New Labour Codes To Add 77 Lakh New Jobs, Boost Consumption By Rs 75,000 Crore: SBI Research

The implementation of the new labour codes is expected to boost employment by 77 lakh and consumption by Rs 75,000 crore over the medium term, SBI Research said in its 'Ecowrap' report published on Tuesday.

The central government implemented four new labour codes on Nov. 21, 2025, enacted by the Parliament in 2019-2020.

The key changes these codes bring in can be boiled down to: Mandatory appointment letters for all workers, universal social security (with gig and platform workers included), statutory right to minimum wage for all, as well as free annual health checkups for employees aged above 40.

The codes are expected to increase the share of formalisation in the labour force by a minimum of 15%.

"According to the Periodic Labour Force Survey dataset, the share of formal workers in India is estimated to be 60.4% . We estimate a 15.1% increase in the formalization rate post the implementation of four labour codes pushing labour market formalization to 75.5%," SBI Research said in its document.

The social security coverage is also expected to be up by 85% in the next to three years. According to the International Labour Organisation, India’s social-security coverage went up to 64.3% in 2025 from 19% of the workforce in 2015.

India’s new Labour Codes, after a short transition phase, could reduce unemployment by up to 1.3% over the medium term, depending on reforms' implementation, firm-level adjustment costs, and complementary state-level rules.

SBI Research stated that it does anticipate the salary in hand to reduce due to the increase in retirement benefits.

"However, the take home salary may reduce as the retirement benefits will increase, along with wage code mandated that basic salary will be at least 50% of cost to company," the document said.