Labour reforms to create 77 lakh jobs, boost consumption by Rs 75,000 crore: SBI report

New Delhi, Nov 25 (IANS) India’s new Labour Codes, after a short transition phase, could reduce unemployment by up to 1.3 per cent over the medium term, depending on reform implementation, firm-level adjustment costs, and complementary state-level rules, an SBI Research report said on Tuesday.

This would imply additional employment generation of 77 lakh people based on current labour force participation rate (15 years +) at 60.1 per cent and average working age population at 70.7 per cent across rural and urban workforce.

“With a saving rate of approximately 30 per cent, the implementation will result in a consumption boost Rs 66 per person per day post implementation. This could lead to an approximate consumption boost of Rs 75,000 crore. Thus, the labour codes implementation is poised to give a major boost to consumption as well,” said Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor, State Bank of India.

The report said that the implementation of new labour codes will empower both workers and enterprises, building a workforce that is protected, productive and aligned with the evolving world of work — paving the way for a more resilient, competitive and self-reliant nation.

In India, about 44 crore people are working in unorganised sector. Out of which around 31 crore unorganised workers are registered under e-shram portal.

“By assuming 20 per cent will shift from informal pay-roll to formal payroll, it will benefit around 10 crore beneficiaries. With this we expect, India’s social security coverage may reach 80-85 per cent in the next 2-3 years.

According to the PLFS dataset, the share of formal workers in India is estimated to be 60.4 per cent . We estimate a 15.1 per cent increase in the formalisation rate post the implementation of 4 labour codes pushing labour market formalisation to 75.5 per cent, the report mentioned.

On November 21, the government has implemented the 4-comprehensive Labour Codes , which were enacted by Parliament in 2019 and 2020. Together, these Codes empower both workers and enterprises, building a workforce that is protected, productive and aligned with the evolving world of work — paving the way for a more resilient, competitive and self-reliant nation.

—IANS

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