Workers in Rajasthan and Punjab are set to benefit significantly from the Centre’s push toward labour formalisation, as both states continue to report some of the highest levels of informality among regular wage earners, according to the Periodic Labour Force Survey (PLFS) 2023–24.
The data shows that more than three-fourths of regular non-agricultural employees in both states worked without a written job contract, far above the national average of 58 percent. Punjab recorded the highest incidence nationwide, with 84.5 percent of regular wage employees lacking a formal appointment letter, followed by Rajasthan at 77.1 percent.
The gap is even wider in rural areas. In rural Punjab, 84.8 percent of regular wage workers had no written contract, while rural Rajasthan reported 81.8 percent, compared with the national rural average of 61.1 percent. The absence of formal contracts typically mirrors deeper weaknesses in job security, grievance redressal, and enforceable workplace protections.
Social-security access also weak
These states also fare poorly on access to social-security benefits. In Punjab, 71.3 percent of regular workers were not eligible for provident fund, pension, gratuity, or health and maternity cover. Rajasthan reported a similarly high 64.1 percent non-eligibility rate, compared with the all-India figure of 53.4 percent.
Women workers face an even higher burden of informality. In Punjab, 86 percent of employed women lacked formal contracts, while in Gujarat the share stood at 75.1 percent, making them among the worst-performing states for female formalisation.
A clear North–Northeast divide
Regional patterns reveal sharp contrasts. Northern states, including Punjab, Rajasthan, Haryana, and Uttar Pradesh, record the highest informality among regular wage earners: on average, over 64 percent lacked written job contracts and nearly 59 percent had no access to social security.
Southern states performed better, with only about half of regular workers missing written contracts. The Northeast, however, emerged as the most formalised region, with just one in four regular workers lacking contracts.
With the new labour codes mandating appointment letters, expanding paid leave, and widening social-security coverage, Punjab and Rajasthan are poised to see some of the most significant gains once the framework is fully implemented.
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