Formulation of Shram Shakti Niti 2025: UPSC Current Affairs Story Arc

Overview

The Shram Shakti Niti 2025 is India's first integrated National Labour & Employment Policy, designed to synchronize fragmented labor laws into a cohesive roadmap for 'Viksit Bharat @2047'. Released by the Ministry of Labour & Employment, the policy transitions the government's role from a 'regulator' to a 'facilitator' of labor. It tackles the massive challenge of informalization, where nearly 400 million workers lack social safety nets. By proposing a Universal Social Security Account (USSA), the policy aims to make benefits like pensions and health insurance portable across jobs and states. This arc reflects the government's response to the rising gig economy and the urgent need for occupational safety in a changing climate and digital landscape.

How This Story Evolved

Draft policy released → Critique/Analysis of gaps published → Further policy details (USSA) released

1. 2025-10-09: Draft National Labour & Employment Policy – Shram Shakti Niti 2025
   More details

   UPSC Angle: Draft National Labour & Employment Policy – Shram Shakti Niti 2025 released.

   Key Facts:

   • Draft National Labour & Employment Policy – Shram Shakti Niti 2025 released by the Ministry of Labour & Employment
   • Aims to create a fair, inclusive, and future-ready world of work
   • Aligned with Viksit Bharat @2047
   • Aims to ensure dignity, protection, and opportunity for every worker
   • Seven core objectives: universal social security, occupational safety, gender and youth empowerment, future-readiness, and green jobs
2. 2025-11-12: Shram Shakti Niti 2025: Gaps and Challenges
   More details

   UPSC Angle: Shram Shakti Niti 2025 aims for a fair labour system.

   Key Facts:

   • 90% of workers are informally employed (2024 ILO)
   • Around 11 million people live in modern slavery in India
   • Female labour force participation is 33.7%, with a target of 35% by 2030
   • 12 million workers are in gig work
   • Around 400 million workers are in the informal economy
   • Graduate-job mismatch is 91.75%
   • Low household literacy (about 38%, as stated) limits the access to digital systems
3. 2025-11-14: Draft Shram Shakti Niti 2025 released
   More details

   UPSC Angle: Draft Shram Shakti Niti 2025 released to modernize labour governance.

   Key Facts:

   • Draft Shram Shakti Niti 2025 released.
   • Proposes a Universal Social Security Account (USSA).
   • Integrates EPFO, ESIC, PM‑JAY, e‑SHRAM and state welfare boards.
   • Enforces the Occupational Safety and Health (OSH) Code 2020 using AI‑based risk inspections.
4. 2026-02-14: Structural Shift Towards Financial Inclusion with New Labour Codes
   More details

   UPSC Angle: New labour codes aim to strengthen financial inclusion and social security.

   Key Facts:

   • Labour codes redefine wages
   • Wages must be at least 50% of total remuneration
   • Fixed-term employees get gratuity after one year
   • labour codes
   • financial inclusion
   • social security
   • gratuity
   • social security coverage
   • 50% of total remuneration
   • PF
   • pension
5. 2026-02-14: Labour Reforms Aim to Align Growth with Social Justice
   More details

   UPSC Angle: Labour reforms aim to align growth with social justice.

   Key Facts:

   • labour reforms
   • income security
   • financial dignity
   • social justice

Genesis

Trigger

On October 9, 2025, the Ministry of Labour & Employment released the Draft National Labour & Employment Policy (Shram Shakti Niti 2025) for public consultation.

Why Now

The policy aligns with the 'Viksit Bharat @2047' vision, seeking to formalize the economy to meet high-income status targets while responding to the 2024 ILO report highlighting that 90% of Indian workers remain informally employed.

Historical Context

It builds upon the four Labour Codes passed in 2019-2020 (Wages, Industrial Relations, Social Security, and OSH) which sought to simplify 29 central labor laws but faced implementation delays.

Key Turning Points

1. [2025-10-09] Release of the first integrated National Labour & Employment Policy draft.

   Shifted the narrative from piecemeal labor law amendments to a holistic national employment strategy.

   Before: Fragmented approach to labor; After: Integrated framework aligned with Viksit Bharat 2047 goals.

