Discuss the trend of increasing informality in India's employment sector. What measures can be adopted to safeguard the rights of informal workers amidst changing labour regulations?

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Introduction

Informal employment refers to jobs that lack formal contracts, social security, job security, and labour protection.
Despite economic growth, over 80–90% of India’s workforce remains informal, indicating a persistent trend of informality across sectors.

Trend of Increasing Informality in India

Informalisation within the formal sector: Even registered firms increasingly rely on contractual, gig, and outsourced workers instead of permanent employees.
Rise of gig and platform economy: Growth of digital platforms (delivery, ride-hailing) has created flexible but unprotected employment.
Shift towards service sector: Many service jobs such as retail, logistics, and hospitality are low-wage and informal in nature.
Subcontracting and supply chains: Large firms outsource production to small and unregistered enterprises, pushing workers into informal arrangements.
Weak enforcement of labour laws: Limited inspection capacity and regulatory loopholes allow non-compliance with labour standards.
Impact of economic shocks: Events such as demonetisation, GST transition, and COVID-19 pushed many workers into informal or precarious work.

Measures to Safeguard Informal Workers

Universal social security: Effective implementation of the e-Shram portal and extension of schemes like health insurance, pensions, and accident coverage to informal workers.
Strengthening labour codes: Ensure the Code on Social Security, 2020 includes gig, platform, and unorganised workers with enforceable benefits.
Portable welfare benefits: Enable portability of benefits for migrant workers through digital identity systems.
Formalisation incentives: Provide tax benefits, credit access, and simplified compliance for MSMEs to encourage formal employment.
Collective representation: Promote trade unions, worker cooperatives, and platform worker associations.
Skill development: Enhance upskilling and reskilling programmes to enable transition to better-quality jobs.

Conclusion

Addressing informality requires strong labour protection, universal social security, and supportive economic policies, ensuring that growth translates into dignified and secure employment.

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