Informal and migrant workers: social security for the unorganised

Over 90 percent of India's workforce is in the informal sector: construction workers, domestic workers, street vendors, agricultural labourers, gig workers and the hundreds of millions who migrate within the country for work. For decades, Indian social security was built for the organised minority, the factory worker with a provident fund, while the unorganised majority faced sickness, old age and unemployment with no safety net at all. The 2020 lockdown made this invisible workforce suddenly visible, when millions of migrants walked hundreds of kilometres home because the cities they built had no system to feed, house or pay them when work stopped.

This article maps the scale of informal and migrant work, the social-security gap it creates, the institutional response from e-Shram registration to portable benefits, the Code on Social Security framework, and what a credible social-security floor for the unorganised would require. (Note: welfare delivery mechanics like DBT are covered in governance-26 on this site; they appear here only where they touch unorganised workers.)

The scale of informal and migrant work

Informality is the Indian labour market, not its margin. Over 90 percent of employed Indians work in the informal sector, with low wages, irregular work, no contracts and no social protection. Women are overrepresented: over 90 percent of employed women work informally, and distress pushes many into exploitative home-based industries. The gig economy is the newest layer, reported at over 2 percent of the total workforce, bringing platform workers into the same insecurity with digital surveillance added.

Internal migration is the engine of this workforce. Agrarian distress, declining rural livelihoods, climate pressures on coastal and arid regions, and the pull of urban construction and services move tens of millions across states. Around 75 percent of migrant women are unemployed, with only 14 percent in self or wage employment and 12 percent in casual labour. Migrants lose social networks and identity, face trafficking and exploitation, and fall between state welfare systems because entitlements are domiciled where the worker no longer lives.

• Informal share: over 90 percent of the workforce in the informal sector with low wages and no security.
• Women: over 90 percent of employed women work informally; migrant women face 75 percent unemployment.
• Gig workers: reported at over 2 percent of the workforce and growing.
• Displacement: 5.4 million Indians internally displaced by disasters (IDMC 2024), a migration driver.
• Health insurance gap: nearly 40 crore Indians, mostly informal and self-employed, lack any health insurance (NITI Aayog 2021), above the PM-JAY line but unable to afford private cover.

The social-security gap

India's social security was designed around the organised worker: the Employees' Provident Fund, the Employees' State Insurance, gratuity and pensions. The unorganised worker got schemes, not rights: scattered, underfunded, and hard to access. The result is a protection floor with a hole in the middle. When a construction worker falls sick, when a domestic worker ages out of work, when a street vendor's cart is seized, the family absorbs the shock alone, often by borrowing at ruinous rates. High out-of-pocket health expenditure pushes many such families into poverty.

The missing-middle problem sharpens the point: nearly 40 crore Indians sit above the PM-JAY poverty line but cannot afford private insurance, so a single hospitalisation can wipe out years of savings. They are concentrated in the unorganised sector, agriculture and the gig economy. The policy question is whether social security should be tied to employment status at all, or whether it should be a citizenship floor that follows the worker.

e-Shram: counting the uncounted

The e-Shram portal is the national database for unorganised workers, and registration is its foundational act: over 31 crore unorganised workers were reported registered by the 2025-26 Economic Survey round. For the first time, the Indian state has a direct line of sight to the informal workforce, which is the precondition for targeting pensions, insurance and emergency relief.

The database also changes the politics of invisibility: a registered worker is a countable citizen, harder to ignore in budget allocations and disaster response. During future lockdown-type shocks, the e-Shram registry is meant to be the channel through which cash and food reach the informal workforce directly, which is why keeping it current and interoperable across states matters more than the headline registration count.

Registration, however, is only the doorway. The criticisms are that registration does not automatically enrol workers in benefits, that digital exclusion keeps the poorest out, that migrants registered in one state struggle to claim in another, and that the database is only as good as its updating. A mains answer should treat e-Shram as infrastructure, not outcome: its value lies in what is built on it.

Portability: benefits that travel with the worker

Migration breaks welfare systems designed for settled populations. The portability reforms of the last few years are the direct answer to the 2020 lockdown lesson.

• One Nation One Ration Card: portable food security covering over 80 crore beneficiaries, so migrant workers can access subsidised food anywhere in India.
• Ayushman Bharat: portable health insurance, so treatment is not tied to the home state.
• PM SVANidhi: collateral-free working capital loans to street vendors to formalise their businesses and build credit history; reported to have benefited over 63 lakh vendors with disbursements above Rs 11,000 crore.
• PM Ujjwala Yojana 2.0: LPG access extended to migrants.
• Janani Suraksha Yojana: portable maternity care for migrant mothers.
• Atal Pension Yojana: retirement savings for informal-sector workers with pension starting at 60.

