Labour & Employment — Informal Sector, Labour Codes & Employment Generation

With reference to the Industrial Relations Code, 2020, consider the following statements:
1. It consolidates the Industrial Disputes Act, Trade Unions Act and Industrial Employment (Standing Orders) Act.
2. It raises the threshold for mandatory government permission before layoffs from 100 to 300 workers.
3. It abolishes the requirement of strike notice for all categories of industrial establishments.
Which of the statements given above is/are correct?
(a) 1 and 2 only  (b) 2 and 3 only  (c) 1 only  (d) 1, 2 and 3

Answer: (a) — Statements 1 and 2 are correct. Statement 3 is incorrect — the Code tightens (not abolishes) strike-notice requirements specifically for public utility services, not all establishments.

Disguised unemployment, characterised by near-zero marginal productivity of additional workers, is most prevalent in which sector of the Indian economy?
(a) Organised manufacturing  (b) Agriculture  (c) Information technology services  (d) Formal retail trade

Answer: (b) — Disguised unemployment is a classic feature of Indian agriculture, where family labour on small landholdings often exceeds what is productively required, driving marginal productivity toward zero.

The Periodic Labour Force Survey (PLFS) is conducted by which of the following?
(a) Ministry of Labour and Employment directly
(b) National Statistical Office (NSO), Ministry of Statistics and Programme Implementation
(c) NITI Aayog
(d) Labour Bureau, Chandigarh

Answer: (b) — PLFS has been conducted by the NSO since 2017, replacing the earlier quinquennial NSSO Employment-Unemployment Surveys. The Labour Bureau (option d) conducted earlier standalone employment surveys but is not the PLFS-conducting body.

Consider the following statements regarding the Bonded Labour System (Abolition) Act:
1. It was enacted in 1976.
2. It abolishes bonded/forced labour arising from debt-based exploitation.
3. Its enforcement has been complete, with no reported cases since enactment.
Which of the statements given above is/are correct?
(a) 1 and 2 only  (b) 2 and 3 only  (c) 1 only  (d) 1, 2 and 3

Answer: (a) — Statements 1 and 2 are correct. Statement 3 is factually false — despite legal abolition, enforcement gaps persist significantly, especially in brick kilns, agriculture and informal manufacturing.

Under the Child and Adolescent Labour (Prohibition and Regulation) Act, employment of children below what age is prohibited in all occupations?
(a) 12 years  (b) 14 years  (c) 16 years  (d) 18 years

Answer: (b) — The Act prohibits employment of children below 14 years in all occupations, aligning with the compulsory schooling age mandated under the Right to Education Act, 2009.

How many central labour laws were consolidated into the 4 Labour Codes passed by Parliament in 2019-2020?
(a) 19  (b) 24  (c) 29  (d) 33

Answer: (c) — 29 central labour laws were consolidated: 4 under the Code on Wages, 3 under the Industrial Relations Code, 13 under the OSH Code, and 9 under the Code on Social Security.

The Code on Social Security, 2020, for the first time in Indian labour law, statutorily defines and recognises which category of workers?
(a) Domestic workers  (b) Gig workers and platform workers  (c) Migrant agricultural labourers  (d) Anganwadi workers

Answer: (b) — The Code on Social Security, 2020 is the first Indian law to statutorily define "gig worker" and "platform worker" as distinct categories, extending social-security coverage funded via aggregator contributions.

The e-Shram Portal, launched in 2021, was created to build a national database of which category of workers?
(a) Registered trade union members  (b) EPFO-covered formal-sector employees  (c) Unorganised sector workers  (d) Government contractual employees

Answer: (c) — e-Shram creates a national database of unorganised-sector workers, enabling targeted social-security scheme delivery and cross-scheme portability of benefits.

Under the Industrial Relations Code, 2020, the threshold for mandatory prior government permission before layoffs, retrenchment or closure was raised from 100 workers to how many?
(a) 150  (b) 200  (c) 250  (d) 300

Answer: (d) — The threshold was raised from 100 to 300 workers, giving establishments below this size greater flexibility in retrenchment without prior government approval — a provision criticised by trade unions.

