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Labour, Skill Development and Employment



THE Ministry of Labour and Employment is one of the important and oldest ministries of the Government of India. The Ministry aims to create a healthy work environment for higher production and productivity and to develop and coordinate vocational skill training and employment services. To keep itself in tandem with the process of liberalisation, the Ministry’s attention is focussed on the promotion of the welfare of labour and providing social security to the labour force both in organised and unorganized sectors. These objectives are sought to be achieved through the implementation of various labour laws, which regulate the terms and conditions of service and employment of workers. Labour being the subject in the Concurrent List under the Constitution of India the state governments are also empowered to enact legislation.

New Initiatives

Shram Yogi Maan-Dhan Yojana

  • Enrollment under the scheme has started since February 2019.
  • The unorganised workers, whose monthly income is ? 15,000/ per month or less are eligible to enrol under PY-SYM subject to these conditions:
    • These should belong to the entry age group of 18-40 years
    • Should not be covered under the New Pension Scheme (NPS), Employees’ State Insurance Corporation (ESIC) scheme or Employees’ Provident Fund Organisation (EPFO)
    • Should not be an income tax payee
  • PM-SYM is a voluntary and contributory pension scheme on a 50:50 basis, where prescribed age-specific contribution shall be made by the beneficiary and the matching contribution by the central government as per the scheme guidelines.
  • A subscriber would receive the following benefits:
    • Minimum Assured Pension: Each subscriber shall receive minimum assured pension of ? 3,000/- per month after attaining the age of 60 years
    • Family Pension: During the receipt of a pension, if the subscriber dies, the spouse of the beneficiary shall be entitled to receive 50 per cent of the pension. Family pension is applicable only to spouse
    • If a beneficiary died due to any cause (before age of 60 years), his/her spouse will be entitled to continue the scheme subsequently by payment of regular contribution or exit the scheme.
  • The subscriber’s contributions to PM-SYM is through ‘auto-debit’ facility from his/ her savings bank account/Jan- Dhan account and it ranges from ? 55 /to ? 200/- per month depending at the entry age of the subscriber.
  • The subscriber is required to contribute the prescribed contribution amount from the age of joining PM-SYM till the age of 60 years.
  • The Scheme is being implemented through LIC and Common Services Centres-SPV.
  • Under the scheme, the contribution amount for the first month is being paid in cash.

National Career Service Project

  • The Ministry is implementing the National Career Service (NCS) Project as a Mission Mode Project for the transformation of the National Employment Service to provide a variety of employment-related services like career counselling, vocational guidance, information on skill development courses, apprenticeship, internships etc.
  • The NCS Project has also been enhanced to interlink all employment exchanges with the NCS Portal so that services can be delivered online.

Pradhan Mantri Rojgar Protsahan Yojana

  • Objective: Promoting employment generation with an allocation of ? 1,000 crores.
  • Government of India will pay the Employees Pension Scheme (EPS) contribution of 8.33 per cent for all new employees enrolling in Employees’ Provident Fund Organisation (EPFO) for the first three years of their employment.
  • The scheme will be applicable to those having earnings of ? 15,000/- per month.
  • A budget provision of ? 1,000/- crore for this scheme has been made.

Shram Suvidha Portal

  • Objective: To bring transparency and accountability in the enforcement of labour laws and ease compliance.
  • It caters to four major organisations under the Ministry:
    • Office of Chief Labour Commissioner (Central)
    • Directorate General of Mines Safety
    • Employees’ Provident Fund Organisation
    • Employees’ State Insurance Corporation.

Single Unified Annual Return

  • Ministry of Labour and Employment has started Single Unified Annual Return for eight Labour Acts.
  • This facilitates filling of simplified Single Online Return by the establishments instead of filing separate Returns, under these Acts.

Labour Codes

  • These initiatives include governance reforms through use of technology and also legislative reforms by simplifying, rationalising and amalgamating the existing labour laws into four labour codes.

Legislative Initiatives


Draft Small Factory Bill


  • The Bill provides for the regulation of working and service conditions of workers in small manufacturing units employing less than 40 workers.
  • The Bill amalgamates, simplifies and rationalizes the provisions of six Labour Laws at one place for these small factories

Social Security

Employees’ State Insurance Corporation

  • To provide medical care and cash benefits in case of sickness, maternity and employment injuries, the Employees’ State Insurance Act was enacted in 1948.
  • Employees’ State Insurance Corporation (ESIC) is implementing the ESI Scheme introduced since 1952.

Digital India e-initiatives of ESIC

e-biz Platform

  • ESIC was the first organization of Central government, to integrate its services (Registration of Employers through the e-biz portal of Department of Industrial Policy and Promotion DIPP) to promote ease of business and curb transaction costs.


  • A process of establishing the identity of the insured person through Adhaar number has been set up by seeding Adhaar number to the insurance number.
  • This has simplified the identification process of the insured person and his/her dependents at various point of contact during all type of benefit disbursement.

