Shram Shakthi Niti 2025: A Desperate Effort to Implement Labour Codes and Deregulate Labour Law Governance

The Union Ministry of Labour & Employment released a draft policy titled Shram Shakthi Niti 2025 on 8th October 2025. The context and purpose of the policy state that it is rooted in constitutional values of equality, justice, and dignity. It claims legitimacy and moral authority from the Constitution of India, which lays the foundation for a just, inclusive, and welfare-oriented labour system, with the Fundamental Rights and Directive Principles as the basis of India’s labour governance framework. The policy claims to represent a renewed vision for a fair, inclusive, and future-ready labour ecosystem rooted in the civilisational ethos of Srama Dharma—prescribing the moral value of work.

However, the thrust of the draft policy defeats its stated purpose and context. Drawing inspiration from Srama Dharma—based on archaic scriptures such as Manusmriti and others—it attempts to implement the labour codes that stand in contrast to the values of the Indian Constitution.

The First National Labour Commission, headed by Justice P. B. Gajendragadkar, had recommended legislative measures to implement the Directive Principles of State Policy in 1969. But this policy has taken a direction totally contrary to that vision, while falsely claiming to be based on the Directive Principles. Its claims of inclusivity and fairness are therefore false and fraudulent.

Threshold Limits and Exclusivity

While the policy talks of inclusivity, large sections of workers remain excluded from the domain of existing labour laws due to increased threshold limits of employment for coverage, as enshrined in the Labour Codes.

The Codes—despite repeated insistence from trade unions—have not reduced these thresholds to expand coverage. Consequently, numerous establishments employing crores of workers remain outside the ambit of protection.

For instance, the threshold limit under the EPF Act is 20 workers, and under the ESI Act it is 10. Yet, the number of subscribers under EPF exceeds those under ESI, exposing the extent of non-compliance in these social security laws. Therefore, claims of universal coverage through digitisation and portability, without budgetary support, are futile and misleading.

Enforcement and the Deceptive Jugglery of Facilitation

In the policy document, the Ministry shamelessly asserts its “repositioning” as merely an employment facilitator, disregarding its mandated role as a regulator and enforcement authority.

This transformation strips the Ministry of its responsibility as custodian of labour law governance and inspection authority. It promotes self-certification, decriminalisation of employer offences (through the Jan Vishwas Act), and centralised random inspection via the Shram Suvidha Samadhan portal—all designed to dismantle the regulatory framework.

Abdicating the Custodian Role

The proposed restructuring reduces the Ministry of Labour & Employment to a mere facilitator, abandoning its duty to ensure compliance, regulate industrial relations, and enforce labour laws. This policy effectively empowers employers with impunity—granting them a license to violate even the diluted Labour Codes perpetually.

Where Are the Jobs to Facilitate?

Even for employment facilitation, jobs must exist. The Economic Survey 2024–25 reveals that 85 lakh jobs need to be created annually over the next decade. Yet, government policies and incentives—such as Production Linked Incentives (PLI) and Capex Incentives—have failed to deliver the promised employment.

Instead, employment-linked incentives are being misused to informalise formal sector jobs through apprentices, interns, and trainees—largely outside the purview of all labour laws.

Decreasing Share of Wages, Increasing Share of Profits

The Annual Survey of Industries shows that the share of wages in net value addition has declined from 30.27% in 1981–82 to 15.97% in 2023–24, while the share of employer profits has surged from 23.39% to 51.01% during the same period.

This has shrunk domestic demand, constrained investments despite huge corporate cash surpluses of over Rs. 10 lakh crore, and retarded formal job creation.

Hence, the government’s claim of being an “employment facilitator” is hollow—what it is actually facilitating is the stripping of workers’ rights to the advantage of the employers’ class.

