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When Registration Isn’t Relief: The Broken Promise of India’s e-Shram Portal

Eman Syed

INTRODUCTION

The majority of India’s workforce operates in the informal sector, lacking social security and fair wages. Today, it continues to be one of the most pressing challenges in India’s labour market. While policies like the e-Shram portal aim to address these issues, implementation gaps reduce their effectiveness. This article explores whether schemes like e-Shram offer genuine relief or are just technocratic fixes and initiates for a deeper rethinking of labour protections and financial inclusion.

UNDERSTANDING INFORMALITY

The First Indian National Commission on Labour (1966–69) defined the ‘unorganised sector workforce’ as – “those workers who have not been able to organize themselves in pursuit of their common interest due to certain constraints like the casual nature of employment, ignorance and illiteracy, small and scattered size of establishments” – as cited in WageIndicator Foundation, 2006.

Informal workers consist of persons working in unorganised, or informal, sector enterprises or households, excluding regular workers with social security benefits provided by their employer and the workers in the formal sector without any employment and social security benefits such as income taxation, paid leave, health insurance, or pension schemes provided by their employer.

A few examples of informal workers include: agriculture (e.g., landless labourers), industry (e.g., brick-kiln workers), and services (e.g., street vendors, domestic workers), among others.

STRUCTURAL CHALLENGES IN INDIA’S LABOUR MARKET

India’s labour market is mostly informal, with 90% of workers lacking formal job benefits. Informal workers face numerous challenges such as low pay, unsafe jobs, lack of social security, limited legal protection, limited access to finance and skill development, informalisation of formal jobs, lack of representation, and productivity and income disparities.

The market is also characterized by deep segmentation on the basis of gender, caste, region, and skill. According to the ILO, the female labour force participation rate stood at only 25% in 2022, which was the lowest globally. Though the pandemic prompted a slight increase through subsistence work, structural inequality remains the same. However, these gender disparities are not accidental but reflect deeper structural design flaws. From a Feminist Welfare Theory perspective, these disparities reflect how informal women workers are often excluded from welfare benefits due to systems that continue to privilege male breadwinner models.

THE EXPECTATIONS AND REALITIES OF THE E-SHRAM PORTAL

To solve the issues faced by informal workers, the Ministry of Labour and Employment launched the e-Shram portal in 2021 for creating a National Database of Unorganised Workers (NDUW), which is seeded with Aadhaar. The portal is said to include details of occupation, address, occupation type, educational qualification of workers, skill types, etc., for optimum realization of their employability and to extend the benefits of the social security schemes to them.

The portal includes two categories of schemes: Social Security Welfare Schemes and Employment Schemes. However, the effectiveness of these schemes remains unequal, as many informal workers face difficulties such as limited awareness, digital access, bureaucratic delays, and a mismatch between skills offered and actual market demand.

As of December 19, 2024, the e-Shram portal had registered over 30.48 crore unorganised workers, marking it as the world’s largest database of informal labour. A total of ₹704.01 crore was allocated for the creation and management of the National Database of Unorganised Workers (NDUW) for the period FY 2019–20 to FY 2024–25.

Uttar Pradesh, Bihar, and West Bengal recorded the highest registrations, reflecting both outreach and demographic concentration. However, they also highlight the challenge of ensuring tangible access to benefits.

These workers, especially women, migrants, and those in remote areas, face major problems in accessing the e-Shram portal due to digital illiteracy, lack of devices, and identity verification issues. Even when registered, many fail to receive the benefits. These challenges are not just a result of poor awareness but systemic neglect, weak frontline support, and a bureaucratic mindset that views informal workers as undeserving, reinforcing class discrimination.

According to Institutional Theory, the lack of inter-ministerial coordination and absence of accountability among officials suggests weak institutions and institutionalisation. Public Choice Theory presents how bureaucrats and political actors often prioritize visible outputs like registration numbers over actual benefit delivery, which is harder to measure and less politically rewarding. As a result, policies focus on short-term benefits rather than long-term transformation.