Employees’ Provident Fund Organisation

  • The Employees’ Provident Funds (EPF) and Miscellaneous Provisions Act, 1952 provides for Provident Fund, Pension Scheme and Insurance Fund in factories/establishments employing twenty or more employees in industries mentioned in Schedule-I to the Act.
  • The following three schemes framed are:
    • Employees’ Provident Funds Scheme, 1952
    • Employees’ Pension Scheme, 1995
    • Employees’ Deposit-Linked Insurance Scheme, 1976

Universal Account Number:

  • The facility of Universal Account Number (UAN) for EPF subscribers was formally launched in 2014.
  • It provides automatic portability of Provident Fund account on change of employment if the employee has activated his UAN by seeding his Know Your Customer details (through the employer).

Pension Reforms

Minimum Pension

  • After the implementation of the minimum pension notification, the pension for all member/widow(er)/disabled/nominee/dependent parent pensioners whose original pension were less than ? 1,000/- p.m. have been fixed at the minimum of ? 1,000/- p.m.

Industrial Relations

  • Twenty-two Central Government Industrial Tribunal (CGIT) -cum-Labour Courts have been set up under the provisions of the Industrial Disputes Act, 1947 for adjudication of industrial disputes in organizations for which the Central Government is the appropriate authority.
  • Through Finance Act, 2017, the powers to settle the Appeals arising out of EPF&MP Act,1952 have also been entrusted upon to these Tribunals.

Child Labour

Policy on Child Labour

  • The National Policy on Child Labour announced in August, 1987.
  • The Action Plan is multi-pronged and mainly consists of:
    • A legislative action plan
    • Project-based action in areas of high concentration of child labour
    • Focus on general development programmes for the benefit of the families of such labour.

Legislative Action Plan

  • The Child Labour (Prohibition & Regulation) Act, was enacted in 1986.
  • As per the provisions of the Act, the employment of children below the age of 14 years was prohibited in 18 occupations and 65 processes.
  • Then the Government followed it up with the Child Labour (Prohibition & Regulation) Amendment Act, 2016, which came into force from 2016.
    • A complete prohibition on employment or work of children below 14 years of age in all occupations and processes
    • Linking the age of the prohibition of employment with the age for free and compulsory education under Right to Education Act, 2009
    • Prohibition on the employment of adolescents (14 to 18 years of age) in hazardous occupations and processes
  • In pursuance of the National Child Labour Policy, the National Child Labour Project (NCLP) Scheme was started in 1988 to rehabilitate children rescued from child labour.
  • It is an ongoing Central Sector Scheme.
  • Working children are identified through child labour survey, withdrawn from work and put into the special training centres so as to provide them with an environment to subsequently join the mainstream education system.

Re-alignment of NCLP Scheme with RTE Act

  • With the enactment of Right to Education (RTE) Act, 2009, there was a need for realignment of the NCLP Scheme with the provisions of RTE Act, 2009.
  • The name of “the Child Labour (Prohibition & Regulation) Act, 1986” mentioned at Sl. No. 13 of the list of Central Act provided in Chapter 1 has been replaced with “the Child and Adolescent Labour (Prohibition & Regulation) Act, 1986” from 2016.

Bonded Labour

Rehabilitation of Bonded Labour

  • A Centrally Sponsored Plan Scheme for the rehabilitation of bonded labour was launched in 1978.
  • State governments are provided Central assistance on matching grants (50:50) basis for the rehabilitation of bonded labour.
  • Modified in 2000 to provide for 100 per cent assistance for conducting district wise surveys for identification of bonded labour,
  • Rehabilitation grant has also been raised from ? 10,000/- per identified bonded labour, to ? 20,000/- per identified bonded labour.


Wages and Bonus

The Minimum Wages Act, 1948

  • The Minimum Wages Act, 1948 was enacted to safeguard the interests of the workers mostly in the unorganised sector.
  • Under the provision of the Act, both the Central and state governments are the appropriate governments to fix, revise, review and enforce the payment of minimum wages to workers in respect of scheduled employments under their respective jurisdictions.
  • There are 45 scheduled employments in the Central and as many as 1697 in the state sphere.
  • In order to protect the minimum wages against inflation, the Central Government has introduced the Variable Dearness Allowance (VDA) linked to the Consumer Price Index.
  • As regards states, UT administrations, 27 of them have made VDA as a component of minimum wages.
  • In order to have a uniform wage structure and to reduce the disparity in minimum wages across the country, a concept of National Floor Level Minimum Wage (NFLMW) was mooted on the basis of the recommendations of the National Commission on Rural Labour (NCRL) in 1991.
  • The Central Government has revised the NFLMW from ? 137/- to ? 160/- per day from 2015.
  • It, however, needs to be noted that the National Floor Level Minimum Wage, is a non-statutory measure.

