce effectiveness of unified digital solutions.
5. Successful state models (e.g., Kerala) combine digital tracking with on-ground support, showing digital tools alone are insufficient.
6. Digital platforms do not address deeper structural problems like weak labour rights enforcement and informal job insecurity.

2. Examine the challenges faced by migrant workers in India’s informal sector and analyse policy measures to improve their working conditions and social security.

1. Migrant workers often lack proper documentation, face limited regulatory oversight, and work in low-wage, high-risk informal jobs.
2. Recruitment agents as intermediaries reduce bargaining power and reinforce informality and exploitation.
3. Limited access to social security schemes and fragmented welfare delivery weaken migrant protections.
4. Policy focus on digital registration platforms (e.g., e-SHRAM) aims to unify data but faces coordination and awareness challenges.
5. State-level initiatives with district-based registration and welfare (e.g., Kerala) offer better coverage and support models.
6. Improving health, education, and skilling investments alongside legal enforcement is essential for sustainable migrant worker welfare.

3. Estimate the impact of gender inclusion policies on women’s workforce participation in India and point out the socio-economic barriers that hinder progress.

1. Goal to raise women’s workforce participation to 35% by 2030 reflects policy emphasis on gender inclusion.
2. Barriers include scarce childcare facilities, unsafe mobility, and limited part-time or flexible job opportunities outside metros.
3. Social norms and household responsibilities restrict women’s labour market engagement, especially in rural and informal sectors.
4. Formal sector protections and incentives for female employment remain inadequate, limiting participation growth.
5. Improved infrastructure, safety measures, and flexible work options are critical to enhance women’s employment.
6. Addressing educational and skill gaps among women is necessary to increase employability and economic empowerment.

4. Analyse the importance of institutional support and public investment in health, education, and skilling for enhancing labour market outcomes in developing economies.

1. Strong institutions ensure enforcement of labour rights and delivery of social security, reducing informality and vulnerability.
2. Public investment in health improves workforce productivity and reduces absenteeism due to illness.
3. Education and skilling investments align worker capabilities with industry demands, enhancing employability and wages.
4. Institutional support facilitates integration of informal workers into formal economy and access to benefits.
5. Developing economies face challenges of fragmented systems and weak governance, requiring coordinated policy efforts.
6. Long-term economic growth and social equity depend on sustained investment in human capital and institutional capacity.