The logic is converging: register the worker (e-Shram), make the entitlement portable (ration card, health insurance), and build the safety nets (pensions, credit, maternity care). What is still missing is the connective tissue: data systems that track migrants in real time, and last-mile delivery that reaches a construction worker who changes cities every season.

The insurance and pension stack: PMSBY, PMJJBY and PM-SYM

PMSBY is the Pradhan Mantri Suraksha Bima Yojana, an accident-insurance scheme of the Ministry of Finance launched in 2015. It pays Rs 2 lakh on accidental death or full disability (Rs 1 lakh for partial disability) for a premium of just Rs 20 a year, auto-debited from a bank account. Anyone aged 18 to 70 with a bank account can join. It matters because it was the first near-universal, low-premium accident cover aimed squarely at informal workers, riding on the Jan Dhan account network.

PMJJBY is the Pradhan Mantri Jeevan Jyoti Bima Yojana, a life-insurance scheme of the Ministry of Finance, also from 2015. It pays Rs 2 lakh to the nominee on the death of the subscriber from any cause, for a premium of Rs 436 a year, open to ages 18 to 50. Together with PMSBY it forms the low-premium insurance pair that gave unorganised workers their first formal safety net against death and disability.

PM-SYM is the Pradhan Mantri Shram Yogi Maan-dhan, a pension scheme of the Ministry of Labour and Employment from 2019. Unorganised workers aged 18 to 40 with monthly income up to Rs 15,000 contribute a small monthly amount (matched by the Centre) and receive Rs 3,000 a month from age 60. It matters as the first dedicated old-age pension for unorganised workers, though enrolment has lagged far behind the size of the workforce it targets.

Artisans and traditional workers: PM Vishwakarma

PM Vishwakarma is a central-sector scheme of the Ministry of Micro, Small and Medium Enterprises (2023) for artisans and craftspeople in 18 traditional trades such as carpentry, blacksmithy, pottery, sculpting, tailoring and goldsmithy. Enrolled Vishwakarmas get an ID card and certificate, skill training with a stipend, a toolkit incentive of Rs 15,000, collateral-free enterprise loans up to Rs 3 lakh in two tranches at a concessional rate, and marketing support. It is the first national scheme to formally recognise traditional-occupation workers, a large informal segment the Code-era framework otherwise overlooks. (This article is the scheme's home in this series.)

The pre-Code migrant statute: the 1979 Act

The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 was the only pre-Code statute written specifically for inter-state migrant labour. It required contractors to be licensed, and gave migrants a displacement allowance, a journey allowance and wage parity with local workers. In practice it was barely enforced: most migrants never knew it existed and contractors operated outside it. It has now been subsumed into the Code on Occupational Safety, Health and Working Conditions, 2020, which is why the e-Shram and Code framework above is its successor, not its companion.

The Code on Social Security, 2020: the legal frame

The Code on Social Security, 2020 consolidates nine central labour laws into one framework and, crucially, brings unorganised, gig and platform workers inside the legal definition of social security for the first time. It provides for a National Social Security Board for unorganised workers and envisages schemes for life and disability cover, health and maternity benefits, old-age protection and education. The policy direction it sets is to extend social-security benefits, including maternity and health insurance, to gig and informal workers.

The gap between the Code and reality is implementation. The Code's operative machinery, the boards, the funds, the notified schemes, the contribution models for platforms, is what determines whether it becomes a floor or stays a framework. Critics also note that aggregation-based welfare funds need steady financing, and that the Code's benefits for gig workers depend on platform contributions that platforms resist. For mains, the honest position is: the architecture is the most ambitious in India's history; the delivery is the test it has not yet passed.

The workplace transformation: work from home and the right to disconnect

The COVID-19 pandemic permanently changed the workplace. A CII study found that 68 percent of companies continue remote-work practices after the pandemic, and the shift reaches beyond offices into how all work is organised and monitored.

The case for remote work:

• Flexibility for workers, especially women with care responsibilities.
• Reduced commute time and cost.
• A wider talent pool for employers.
• A Stanford study finding of a 33 percent lower resignation rate for hybrid workers.
• Lower real-estate costs for companies.