Payment of Wages

  • The Payment of Wages Act, 1936 ensures timely payment of wages.
  • In exercise of the powers conferred by sub-section (6) of Section 1 of the Act, the Central Government, has enhanced the wage ceiling from ? 10,000/- to ? 18,000/- per month from 2012.
  • Payment of Wages (Amendment) Act, 2017:  Section 6 of the Payment of Wages Act, 1936 was amended in 2017 to enable making payment of wages in cash or by cheque or by credit in the bank account of the employee.

Payment of Bonus

  • The Payment of Bonus Act, 1965 has been amended to revise the statutory eligibility limit under Section 2 (13) from ? 10,000/- to ? 21,000/- per month.
  • The changes in the Payment of Bonus Act, 1965 are effective retrospectively from 2014.

Occupational Safety and Health

  • The provisions on Occupational Safety and Health (OSH) of workers as provided for in the Constitution of India are being implemented through the offices of Directorate General of Mines Safety (DGMS) and the Directorate General of Factory Advice Service and Labour Institutes (DGFASLI).
  • The DGMS enforces the safety and health provisions for the workers in the mining industry through its Inspectors appointed under the Mines Act, 1952.

Research and Training

National Board for Workers’ Education and Development

  • The Dattopant Thengadi National Board for Workers’ Education and Development was established in 1958 to implement the Workers’ Education Programmes at national, regional and unit/village level.
  • The Board undertakes training programmes, which cover workers from organized, unorganized, rural and informal sectors.
  • The main objective of the Board’s training programmes is to create awareness among all sections of the working population.

Skill Development

  • As opposed to developed countries, where the percentage of skilled workforce is between 60 and 90 per cent of the total workforce, India records an abysmal 4.69 per cent of workforce with formal vocational skills.
  • Currently, over 40 Skill Development Programmes (SDPs) are being implemented by over 18 Ministries/Departments of the Government of India.
  • However, there are gaps in the capacity and quality of training infrastructure as well as outputs, lack of certification and common standards and a pointed lack of focus on the unorganized sector.
  • A separate ministry was created in 2014- Ministry of Skill Development and Entrepreneurship.
  • It is aided in these initiatives by its function arms - National Skill Development Agency (NSDA).
  • National Skill Development Corporation (NSDC), National Skill Development Fund (NSDF) and 33 Sector Skill Councils (SSCs) as well as 187 training partners registered with NSDC.

National Skill Development Mission

  • It was launched in 2015 on the occasion of World Youth Skills Day.
  • It is expected to converge, coordinate, implement and monitor skilling activities on pan-India basis.
  • It consists of a three tier institutional structure, where the cascading functions of the bodies consist of:
    • Providing policy directives and guidance
    • Reviewing and monitoring overall progress
    • The actual implementation in line with Mission objectives

National Policy on Skill Development and Entrepreneurship

  • The first National Policy on Skill Development (NPSD) was notified in 2009.
  • The NPSD 2009 laid out the broad framework as well as objectives and outcomes for the skilling landscape in the country.
  • Moreover, the 2009 policy itself provided for review every five years to align the policy framework with the emerging trends in the national and international milieu.
  • Accordingly the new National Policy on Skill Development and Entrepreneurship was notified 2015 which replaces the policy of 2009.
  • The policy aims to align supply with demand, bridge existing skill gaps, promote industry engagement, operationalise a quality assurance framework, leverage technology and promote apprenticeship to tackle the identified issues.
  • It also aims to promote equitable skilling opportunities for socially/ geographically marginalised and disadvantaged groups as well as women.

Schemes and Initiatives

Pradhan Mantri Kaushal Vikas Yojana (PMKVY)

  • PMKVY is the flagship outcome-based skill training scheme of this Ministry.
  • The objective of this skill certification and reward scheme is to enable and mobilize a large number of youth to take up outcome-based skill training to become employable and earn their livelihood.
  • The scheme was launched in 2015.
  • The PMKVY is being implemented by the Centre along with the states.

Pradhan Mantri Kaushal Kendras (PMKK)

  • This Ministry through National Skill Development Corporation (NSDC), implements Pradhan Mantri Kaushal Kendra (PMKK) Scheme for setting up of model skill centre in every district of the country while ensuring coverage of all the parliamentary constituencies.

Schemes for Entrepreneurship

Pradhan Mantri Yuva Yojana

  • This Scheme aims at creating an enabling eco-system for entrepreneurship promotion among youth through entrepreneurship education and training, advocacy, easy access to entrepreneurship support network and promotion of social entrepreneurship.
  • The Scheme is being implemented in partnership with both public and private stakeholders.


  • The Special Industry Initiative (SII) for Jammu and Kashmir is funded by the Ministry of Home Affairs and implemented by National Skill Development Corporation.
  • The programme is a part of the overall initiative for addressing economic issues in the state and is focused on providing skills and job opportunities to the youth.


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