Narrow formalisation: Informal workers,social protection and digital registration in India

Abstract

Over the last decade, there has been growing global pressure to build digitised social protection systems as a means of enhancing access to welfare. This article explores one such case: ‘e-Shram’, a digital registration platform introduced in India in the aftermath of the COVID-19 pandemic. Emerging as a direct consequence of the hardships faced by informal workers during the pandemic, the article examines e-Shram in this context. It observes that while e-Shram is increasingly portrayed as the first step towards a comprehensive formalisation programme, it fails to address the main gaps and issues highlighted by the pandemic; it provides some registration but maintains substantial deficiencies in service provision. This case study underscores why formalisation should be understood as a multidimensional process, and consequently, why it is important to separate it from particular instances of ‘narrow formalisation’ – commonly formalisations of governance, but not necessarily of work. This analysis carries broader implications for countries pursuing formalisation through digital platforms, emphasising the need for policies that align state objectives with genuine improvements in social and economic protections for informal workers.

Introduction

Historically, informal economies have grown during times of crises. And yet, the State Bank of India (SBI, 2021) reported that in the aftermath of the COVID-19 pandemic, the number of formally registered workers in India grew by 17% – drastically shrinking its informal economy. Such statements were related to the Indian government having launched e-Shram in 2021, as a direct result of the hardship that many workers had experienced during the pandemic, and with the goal of registering informal workers to improve their access to social protection benefits and formalise employment. This reflects a broader post-pandemic trend of policy interventions that aim to connect informal workers to state systems – notably often through digital infrastructure. These interventions have often been a part of wider efforts to register informal workers with different types of state registers and institutions, as seen with Auxílio Emergencial in Brazil, Rapid Response Register in Nigeria, SRD Grant in South Africa and Ingreso Familiar de Emergencia in Argentina.

Do these efforts really represent a rapid burst of formalisation? Or, put differently, if India has really seen a substantial growth of formalisation as suggested in the policy discourse (Citigroup, 2024; Patnaik and Pandey, 2021; Rajora, 2024; SBI, 2021), how can this be reconciled with evidence of the ongoing precarity of the informal workforce (Action Aid, 2020, 2021) and of continued limited access to social protection, even for those now registered with e-Shram (Bhan, 2024; Chauhan, 2024; Deshingkar, 2022; Naik, 2024; PRIA, 2021; Sriram, 2024; Zoya, 2022)? Both the challenges of informal workers during the pandemic and the nature of subsequent formalisation programmes suggest a need to question the assumptions underpinning these interventions, and in particular their impact on how formalisation is conceptualised and operationalized. What is the link between digital registration with the state and access to social protection? Is there a risk of registration becoming the end goal, rather than a means to the end of social protection provision?

Using India as a case study presents a compelling opportunity to examine informal workers’ crisis experiences and formalisation pathways, given that informal workers account for about 90% of India’s active workforce (International Labour Office [ILO], 2024). However, this statistic itself reveals the conceptual complexity underlying any analysis of formalisation efforts. India’s approach to defining informality emerges from what scholars term a “residual approach”, which measures informality not through multi-dimensional characteristics but as everything that lies outside the formal sector (Bordoloi et al., 2020; National Commission for Enterprises in the Unorganised Sector [NCEUS], 2007). This residual framing creates important analytical tensions. The NCEUS distinguishes between the “unorganised sector, meaning unincorporated private enterprises with fewer than ten workers; “informal workers”, including those in unorganised enterprises without social security benefits; and workers in the formal sector lacking employment benefits or employer-provided social security (Bordoloi et al., 2020; NCEUS, 2007). This distinction is crucial as it reveals how informality cuts across sectoral boundaries, encompassing not only traditional unorganised enterprises but also casualised employment within formally organised firms. While the proportion of workers in the organised sector has increased over the past decade (National Economic Survey, 2022), this shift has paradoxically coincided with greater casualisation and informalization of employment within the formal sector itself (Das, 2022; Kannan, 2017; Srija and Shrike, 2014). This trend complicates any straightforward narrative of formalisation progress and raises critical questions about what state registration and social protection initiatives like e-Shram can realistically achieve when informality is increasingly embedded across economic structures.

Against this backdrop of definitional complexity and evolving informality patterns, we explore informal workers’ pandemic experiences in India and examine how crisis moments may represent critical junctures for new formalisation approaches. While considerable research has been undertaken on the ways in which informal workers suffered during the pandemic, there is an absence of scholarship that examines state attempts to shape new connections with informal workers through policies on registration and social protection – and, importantly, how these dynamics recreate and reinforce long-standing formalisation scripts. After reviewing the disconnections that characterised informal workers’ experiences during the pandemic, our analysis explores the evolving discourse around e-Shram, which has shifted from being primarily about registration to positioning itself as a comprehensive one-stop solution for informal workers, and consequently a more encompassing formalisation intervention. The case of e-Shram is set against the backdrop of a growing push towards similar measures discussed within the G20 and BRICS.

The arguments that we develop in this article are based primarily on documentary review and secondary source analysis. It draws on publicly available data, including policy documents, government portals, parliamentary debates, court filings and media coverage, as well as an extensive review of academic and grey literature on social protection, informality and digital governance. Using this material, this article develops a conceptual and policy critique grounded in existing empirical evidence and theoretical insights from the literature. The goal is not to test the effectiveness of the digital portal, but to interrogate how formalisation is conceptualised and operationalised through digital platforms.