2. [2025-11-12] Publication of critical gap analysis regarding funding and digital exclusion.

   Highlighted the reality check of 90% informal employment and the risk of leaving behind low-literacy workers.

   Before: High policy optimism; After: Focus on implementation challenges like the 'funding void'.

Key Actors and Institutions

Key Institutions

• Employees' Provident Fund Organisation (EPFO)
• Employees' State Insurance Corporation (ESIC)
• e-SHRAM Portal
• Ayushman Bharat (PM-JAY)
• State Welfare Boards

Key Concepts

Universal Social Security Account (USSA)

A proposed digital account that integrates multiple welfare schemes (EPFO, ESIC, PM-JAY) to ensure benefits are portable for workers moving across sectors or states.

Current Fact: It integrates EPFO, ESIC, PM-JAY, e-SHRAM, and state welfare boards into one platform (announced Nov 14, 2025).

Informal Economy

The part of an economy that is neither taxed nor monitored by any form of government, where workers typically lack contracts and social security.

Current Fact: Around 400 million workers in India are currently in the informal economy as per 2025 data.

Gig Work

A labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs, often mediated by digital platforms.

Current Fact: India has approximately 12 million workers engaged in gig work as of 2025.

Occupational Safety and Health (OSH) Code

A legal framework regulating the health and safety conditions of workers in establishments, aiming to minimize workplace hazards.

Current Fact: The 2025 policy commits to enforcing the OSH Code 2020 using AI-based risk inspections.

What Happens Next

Current Status

As of November 14, 2025, the Ministry has released detailed technical provisions for the Universal Social Security Account (USSA) and AI-based enforcement of the OSH Code.

Likely Next

Finalization of the policy after incorporating public feedback; rollout of the USSA pilot projects; and the formal notification of the 2020 Labour Code rules across states.

Wildcards

Judicial challenges regarding the definition of 'gig workers'; potential pushback from states over the centralization of welfare boards; and global economic shifts affecting the 12 million-strong gig workforce.

Why UPSC Cares

Syllabus Topics

• Welfare schemes for vulnerable sections of the population
• Issues relating to planning, mobilization of resources, growth, development and employment
• Inclusive growth and issues arising from it

Essay Angles

• The Gig Economy: Empowerment or Exploitation?
• Formalizing the Informal: The Path to Viksit Bharat 2047
• Technology as a double-edged sword in labor governance

Prelims Likely: Yes

Mains Likely: Yes

Trend Signal: rising

Exam Intelligence

Previous Year Question Connections

• Identified the OSH Code 2020 as the one incorporating the Factories Act and Plantation Labour Act. — The current arc shows the next step in the OSH Code's evolution—moving from legislation to AI-based enforcement.
• Tested characteristics of the unorganized sector (more workers than organized, lack of unions). — The Shram Shakti Niti 2025 directly addresses the structural weaknesses of the unorganized sector identified in this PYQ.

Prelims Angles

• The 7 core objectives of Shram Shakti Niti 2025 (Universal social security, OSH, Green jobs, etc.).
• Target FLFPR of 35% by 2030 mentioned in the gap analysis.
• Components integrated into the USSA: EPFO, ESIC, PM-JAY, and e-SHRAM.
• The use of AI-based risk inspections for the OSH Code 2020.

Mains Preparation

Sample Question: Examine the potential of the proposed 'Universal Social Security Account' (USSA) in addressing the vulnerabilities of India's gig and informal workforce. What are the major implementation challenges?

Answer Structure: Intro: Define USSA and context of Shram Shakti Niti 2025 → Body 1: Benefits of USSA (Portability, Integration of EPFO/ESIC, Digital tracking) → Body 2: Vulnerabilities addressed (Informal sector, Gig workers, Migrants) → Critical Analysis: Gaps (Funding, Digital divide, 11 million in modern slavery) → Way Forward: Digital literacy, robust enforcement, and sustainable funding models.

Essay Topic: Social Security for All: Not a Charity, but a Prerequisite for National Growth.

Textbook Connections

Key Takeaway

Shram Shakti Niti 2025 represents a paradigm shift from rigid labor regulation to a digital, portable, and facilitator-driven model aimed at formalizing India's 400-million-strong informal workforce.

