Ministry Of Labour And Employment: Empowering Workers And Strengthening Employment Security In India

Policy Update
Aditi Kumari

Introduction

The Ministry of Labour and Employment (MoLE), one of India’s oldest and most vital federal ministries, is responsible for enforcing labor laws and ensuring social security. It plays a crucial role in safeguarding workers’ rights and promoting social welfare.

As per the latest provisional estimates for 2023-24, employment in India surged to 64.33 crore, a significant rise from 47.15 crore in 2014-15, reflecting a growth of 17.18 crore jobs. Between 2016-17 and 2022-23, employment expanded by 36%, adding nearly 170 million jobs. This sustained job creation underscores India’s strong economic trajectory and the dynamic expansion of key sectors.

Functions

The Ministry of Labour & Employment is responsible for safeguarding workers’ rights, ensuring social security, and promoting a safe and productive work environment. It formulates and enforces labor laws governing wages, employment conditions, occupational safety, industrial relations, and social welfare. The Ministry focuses on protecting vulnerable workers, including those in the unorganized sector, while fostering skill development and employment services. As labor falls under the Concurrent List of the Constitution, both the Central and State Governments enact and implement labor-related legislation. Currently, 44 central labor laws address key aspects such as wages, social security, workplace safety, and trade union formation.

E-Shram Portal

The E-Shram Portal, launched on 26th August 2021 by the Ministry of Labour and Employment, is a national database for unorganized workers (NDUW). It aims to empower workers by enabling Aadhaar-linked registration for targeted welfare schemes and benefits.

As of December 19, 2024, the portal has over 30.48 crore registrations, with Uttar Pradesh, Bihar, and West Bengal leading in numbers. Recognized internationally, the E-Shram Portal is transforming India’s unorganized workforce by ensuring financial security and inclusive growth.

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Source: Ministry of Labour and Employment

Implementation of Schemes by the Ministry of Labour & Employment

These schemes aim to provide financial security, healthcare benefits, employment opportunities, and housing, thereby improving the overall well-being of workers and their families. Below is a detailed overview of these schemes.

1. Social Security and Welfare Schemes for Workers

(i) Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) & Pradhan Mantri Suraksha Bima Yojana (PMSBY)

These schemes provide affordable insurance coverage to workers, ensuring financial security in case of death or disability.
PMJJBY offers life insurance coverage of ₹2 lakh at an annual premium of ₹436. In case of the policyholder’s death, the insured amount is given to the nominee.
It provides accidental insurance coverage of ₹2 lakh at an annual premium of ₹20. It covers accidental death and disability due to an accident.

These schemes ensure that workers’ families receive financial assistance in times of crisis.

(ii) PM SVANidhi Scheme

This scheme supports street vendors by providing easy access to working capital loans.
It offers collateral-free loans starting from ₹10,000, which can be increased up to ₹50,000 in subsequent phases based on repayment performance.
Beneficiaries receive interest subsidies on timely repayments.
Promotes digital transactions by offering cashback incentives.

This initiative helps street vendors restart and expand their businesses and improving their economic stability.

(iii) Pradhan Mantri Awas Yojana (PMAY)

PMAY aims to provide affordable housing to low-income urban and rural households.
Financial assistance is provided to construct or renovate houses.
Beneficiaries receive subsidized interest rates on home loans.

By ensuring access to quality housing, PMAY enhances the living conditions of workers and their families.

(iv) Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY)

This scheme provides free healthcare to economically vulnerable sections of society.
Each beneficiary family gets health coverage of ₹5 lakh per year.
Covers hospitalization costs for various medical treatments.
Provides cashless treatment in empaneled hospitals across India.

PM-JAY ensures that workers and their families receive necessary medical care without financial burden.

2. Central Sector Schemes by the Ministry of Labour and Employment

(i) Labour Welfare Scheme (LWS)

This scheme benefits Beedi, Cine, and Non-Coal Mineworkers and their families through:

Health: Medical assistance and healthcare support.
Scholarship: Financial aid for the education of workers’ children.
Housing: Assistance for home construction or improvement.

(ii) Aatmanirbhar Bharat Rojgar Yojana (ABRY)

Launched on 1st October 2020, as part of the Atmanirbhar Bharat Package 3.0, this scheme promotes employment generation post-COVID-19.
Encourages employers to hire new employees by providing financial incentives.
Restores lost jobs due to the pandemic.
Extends social security benefits to workers.

(iii) National Career Service (NCS)

A project to transform the National Employment Service by offering:
Job matching for job seekers and employers.
Career counseling and vocational guidance for skill development.
Information on skill development courses, apprenticeships and internships.

The scheme has three key components:

1. NCS Portal (www.ncs.gov.in) – Online job search platform.

2. Model Career Centres (MCCs) – Provide career services and employment guidance.

3. Interlinking of Employment Exchanges – Connects job seekers with opportunities.

(iv) Employees’ Pension Scheme (EPS), 1995

Implemented through the Employees’ Provident Fund Organization (EPFO), this scheme provides:

Pension benefits to employees after retirement.
Family pension for dependents in case of the employee’s demise.

