New Labour Codes Expected to Create 7.7 Million Jobs, Inject ₹75,000 Crore into Consumption: SBI Research

India’s four new labour codes were brought into effect on November 21, 2025. SBI Research, in its latest report, estimates that the changes may create about 77 lakh jobs over the medium term. The report also expects household spending to rise by nearly ₹75,000 crore because more workers would be added to formal payrolls with recorded wages. 

More Workers Moving Into Formal Jobs 

India’s formal workforce is currently estimated at 60.4%, according to the Periodic Labour Force Survey. SBI projects that the new rules could push this figure to about 75.5%, a rise of at least 15%. 

India has nearly 440 million workers in the unorganised sector. More than 310 million of them are registered on the e-Shram portal. If only one-fifth of these individuals shift to formal jobs, close to 10 crore workers would begin receiving benefits that are documented and linked to their employment records. 

Social Security Access to Expand 

The codes extend social security to all workers, including those in gig and platform jobs. SBI estimates that coverage could increase to 80-85% in the next two to three years. Data from the International Labour Organisation shows that India’s social security coverage was just 19% in 2015 and has risen to 64.3% in 2025. 

Changes in Wages and Work Conditions 

The codes make appointment letters compulsory for every worker and set a right to minimum wages across sectors. Workers aged above 40 must receive a free annual medical check-up. Under the wage rule, basic salary must be at least half of total pay. SBI notes that this may lead to lower take-home pay for some workers, since retirement contributions will increase as basic pay rises. 

Impact on Employment and Companies 

SBI expects India’s unemployment rate to potentially decline by up to 1.3% over the medium term, depending on how states frame their rules and how firms adjust to them. While companies may face higher costs, the consolidation of 29 older labour laws into four codes is expected to reduce repeated paperwork. 

Read More:  Will Your Take-Home Salary Drop After the 4 New Labour Codes? Explained! 

Conclusion 

The new labour codes are set to change how jobs are recorded, how wages are structured and how workers receive benefits, which may gradually influence employment trends and spending across the country. 

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