All Events in This Story (5 items)

1. 2025-10-09 [Polity & Governance] — Draft National Labour & Employment Policy – Shram Shakti Niti 2025
   The Ministry of Labour & Employment has released the Draft National Labour & Employment Policy – Shram Shakti Niti 2025 for public consultation. Shram Shakti Niti 2025 is India's first integrated National Labour & Employment Policy, aiming to create a fair, inclusive, and future-ready world of work. It aims to build a labour ecosystem that is inclusive, equitable, and resilient, ensuring dignity, protection, and opportunity for every worker.
   More details

   UPSC Angle: Draft National Labour & Employment Policy – Shram Shakti Niti 2025 released.

   Key Facts:

   • Draft National Labour & Employment Policy – Shram Shakti Niti 2025 released by the Ministry of Labour & Employment
   • Aims to create a fair, inclusive, and future-ready world of work
   • Aligned with Viksit Bharat @2047
   • Aims to ensure dignity, protection, and opportunity for every worker
   • Seven core objectives: universal social security, occupational safety, gender and youth empowerment, future-readiness, and green jobs
2. 2025-11-12 [Polity & Governance] — Shram Shakti Niti 2025: Gaps and Challenges
   The draft Shram Shakti Niti 2025 promises a fair, inclusive, and future-ready system for labourers, linking social security, safety, skills, and digital tools. However, concerns remain about funding voids, digital exclusion of women, elderly, and low-literacy workers, and weak enforcement mechanisms to achieve "zero workplace fatalities by 2047".
   More details

   UPSC Angle: Shram Shakti Niti 2025 aims for a fair labour system.

   Key Facts:

   • 90% of workers are informally employed (2024 ILO)
   • Around 11 million people live in modern slavery in India
   • Female labour force participation is 33.7%, with a target of 35% by 2030
   • 12 million workers are in gig work
   • Around 400 million workers are in the informal economy
   • Graduate-job mismatch is 91.75%
   • Low household literacy (about 38%, as stated) limits the access to digital systems
3. 2025-11-14 [Polity & Governance] — Draft Shram Shakti Niti 2025 released
   The Ministry of Labour and Employment released the Draft Shram Shakti Niti 2025 to modernize labour governance and accelerate the government's shift toward labour facilitation. It proposes a Universal Social Security Account (USSA) that integrates EPFO, ESIC, PM‑JAY, e‑SHRAM and state welfare boards to ensure lifelong and portable worker benefits and commits to enforcing the Occupational Safety and Health (OSH) Code 2020 using AI‑based risk inspections.
   More details

   UPSC Angle: Draft Shram Shakti Niti 2025 released to modernize labour governance.

   Key Facts:

   • Draft Shram Shakti Niti 2025 released.
   • Proposes a Universal Social Security Account (USSA).
   • Integrates EPFO, ESIC, PM‑JAY, e‑SHRAM and state welfare boards.
   • Enforces the Occupational Safety and Health (OSH) Code 2020 using AI‑based risk inspections.
4. 2026-02-14 [Economy] — Structural Shift Towards Financial Inclusion with New Labour Codes
   India's new labour codes aim to strengthen financial inclusion and social security for workers by consolidating fragmented labour laws and embedding income protection and social security into employment. The reforms seek to address historic exclusions and integrate millions of workers into formal financial and welfare systems, promoting financial inclusion and redistributing economic value toward labour.
   More details

   UPSC Angle: New labour codes aim to strengthen financial inclusion and social security.

   Key Facts:

   • Labour codes redefine wages
   • Wages must be at least 50% of total remuneration
   • Fixed-term employees get gratuity after one year
   • labour codes
   • financial inclusion
   • social security
   • gratuity
   • social security coverage
   • 50% of total remuneration
   • PF
   • pension
5. 2026-02-14 [Economy] — Labour Reforms Aim to Align Growth with Social Justice
   India's labour reforms aim to align economic growth with social justice by strengthening income security and financial dignity, though their success depends on effective implementation.
   More details

   UPSC Angle: Labour reforms aim to align growth with social justice.

   Key Facts:

   • labour reforms
   • income security
   • financial dignity
   • social justice