Govt asks EPFO to conduct study on impact of workforce formalisation

Panel seeks report in three months amid push on labour codes, eshram and social security coverage

The central government has asked the Employees’ Provident Fund Organisation (EPFO) to conduct a study to assess whether moving informal workers into formal jobs really improves their income stability, benefits, and job security within the next three months.

 

“The committee noted that in response to the original recommendation made to the Government, to periodically study whether formalisation leads to sustained income security, social protection and long term employment, especially among informal workers, it has been stated by the Government in the reply that EPFO has (been) tasked with conducting a study through Pandit Deendayal Upadhyaya National Academy of Social Security (PDNASS) within 3 months and submit Action Taken Report in the matter. The committee desires that the study be conducted within the prescribed time limit and that its findings be shared with the committee,” the 29th report of the standing committee on finance tabled in the Parliament last week said.

 

This comes amid a push for workforce formalisation by the government through several steps such as the rollout of the labour Codes and measures to drive up EPFO enrolment and social security coverage.

 

The committee noted that there has been a delay in the implementation of the Code on Social Security, 2020, and urged the Centre to pursue the state governments to publish the rules under the Codes.

 

As of now, West Bengal, Lakshadweep, NCT of Delhi, and Tamil Nadu are yet to publish the rules for one or more of the Codes.

 

Enquiring further on the success of labour market initiatives, the committee asked whether leveraging eShram to register platform workers, and integrating it with the PM Gati Shakti National Master Plan (PMGS-NMP) has actually helped improve the quality of the workforce.

 

The panel also flagged the growing impact of artificial intelligence (AI) on the labour market, warning that while AI could create opportunities, it could also disrupt jobs. It recommended prioritising labour-intensive micro, small and medium enterprises (MSMEs) under ‘Make in India’ and Gati Shakti to ensure that AI remains labour-augmenting rather than labour-replacing.

 

“Furthermore, the Committee advocates for a strategic focus on the tourism sector, as promoting certified hospitality training, eco-tourism, and medical tourism is crucial for employment growth, particularly in light of recent Budget announcements for the sector,” said the report.

 

In the Union Budget 2026-27, finance minister Nirmala Sitharaman announced several initiatives to promote tourism and tourism-led job creation. Some of these initiatives included launching a scheme to support states in creating five regional medical hubs for medical tourism, a pilot scheme for upskilling 10,000 guides in 20 major tourist districts, and developing 15 archaeological sites across different destinations in India.

 

Additionally, the committee has pushed for the establishment of a centralized Labour Market Information System (LMIS) to bridge the gap between job supply and demand. 

Parliament panel’s view

• There has been delay in implementation of the Code on Social Security, 2020
• Questions whether leveraging eShram to register platform workers, and integrating it with PMGS-NMP actually improved quality of workforce
• Flags growing impact of AI on the labour market, warning it could disrupt jobs