Worker Population Ratio (WPR) is correctly defined as:
(a) The percentage of the labour force that is unemployed
(b) The percentage of the working-age population that is employed
(c) The percentage of the total population employed in agriculture
(d) The ratio of formal to informal sector workers

Answer: (b) — WPR measures the share of the working-age population that is actually employed, distinct from LFPR (which includes both employed and those seeking work) and the unemployment rate.

Which scheme provides a voluntary, contributory pension of ₹3,000/month after age 60 for unorganised-sector workers aged 18-40?
(a) Atal Pension Yojana  (b) Pradhan Mantri Shram Yogi Maandhan (PM-SYM)  (c) National Pension System  (d) Employees' Pension Scheme

Answer: (b) — PM-SYM is a voluntary, contributory pension scheme specifically targeting unorganised workers aged 18-40, guaranteeing a minimum pension of ₹3,000/month post age 60.

Examine the linkages between gender, technology and unemployment challenges in the Indian informal sector.

Model Answer Structure:

1. Gender dimension: women overrepresented in low-paid, informal, home-based work with limited bargaining power and no social security.
2. Technology's disproportionate impact: automation and platformisation displace routine informal jobs (manual retail, low-skill manufacturing) faster than they create new formal ones.
3. Compounding vulnerability: women's unpaid care burden limits full labour-market participation even where formal opportunities exist.
4. Policy response — Social Security Code: statutory extension to gig/platform workers is a partial corrective, but coverage/enforcement gaps remain.
5. Skilling gap: women's access to digital/technical skilling programmes (PMKVY) remains lower than male counterparts, reinforcing the technology-displacement risk.
6. Way forward: gender-responsive skilling, care-economy investment (creches, elder care) to enable participation, and robust gig-worker protections.

"Success of Make in India programme depends on the success of Skill India programme and radical labour reforms." Discuss.

Model Answer Structure:

1. Linkage 1 — manufacturing needs skilled workforce: PLI-driven manufacturing expansion requires matching skill supply via PMKVY/DDU-GKY.
2. Linkage 2 — labour-market flexibility: rigid exit norms historically disincentivised formal hiring; Labour Codes' layoff-threshold relaxation (100→300) targets this.
3. Flexibility-vs-protection tension: trade unions argue flexibility gains come at the cost of worker security — a genuine trade-off, not a one-sided reform.
4. Evidence of gaps: skill-industry mismatch persists despite PMKVY; Labour Codes remain unimplemented nationwide due to state rule-framing delays.
5. International comparison: East Asian manufacturing-led growth combined skilling investment with labour-market flexibility — a template India is attempting to replicate.
6. Conclusion: both skilling and labour reform are necessary, mutually reinforcing conditions — neither alone suffices for Make in India's success.

Explain the rationale behind India's new Labour Codes and assess the concerns raised by trade unions regarding them.

Model Answer Structure:

1. Rationale — codification: 29 fragmented laws consolidated into 4 codes to reduce compliance burden and regulatory ambiguity.
2. Rationale — ease of doing business: single registration/licence regimes and rationalised inspection to attract investment and formal job creation.
3. Trade union concern 1: layoff-threshold relaxation (100→300 workers) seen as diluting retrenchment protection for a large share of factory workers.
4. Trade union concern 2: fixed-term employment category seen as enabling employers to avoid permanent-worker obligations, undermining job security.
5. Trade union concern 3: tightened strike-notice requirements seen as constraining collective bargaining leverage.
6. Balanced assessment: codes attempt to balance flexibility for employers with baseline protections (universal wage floor, gig-worker social security) — genuine tension remains unresolved pending implementation experience.

"Disguised unemployment is a hidden but severe form of unemployment in Indian agriculture." Discuss its implications for policy.

Model Answer Structure:

1. Define disguised unemployment: more workers engaged than needed, near-zero marginal productivity — statistically invisible in headline unemployment figures.
2. Why it's severe: masks true labour surplus, understates the urgency of structural transformation away from agriculture.
3. Root causes: land fragmentation, limited non-farm rural opportunity, social/familial obligation to remain on family land.
4. Policy implication 1: need for rural non-farm employment diversification (agro-processing, rural manufacturing clusters).
5. Policy implication 2: MGNREGA-style guaranteed employment as a partial safety-valve, not a structural solution.
6. Policy implication 3: skill development aligned to non-farm sector demand to enable labour transition out of overcrowded agriculture.

