Labour Ministry Unveils Draft Policy to Overhaul India’s Employment Framework

The Union Ministry of Labour and Employment has released the draft National Labour and Employment Policy – Shram Shakti Niti 2025 for public consultation, setting out an ambitious framework to modernise India’s labour ecosystem. The draft seeks to link worker protection with productivity, emphasising the creation of green and technology-enabled jobs to meet future demands.

The ministry describes the policy as the country’s first comprehensive attempt to outline a national approach to labour and employment. It argues that India’s workforce policies must evolve to keep pace with automation, climate transition, and the growth of gig and platform work, while addressing persistent challenges such as informality, gender gaps, and wage disparity.

The ministry has invited stakeholders and experts to submit their comments on the draft policy by October 27.

A senior official says the policy “aims to ensure protection, productivity, and participation for every worker, while enabling enterprises to grow sustainably.” According to the Ministry, the draft frames work as central to India’s economic and social fabric, seeking a balance between worker welfare and business competitiveness. Sources says discussions are also underway to rename the Ministry to better reflect India’s cultural ethos, as the term “labour” is considered foreign and inadequate.

The draft redefines the ministry’s role from regulator to “employment facilitator.” It proposes integrating existing national databases, such as, the Employees’ Provident Fund Organisation, Employees’ State Insurance Corporation, e-Shram, and the National Career Service (NCS), into a unified “Labour Stack.” This digital ecosystem is meant to support benefit portability and simplify compliance, while providing data for evidence-based policymaking.

The NCS is to be expanded as India’s Digital Public Infrastructure for Employment, equipped with multilingual access and AI-driven tools for job matching, and skill and credential verification. The ministry says this will help connect talent with opportunities in Tier-II and Tier-III cities, rural districts, and MSME clusters.

At the local level, District Labour Resource Centres are proposed as single-window facilities for worker registration, skilling, start-up incubation, and grievance redressal. These centres are intended to serve as on-ground extensions of the national employment network.

Women’s participation in the workforce, among the lowest globally, has also been identified as a key area of reform. The draft sets a target of increasing female labour-force participation to 35% by 2030 through measures such as safer workplaces, affordable childcare, flexible work options, and equal pay. It also acknowledges the growing significance of gig and platform work, calling for ways to extend social-security coverage to such workers.

Implementation of Shram Shakti Niti 2025 will take place in three phases. The first phase between 2025 and 2027 will focus on establishing institutions and integrating data systems; the second between 2027 and 2030 on expansion and a nationwide rollout of a Universal Social Security Account; and the third, beyond 2030, on consolidation of central and state systems under a “One Nation Integrated Workforce Architecture." Progress will be tracked through a Labour and Employment Policy Evaluation Index benchmarking state performance on inclusion, coverage, and safety.