The report says that with a saving rate of approximately 30 per cent, the implementation will result in a consumption boost around Rs 66 per person per day
Emphasising that the implementation of new labour codes will empower both workers and enterprises, State Bank of India (SBI) has stated that this could lead to an approximate consumption boost of Rs 75,000 crore over the medium term.
In its report, SBI highlighted that according to the periodic labour force survey (PLFS) dataset, the share of formal workers in India is estimated to be 60.4 per cent. SBI estimates a 15.1 per cent increase in the formalisation rate post the implementation of four labour codes pushing labour market formalization to 75.5 per cent.
“India’s new Labour Codes after a short transition phase could reduce unemployment by upto 1.3 per cent over the medium term, depending on reform implementation, firm-level adjustment costs, and complementary state-level rules,” SBI noted.
The report further explained that this would imply additional employment generation of 77 lakh people based on the current labour force participation rate at 60.1 per cent and average working age population at 70.7 per cent across the rural and urban workforce.
As far as the consumption is concerned, the report added that with a saving rate of approximately 30 per cent, the implementation will result in a consumption boost of around Rs 66 per person per day post implementation. SBI explained that the new labour codes will help in building a workforce that is protected, productive and aligned with the evolving world of work, paving the way for a more resilient, competitive and self-reliant nation.