What are the salient features of a "National Employment Policy" that India needs, keeping in mind the dominance of the informal sector?

Model Answer Structure:

1. Feature 1 — universal social security floor: extending baseline protection regardless of formal/informal status (Social Security Code as a starting template).
2. Feature 2 — formalisation incentives: reducing compliance cost/complexity to encourage informal enterprises to formalise voluntarily.
3. Feature 3 — skill-employability alignment: demand-driven skilling linked directly to sectoral job creation (PLI-linked skilling).
4. Feature 4 — portability of benefits: e-Shram-style unified worker database enabling benefit continuity across employers/states/sectors.
5. Feature 5 — gender-responsive design: addressing care-work burden & safety concerns limiting female labour-force participation.
6. Conclusion: policy must shift from a formal-sector-centric employment framework to one designed around India's actual informal-majority workforce reality.

"Though child labour laws exist, enforcement remains weak in India." Critically examine.

Model Answer Structure:

1. Legal framework: Child & Adolescent Labour (Prohibition & Regulation) Act, 1986/2016 prohibits work below 14 years in all occupations.
2. Enforcement gap 1: weak inspection machinery, particularly in the informal sector where most violations occur and regulatory visibility is low.
3. Enforcement gap 2: poverty-driven demand for child labour by families as a survival strategy — a demand-side root cause laws alone cannot fix.
4. Enforcement gap 3: inter-state migration of child labourers complicates jurisdiction and rescue/rehabilitation continuity.
5. Corrective measures already in place: RTE Act's compulsory-schooling mandate as an indirect deterrent; PENCIL portal for complaint tracking.
6. Way forward: address poverty root-causes via income support, strengthen inspection capacity, and improve inter-state rehabilitation coordination.

"Labour reforms hold the key for the success of the 'Make in India' programme." Discuss.

Model Answer Structure:

1. Rigid exit norms as disincentive: pre-Code layoff-permission requirements above 100 workers discouraged large-scale formal hiring.
2. Labour Codes' response: layoff-threshold relaxation to 300 workers as a targeted reform to encourage formal-sector expansion.
3. Complementary need — infrastructure & skilling: labour reform alone is insufficient without matching logistics and skilled-workforce investment.
4. Risk of overreach: excessive flexibility without protection could suppress wage growth and worsen job insecurity.
5. Conclusion: labour reform is necessary but not sufficient — must be paired with skilling and ease-of-doing-business reform for Make in India's success.

Discuss the objectives and effectiveness of MGNREGA as an employment-guarantee and social-security instrument.

Model Answer Structure:

1. Objectives: 100-day guaranteed wage employment, durable rural asset creation, distress-migration reduction.
2. Effectiveness — income support: demonstrated countercyclical role during agrarian distress and COVID-19 reverse-migration crisis.
3. Effectiveness — asset creation: mixed record — quality of created assets (water conservation, roads) varies significantly by state implementation capacity.
4. Persistent challenge — payment delays: wage-payment delays undermine the guarantee's credibility and worker participation.
5. Persistent challenge — demand suppression: administrative rationing of work allocation despite legal entitlement to 100 days.
6. Conclusion: MGNREGA remains a vital social-security instrument but requires payment-timeliness and asset-quality reform for full effectiveness (cross-link Topic 05).

Discuss the Social Security Code, 2020's provisions for extending social security to unorganised, gig and platform workers.

Model Answer Structure:

1. Statutory recognition: first Indian law to define "gig worker" and "platform worker" as distinct legal categories.
2. Funding mechanism: Social Security Fund financed through aggregator contributions (1-2% of annual turnover, subject to a cap).
3. Benefit coverage: life/disability cover, health and maternity benefits, old-age protection for informal/gig workers.
4. Implementation vehicle: e-Shram registration as the delivery backbone linking workers to entitlements.
5. Limitations: "independent contractor" classification by platforms still limits access to minimum-wage and collective-bargaining protections beyond the Code's scope.
6. State-level pioneering: Rajasthan's Platform-Based Gig Workers Act, 2023 as a complementary state-level welfare-fund model.