The costs:

• Social isolation and loneliness.
• Blurred work-life boundaries and an always-on culture.
• Mental-health strain from constant availability.
• Reduced team collaboration.
• Inequality, since most jobs cannot be done from home.
• Long-term losses in social capital and creativity.

The right to disconnect is the right to refuse work-related communication outside working hours. France adopted the first such law in 2017; Australia, Portugal and Spain have similar protections. India has a draft Right to Disconnect Bill, 2018, introduced by Supriya Sule but never enacted; the Code on Wages, 2019 and the OSH Code, 2020 regulate working hours without naming the right.

Why this belongs in a social-justice series: the right protects gig and IT workers from endless availability, guards mental health and family time, and exposes a new divide. Work from home is a formal-sector privilege; for the informal majority this article covers, the question is not disconnection but any protection at all.

The way forward: a floor, not a favour

The sources converge on a reform sequence. First, a national policy on internal migration with a rights-based approach, so migrants are treated as citizens with portable rights rather than as floating labour. Second, data systems to track migrants and keep e-Shram current, because invisible workers get invisible policy. Third, portable entitlements across states as the default design, not the exception.

Fourth, migrant-friendly cities with affordable rental housing near work, because shelter is the precondition of every other security. Fifth, skill recognition across regions and recognition of prior learning for informal workers, so experience counts as qualification. Sixth, protection from exploitation through registration and enforcement of minimum standards. And finally, risk pooling for the missing middle through affordable standardised insurance, subsidised premiums, and SHG and cooperative-based pooling, so that the 40 crore without cover get a bridge into the system.

Skilling, inequality and the inclusive-growth test

PM-Daksh: skilling for the most vulnerable workers

PM-Daksh (Pradhan Mantri Dakshta Aur Kushalta Sampann Hitgrahi) targets Scheduled Castes, Other Backward Classes, safai karamcharis and Economically Backward Classes for skill training, and in FY 2023-24 trained more than 1.2 lakh beneficiaries. It is the skilling complement to the protection and credit schemes: where PM Vishwakarma recognises traditional artisans and e-Shram counts the unorganised, PM-Daksh tries to move the most excluded workers up the skill ladder into wage or self-employment. Informality in India is not just unregistered work; it is caste-segregated, skill-poor work, and skilling targeted at SC, OBC and sanitation workers attacks the transmission channel directly.

The inequality backdrop

Informal workers live inside an economy where growth and sharing have parted ways. The World Inequality Report finds the top 10 percent holding 57 percent of national income, with 22.6 percent going to the top 1 percent in 2022-23, among the highest concentrations in the world. The Household Consumption Expenditure Survey 2022-23 puts average monthly per capita expenditure at Rs 3,773 in rural India and Rs 6,459 in urban India, and the gender pay gap shows men earning 82 percent of labour income against 18 percent for women. When the bottom half of the workforce earns too little to save, insure or skill itself, social security has to be publicly built, because the market will not build it.