Increasing Non-Compliance and Violations

Official data reveals a sharp decline in inspections—from 45,920 in 2014 to 35,125 in 2022—while violations increased from 54% to 57.2%. In 2022 alone, 58% of inspections under the Minimum Wages Act reported violations, affecting around 4.5 crore workers. 1,250 workers’ protests were suppressed during 2018–22, and 350 trade union leaders were arrested during 2020–23. 5,250 companies retrenched workers, resulting in 15 lakh job losses, including 2.5 lakh IT/ITES employees. 85% of food delivery workers earn below minimum wages; 70% of cab drivers lack social security and work 12–14 hours daily without overtime.

65% of women workers are denied maternity benefits, 70% are denied equal pay, and 40% have faced sexual harassment at workplaces. Over 35,000 EPF violations were reported in 2023 alone, amounting to dues exceeding Rs. 2,500 crore—mostly in garments and construction sectors.

85% of unorganised sector workers are not eligible for gratuity due to coverage thresholds.
Between 2018–22, 15,000 factory accidents and 4,500 deaths were recorded, with underreporting rampant. Over 12 lakh disputes remain pending, with an average disposal period of 3–5 years; only 25% are resolved within two years.

These figures expose the shameful state of implementation under the Ministry—long before its proposed “repositioning” as a facilitator. One can imagine the disastrous consequences when enforcement is formally abandoned.

Desperate Backdoor Attempt to Implement Labour Codes

The policy is a desperate attempt to justify the anti-worker provisions of the four labour codes in favour of corporate interests—both domestic and foreign.

It is a renewed version of laissez-faire, mixed with regressive ideas drawn from archaic Smriti scriptures. This destructive restructuring, pursued aggressively over the last 11 years of the Modi-led BJP government, is echoed in this policy.

Having failed to implement the Codes for nearly six years due to sustained resistance by the united trade union movement, the government is now attempting to push them through this policy regime. The policy aligns with the Prime Minister’s 2025 Independence Day speech calling for “third generation reforms,” including the ‘Dham Kam–Dhum Zyada’ (Less Cost–More Quality) mantra that promotes longer working hours.

The policy consciously ignores crucial issues such as strengthening conciliation and adjudication mechanisms, dispute resolution, freedom of association and collective bargaining, fair/living wages, working conditions of gig and unorganised workers, implementation of Directive Principles of the Constitution

Tripartite at Stake

The long-established tripartite mechanism of the Indian Labour Conference (ILC) and other consultative bodies is being dismantled. The government has not convened the ILC for the past 10 years, despite repeated demands from central trade unions and remarks from the Parliamentary Standing Committee.

Instead, the policy replaces tripartite structures with a unilateral “Annual Convergence Forum”, excluding workers’ organisations from bodies such as the National Labour & Employment Policy Implementation Council (NLPI Council), State Labour & Employment Missions, and District Labour & Resource Centres (DLERCs). This replacement of tripartite with unilateralism advances the neo-liberal corporate agenda.

Onslaught on Federalism

The policy undermines the federal character of the Constitution by centralising labour governance, despite labour being a Concurrent List subject. Through the proposed Labour & Employment Policy Evaluation Index (LPEI) and third-party reviews, the Centre seeks to benchmark and control state-level implementation—linking financial grants to states’ compliance with reform agendas. It proposes three phases of implementation—2025–27 (immediate), 2027–30 (medium-term), and beyond 2030 (long-term)—backed by a Labour Reforms Fund pooling central, state, and private resources.

Archaic Smriti-Based Governance Ethos

The Srama Dharma philosophy—drawn from Manusmriti and other ancient Smritis—is regressive and anti-labour, fundamentally at odds with the Constitution’s trinity of the Preamble, Fundamental Rights, and Directive Principles of State Policy.

It represents a retrograde effort to replace democratic, constitutional governance with a Hindutva-inspired Raj Dharma, founded on the ideological outlook of the RSS-BJP political project. Manusmriti—which prescribes caste-based occupations, forced labour, and denies women liberty—cannot form the moral basis of a modern democratic labour policy.

The Shram Shakthi Niti 2025, which seeks to shift India’s labour governance from compliance and regulation to “facilitation” and open-ended employer empowerment, must be resisted and scrapped. Any policy drawing inspiration from Manusmriti and similar archaic texts must be opposed with the constitutional values of equality, justice, and welfare.