(v) Rehabilitation of Bonded Labourers

Aims to identify and rehabilitate bonded laborers by providing:
Financial assistance for rehabilitation.
Skill training and employment support to ensure sustainable livelihoods.

(vi) Health Services through Employees’ State Insurance Corporation (ESIC)

Provides comprehensive healthcare and social security benefits to employees and their dependents.
Free medical treatment for injured workers.
Maternity benefits, disability benefits, and dependent support.

3. Employment Generation & Social Security Schemes

(i) Pradhan Mantri Garib Kalyan Yojana (PMGKY)

Introduced to support workers during the COVID-19 pandemic, this scheme provided:
Government contribution of 24% (12% employer + 12% employee) of EPF wages from March to August 2020.
This applied to establishments with up to 100 employees, where 90% of employees earned ₹15,000 or less.

4. Pension Scheme for Unorganized Workers

Pradhan Mantri Shram Yogi Maandhan (PM-SYM)

This voluntary contributory pension scheme ensures financial security for unorganized workers.

Eligibility:

Workers in home-based occupations, street vending, mid-day meal work, brick kilns, domestic work, rickshaw pulling, construction work, and similar jobs.
Monthly income should be ₹15,000 or less.
Must be 18-40 years old.
Should not be covered under NPS, ESIC, or EPFO.
Should not be an income taxpayer.

Benefits:

After the age of 60, workers receive a monthly pension of ₹3,000.
The Government matches the worker’s monthly contribution.

By enrolling in these initiatives, workers can secure a better future for themselves and their families.

Impact

The Employment Condition Index (ECI), featured in the India Employment Report 2024, assesses employment quality across 22 states using seven key indicators beyond unemployment rates. It measures factors like formal employment, worker population ratio, casual labor share, and youth unemployment. Calculated using the maximum-minimum range method, the index ranges from 0 to 1, with higher values indicating better employment conditions.

India’s ECI improved from 0.40 in 2005 to 0.65 in 2022, but regional disparities persist. Himachal Pradesh, Delhi, Telangana, and Jammu & Kashmir ranked highest due to improved employment for women and expanding formal jobs, while Bihar, Odisha, Jharkhand, and West Bengal remained at the bottom, reflecting weak labor markets. Haryana and Punjab saw a decline due to rising casual labor and youth disengagement, whereas Kerala, Tamil Nadu, and Gujarat improved with higher formal employment and lower casual labor.

The ECI provides crucial insights for policymakers, highlighting the need for targeted interventions to boost formal employment, reduce informal work, and improve youth engagement. It underscores the importance of region-specific labor reforms to bridge employment gaps and enhance workforce stability across India.

Way Forward

The Ministry must expand its schemes and tighten implementation. Addressing regional disparities in the Employment Condition Index demands decisive action. States like Bihar, Odisha, Jharkhand, and West Bengal need focused support. Digital infrastructure must be boosted so workers can easily access schemes. Simplifying application processes will help unorganized workers benefit from these initiatives. Programs like the National Career Service and apprenticeships can open new doors and reduce youth unemployment.

Skill development must keep pace with industry trends. Emphasizing technology, renewable energy, and healthcare is crucial. Women’s participation must be strengthened with flexible work arrangements and childcare support. Collaboration between government, private sector, and civil society is key. Public-private partnerships can spark job creation. Strong labor laws will ensure fair wages and safe workplaces. Together, these steps will build a resilient, inclusive labor market that propels India forward.

Conclusion

India’s labor policies and social security initiatives have significantly contributed to improving the well-being of workers, yet challenges remain in ensuring universal coverage and sustainable employment. While the Employment Condition Index indicates progress, persistent regional and sectoral inequalities highlight the need for continuous reforms. By fostering a more structured and formalized labor market, India can achieve long-term economic growth while ensuring dignity, financial stability, and social security for all workers.

References

About the Ministry of Labour & Employment. (2023). Government of India, Ministry of Labour & Employment. https://labour.gov.in/about-ministry
Employment in the country. (2024). Ministry of Labour & Employment. https://pib.gov.in/PressReleasePage.aspx?PRID=2081179#:~:text=As%20per%20the%20latest%20data,24%20is%20about%2017.18%20crore.
About the E-Shram Portal. (2024). Ministry of Labour and Employment. https://pib.gov.in/PressReleasePage.aspx?PRID=2086193
Schemes For The Welfare Of Labourers. (2024). Ministry of Labour & Employment. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2035279
Employment Generation Schemes. (2024). Directorate General of Employment (DGE) in the Ministry of Labour and Employment. https://dge.gov.in/dge/schemes_programmes
Employment Condition Index. (2024). International Labour Organization. https://www.ilo.org/sites/default/files/2024-08/India%20Employment%20-%20web_8%20April.pdf

About the Author: Aditi Kumari is a research intern at the Impact and Policy Research Institute (IMPRI), pursuing Post graduation in Sociology.

Acknowledgement: The author extends sincere gratitude to Dr Arjun Kumar and Aasthaba Jadeja for their invaluable guidance and to Avi Sharma and Arjun for their informative inputs.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.