Key Terms

• a pension scheme of the Ministry of Labour and Employment from 2019: This refers to the Pradhan Mantri Shram Yogi Maandhan (PM-SYM), a pension scheme launched in 2019 by the Ministry of Labour and Employment for unorganized-sector workers. It assures a monthly pension of Rs 3,000 after age 60 against small contributory payments. For UPSC, PM-SYM is a model answer on social security for informal workers and welfare-scheme questions. PM-SYM, launched 2019
• an accident-insurance scheme of the Ministry of Finance launched in 2015: An accident-insurance scheme of the Ministry of Finance launched in 2015 is the Pradhan Mantri Suraksha Bima Yojana (PMSBY), which offers Rs 2 lakh accidental death and disability cover for a nominal annual premium, auto-debited from bank accounts. It targets unorganised workers outside formal insurance. For UPSC, it matters in GS-2 and GS-3: social-security architecture, financial inclusion, and the Jan Dhan-Aadhaar-Mobile trinity of welfare delivery. the Pradhan Mantri Jeevan Jyoti Bima Yojana, launched alongside it in May 2015
• a life-insurance scheme of the Ministry of Finance, also from 2015: This refers to the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), a government-backed life-insurance scheme launched in 2015 by the Ministry of Finance. It offers low-premium renewable term cover to bank account holders, extending social security to the uninsured. For UPSC, PMJJBY is standard prelims material on financial inclusion and government welfare schemes. PMJJBY, launched 9 May 2015
• Micro, Small and Medium Enterprises: Micro, Small and Medium Enterprises are businesses classified under the MSMED Act, 2006, with a 2020 revision using composite investment and turnover limits: micro up to Rs 1 crore investment and Rs 5 crore turnover, small up to Rs 10 crore and Rs 50 crore, medium up to Rs 50 crore and Rs 250 crore. They employ crores and anchor supply chains and exports. For UPSC they are central to employment, formalisation via Udyam registration, and recovery policy. The Emergency Credit Line Guarantee Scheme of 2020 gave collateral-free loans to stressed MSMEs during the pandemic.
• PMJJBY (Jeevan Jyoti Bima Yojana): PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana) is a government-backed life insurance scheme launched on 9 May 2015. Anyone aged 18 to 50 with a bank account gets Rs 2 lakh of life cover for death due to any reason at a premium of Rs 436 a year, auto-debited and renewable annually. It matters for UPSC as the low-cost social-security pillar alongside PMJDY and PMSBY in GS-2. Launched on 9 May 2015 in Kolkata
• Code on Social Security, 2020: The Code on Social Security, 2020 is one of India's four consolidated labour codes. It merges nine earlier laws, covering provident fund, employees' state insurance, gratuity, and maternity benefit, into a single framework, and extends social security to unorganised, gig, and platform workers through a Social Security Fund. For UPSC, it is a landmark reform: the four codes came into force on 21 November 2025, replacing 29 central labour laws. The Code's definitions of gig and platform workers gave formal legal recognition to app-based delivery and ride-hailing workers for the first time.
• One Nation One Ration Card: One Nation One Ration Card is the 2019 scheme that made National Food Security Act ration cards portable across India. Beneficiaries can draw their subsidised foodgrain entitlement at any fair price shop through Aadhaar-seeded biometric authentication, freeing migrant workers from dependence on their home-state shop. For UPSC, it is the flagship case of portable welfare and technology-enabled food security. All states and union territories have implemented the scheme, covering the full NFSA beneficiary base.
• National Social Security Board: The National Social Security Board is the advisory body constituted under the Unorganised Workers' Social Security Act, 2008 to recommend welfare schemes for unorganised workers. It frames proposals on life and disability cover, health and maternity benefits, and old-age protection for workers outside formal employment. For UPSC, it anchors discussions on extending social security beyond the organised sector, a theme revived by the Code on Social Security, 2020. Its mandate covers nearly nine-tenths of India's workforce in informal employment.
• PM-SYM (Shram Yogi Maan-dhan): PM-SYM (Pradhan Mantri Shram Yogi Maan-dhan) is a voluntary contributory pension scheme for unorganised workers launched in February 2019. Workers aged 18 to 40 earning up to Rs 15,000 a month contribute Rs 55 to Rs 200 monthly, matched equally by the government, to earn an assured Rs 3,000 monthly pension after age 60. It matters for UPSC as the flagship old-age security scheme for India's informal workforce in GS-2 and GS-3. Over 54 lakh beneficiaries enrolled as of July 2026
• Recognition of Prior Learning: Recognition of Prior Learning is the process of formally certifying skills that workers acquired informally, outside classrooms, such as on construction sites or in workshops. Under the Pradhan Mantri Kaushal Vikas Yojana it is aligned to National Skills Qualification Framework levels and linked to the National Credit Framework so certified workers can progress to further training. It matters for UPSC for formalising India's vast informal workforce. A welder with twelve years of workshop experience receiving an NSQF-aligned certificate after assessment.
• PMSBY (Suraksha Bima Yojana): PMSBY (Pradhan Mantri Suraksha Bima Yojana) is a government-backed accident insurance scheme launched on 9 May 2015. Anyone aged 18 to 70 with a bank account gets Rs 2 lakh cover for accidental death or total disability (Rs 1 lakh for partial disability) at a premium of just Rs 20 a year. It matters for UPSC as the cheapest social-security instrument for the unorganised workforce in GS-2. Over 58 crore people enrolled, as cited in the June 2026 Mann Ki Baat address
• Code on Occupational Safety: The Code on Occupational Safety, Health and Working Conditions, 2020 is one of the four labour codes, consolidating 13 central labour laws including the Factories Act and the Mines Act. It sets common standards for working hours, leave, safety committees, and welfare across factories, mines, plantations, and contract labour, replacing multiple licences with a single registration. For UPSC it represents the simplification of India's labour law architecture. It mandates safety committees and annual health check-ups in hazardous factories.

Practice questions