Labour Codes Set to Raise Women’s Workforce Participation to 33.7%: Economic Survey

The Economic Survey 2025–26 has emphasized that the new Labour Codes are poised to enhance women’s participation in the workforce, narrow gender wage gaps, and accelerate the formalisation of the labour market. By easing restrictions and simplifying compliance, the codes aim to create a more inclusive and structured employment environment across sectors.

States with fewer restrictions on women’s labour have already demonstrated higher female workforce participation, increased representation in management roles, and smaller wage disparities. The new Labour Codes facilitate women’s employment in all establishments, including night shifts, with adequate safety measures in place, promoting a more equitable workplace.

Key provisions of the codes include equal wages, expanded maternity benefits, work-from-home flexibility, and crèche facilities. According to the Indian Staffing Federation, these measures, including consensual night work, could raise the female labour force participation rate (FLFPR) to 33.7 per cent, reinforcing women’s critical role in driving economic growth.

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The survey also underscores the formalisation potential of the new codes. Recognising fixed-term and contract workers, mandating appointment letters, and introducing a single pan-India registration/licence are expected to reduce compliance burdens, benefit MSMEs, and promote direct hiring over contractual arrangements. Studies suggest these reforms could increase labour market formalisation from 60.4 per cent to 75.5 per cent.

In addition, the survey calls for targeted policy interventions to expand women’s access to STEM jobs, remove mobility-related barriers, and establish women-centric industrial clusters. Addressing skilling gaps through outcome-driven training, aligning vocational programs with industry requirements, and possibly upgrading ITI diplomas to bachelor-level degrees are suggested to enhance employment prospects.

Finally, the Economic Survey advocates for a unified information system integrating data from e-Shram, the National Career Service, and the Skill India Digital Hub. This approach aims to strengthen institutional convergence, ensure coherent skilling and employment initiatives, and equip India’s workforce for the demands of a rapidly evolving economy.

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