Along with this, there has been frequent introduction of new schemes from different ministries without strengthening existing delivery systems, which has resulted in policy fragmentation, confusion, and overlapping. Informal workers face class-based discrimination and rejection over minor errors when they are required to physically visit banks or offices to confirm transactions or follow up. For daily wage workers, each such visit means losing a day’s income, creating a high opportunity cost. These barriers result in many stopping their part of the process, resulting in limited participation.

WHY DO SYSTEMIC FAILURES EXIST?

The consistent delay in implementing labour codes, particularly the Social Security Code 2020, and weak recognition of platform workers raises questions about regulatory inaction. Elite Theory explains this neglect of formalising labour that would raise costs for businesses, so political and corporate interests favour temporary schemes over meaningful reform.

From a Marxist lens, welfare schemes are a way to silence dissent and preserve the status quo without challenging structural inequalities. By offering minimal support through schemes like e-Shram, the authorities avoid deeper labour reforms that would challenge the economic privileges of businesses. Thus, this results in informality being institutionalised. 

Altogether, these gaps highlight the urgent need for improved coordination among states, more effective communication, and an inclusive, adequately funded system that turns registration into tangible support for India’s informal workers.

GLOBAL LESSONS FOR SYSTEMIC REFORM

Below are given a few examples of how governments have achieved success in protection of informal labour force:

  • Brazil’s Bolsa Família has been successful in linking conditional cash transfers to health and education services availed by informal workers.
  • Thailand has achieved near-universal coverage (≈98%) and significantly reduced out-of-pocket health spending and infant mortality. through tax-financed solidarity.
  • Argentina’s Monotributo simplified formalisation for micro-entrepreneurs by integrating tax and social security contributions in a unified system.

Taking on these developments, India can:

  • Merge all benefits under a unified e-Shram+ portal with automatic Aadhaar-based enrolment so that access to these are made easier.
  • Levy gig/platform taxes to fund social security that can help the workers in future.
  • Create a one-stop benefit system similar to Argentina’s Monotributo.

BRIDGING GAPS

  • One of the root causes of the challenges faced by informal workers lies in the lack of official documentation, which restricts their access to welfare schemes and financial services. To address this first, the government can initiate nationwide special drives for Aadhaar and bank account registration through door-to-door campaigns or community-based camps helping workers to register everything at once. 
  • Puducherry’s successful model required workers to present basic documents at a central registration point offers a practical example. Documentation requirements must be made flexible, with the acceptance of alternative IDs for initial registration, especially for migrant workers and those facing documentation errors.
  • Secondly, the e-Shram portal should be upgraded into a universal, integrated system that can offer automatic enrolment into eligible schemes, ensuring portability of benefits across states for migrant workers, and links workers to skill training and employment opportunities. 
  • Moreover, direct financial inclusion can be supported by promoting zero-balance, easy-to-open bank accounts,and provision of subsidised credit and microloans.
  • Additionally, expanding the scope of e-Shram to include health insurance, maternity benefits, accident insurance, pensions, and unemployment support will further secure the lives of informal workers. Along with this, a set up of strong legal aid and grievance redressal system is necessary.
  • Finally, all these efforts should be supported by widespread awareness campaigns through local language media, community radio, and grassroots networks. Involving employers and trade unions can ensure compliance at the ground level. It is equally essential to track not just registrations, but also the actual delivery of benefits and outcomes to identify gaps and improve implementation in real time.

CONCLUSION

India’s informal workers still lack real protection. Fragmented implementation, weak coordination, political neglect, and poor follow-up reduce the impact of initiatives like e-shram. Instead of fixing core problems like weak labour law enforcement, poor job creation, and growing informal work in formal sectors, the government often launches new welfare schemes that offer short-term cash or benefits. These may help temporarily, but continue to hide deeper issues. Political leaders focus on schemes that are easy to show and promote, rather than long-term reforms that would truly protect workers and hold powerful interests accountable. Thus, unless grassroots mobilisation and structural reforms accompany digital initiatives like e-Shram, India risks worsening the very inequalities it seeks to resolve. 

BIBLIOGRAPHY 

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