Economic Survey 2025-26: New labour codes aim to simplify compliance, enhance labour market flexibility

The Economic Survey 2025-26, tabled by Finance Minister Nirmala Sitharaman in Lok Sabha on Thursday, January 29, says that that the New Labour Codes implemented by the government in November last year aim to simplify compliance, enhance labour market flexibility and extend security to a broader section of the workforce.

The Economic Survey noted that four codes were notified (on November 21, 2025), and rules are expected to be in place in the next few months.

It suggested that as definitions of work continue to evolve, dynamic labour policy and flexible regulatory frameworks would ensure employment expansion, worker security and well-being.

“The recognition of the gig and platform workers, with provisions to enable their registration and inclusion within social security schemes, marks a step towards formalising non-traditional forms of employment. Complementing these reforms, government-led skilling initiatives have focused on enhancing employability through industry-aligned training. Together, these measures aim to strengthen labour market resilience, improve job quality, and better align workforce capabilities with the requirements of a rapidly changing economy,” the document said.

“The transition will require coordination and investment from the private sector. Companies must enhance their systems, update policies, reevaluate workforce models, and improve their digital readiness to remain competitive, Survey added.

The Survey highlighted that e-Shram portal is steadily bridging the gap between informal and formal employment, serving as a key institutional mechanism for extending social protection to unorganised workers.

The portal serves as a National Database of Unorganised Workers, which includes data on construction workers, migrant workers, gig and platform workers, street vendors, domestic workers, and agriculture workers.

As of January 2026, the portal has successfully registered over 31 crore unorganised workers.

The four Labour Codes have consolidated 29 central laws to streamline regulations and extend protections to workers.

Complementing the roll-out of the Centre’s Labour Codes, 32 states/UTs have published draft rules under the Codes, it noted.

Going forward, ensuring algorithmic transparency and promoting worker-friendly practices will be crucial, it suggested.