Govt Orders EPFO Study on Workforce Formalisation Impact

The central government has directed the Employees’ Provident Fund Organisation to examine whether shifting informal workers into formal employment leads to sustained income security, social protection and long-term job stability, as per news reports. 

3-Month Study Mandate 

As per the 29th Report of the Standing Committee on Finance tabled in Parliament, Employees' Provident Fund Organisation has been tasked with conducting the assessment through Pandit Deendayal Upadhyaya National Academy of Social Security within 3 months and submit an Action Taken Report. 

The committee has emphasised that the findings must be shared within the prescribed timeline. The study will evaluate whether workforce formalisation delivers measurable gains in income stability, benefits coverage, and employment security for informal workers. 

The direction comes amid ongoing efforts to expand EPFO enrolment and extend social security coverage through labour market reforms. 

Delay In Social Security Code Implementation 

The panel noted delays in the implementation of the Code on Social Security, 2020, and urged the Centre to engage state governments to notify the rules under the labour Codes. 

States yet to publish rules for 1 or more Codes include West Bengal, Lakshadweep, Delhi and Tamil Nadu. 

The committee also questioned whether registering platform workers on eShram and integrating it with the PM Gati Shakti National Master Plan has effectively enhanced workforce quality. 

AI Impact and Employment Strategy 

Raising concerns over the growing influence of artificial intelligence on the labour market, the panel cautioned that while AI may generate opportunities, it could also disrupt jobs. It recommended prioritising labour-intensive MSMEs under Make in India and Gati Shakti to ensure technology complements rather than replaces labour. 

A strategic push for tourism-led employment was also highlighted. In the Union Budget 2026-27, Nirmala Sitharaman announced initiatives including support for 5 regional medical hubs, a pilot to upskill 10,000 guides across 20 tourist districts and development of 15 archaeological sites. 

Additionally, the committee advocated establishing a centralised Labour Market Information System to better align job demand and supply. 

Read More: EPFO Likely to Keep FY26 Interest Rate Unchanged At 8.25%! 

Conclusion 

With a 3-month study timeline, the government aims to evaluate whether formalisation policies are delivering tangible employment and income security gains while addressing implementation gaps and emerging labour market challenges. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.