We show that while the starkness of social protection exclusion during the pandemic led to increasing pressures for increased legibility of the informal sector, the resulting e-Shram platform reflects an attempt at the formalisation of governance, rather than the formalisation of informal workers – as state rhetoric increasingly implied over time. The Indian government’s approach risks conflating digital registration with meaningful, comprehensive labour formalisation. ¹ We thus argue that what has emerged in India so far is a form of ‘narrow formalisation’ – a process that prioritises governance legibility over economic transformation and effectively formalises governance rather than work. This means that while new intersections between informal workers and the state have been created in the form of a digital registry, this has not yet closed the most meaningful forms of disconnection between informal workers and formal state and economic institutions, especially for the most vulnerable groups, including informal migrant workers.

This analysis adds nuance to debates on digitalisation in global social policy (Faith et al., 2024; Hynes et al., 2020; Lowe, 2022), adding to literature that cautions against the assumption that digital solutions can automatically expand access to social protection in settings marked by sharp digital divides and deeply entrenched structural inequalities. It also brings renewed attention to theoretical understandings of informality and formalisation by reinforcing the point that informality is not defined by a single relationship and thus cannot be erased by a single point of connection being made with the state. Rather, informality operates across multiple dimensions. Drawing on the International Labour Organisation’s (ILO’s) conceptualisation under recommendation 204, informality encompasses not only the absence of formal employment relationships but also a complex set of rights deficits, including access to income security, social security, labour protections and legal recognition (ILO, 2015). Informality thus represents a multi-faceted configuration of relationships between informal workers and various state and non-state actors (Gallien and Van den Boogaard, 2023; Holland and Hummel, 2022). Understanding informality as this ‘bundle’ of both relational gaps and rights deprivations suggests that meaningful formalisation requires interventions that address these interconnected dimensions simultaneously, rather than treating it as a problem solvable through digital connectivity alone (ILO, 2015).

The implications of this are not merely conceptual, as policymakers and development partners increasingly advocate for digital solutions and registration platforms as crucial technologies to promote formalisation and improve states’ interactions with informal workers (e.g. World Bank, 2019). While this has an intuitive logic – digital tools can address the need for rapid scaling and large-scale data analysis – we need to better understand what issues they are and are not well suited to address, and to which forms of formalisation they give rise. Furthermore, the potential adverse outcomes of formalisation, including exploitation by intermediaries and the continued exclusion of marginalised subpopulations, need to be treated seriously to ensure that digital interventions lead to meaningful and inclusive outcomes of social policy and social protection measures (see, for example, Lowe, 2022; Meagher, 2021; Roy and Khan, 2021).

Crisis, formalisation and digitalisation

Crises have long shaped the ways in which informal economies are understood and governed. In many contexts, informal work functions as a critical buffer during economic downturns, absorbing shocks and sustaining livelihoods when formal employment contracts (Chen, 2012; ILO, 2020; Ohnsorge and Yu, 2022). To some degree, the COVID-19 pandemic disrupted this dynamic. Lockdowns, social distancing measures and global supply chain interruptions often disproportionately affected informal workers, who often lack legal protections, stable incomes and access to social support (Maurizio et al., 2023; World Bank, 2020). In India, the pandemic brought particular attention to migrant informal workers, whose dual vulnerability, as both informal workers and migrants became starkly visible when movement restrictions left them stranded without income, housing, or access to emergency support in their places of work (Rajan, 2020; Singh et al., 2024; Sinha, 2026). This moment of crisis generated increased public attention to informal labour and the vulnerability and economic precarity of informal workers, including migrant workers, though with often contradictory narratives: sometimes celebrated as ‘essential’ to the functioning of the economy, ² yet also being portrayed as linked to spaces for viral transmission (Meagher, 2022).

Alongside these shifting narratives about informal work, the pandemic also led to a new wave of formalisation initiatives, often framed as compatible both with addressing the vulnerability of informal workers and better controlling the risks associated with informal work. Resulting formalisation strategies have taken multiple forms, ranging from increasing registration to expanding access to social protection and state benefits. The diversity of these approaches reflects the diversity in how informality is commonly and colloquially understood. Following Hart’s (1973) original work, definitions of informality have been consistently reworked and revised, most notably through the work of the ILO and the International Conference of Labour Statisticians (ICLS). One of the most notable expansions here was the establishment of informality across multiple domains, covering both: the nature of enterprises and the characteristics of employment relationships, with informal work occurring in both registered and unregistered enterprises (Chen, 2012). However, outside of the work of the ILO and its partners, this has not been a unified conversation – in different policy domains and subfields, definitions and approaches have proliferated, alongside disagreements on where the line between formal and informal lies, whether it is in fact a line, and how it is measured (Gallien, 2024, forthcoming; Holland and Hummel, 2022).

In trying to make sense of different conceptualisations and policy agendas, a distinction can be made between state-centric, market-oriented and rights-based approaches to formalisation (Gallien and van den Boogaard, 2026). State-centric approaches view formalisation as part and parcel of enhancing the economy’s legibility for the state, alongside the state’s administrative capacity (Migdal, 2001; Scott, 1998). They have become particularly common within development policy circles, where initiatives such as mass tax registration campaigns are justified on the basis that they expand the fiscal base, increase transparency and facilitate public service delivery (Gallien and Van den Boogaard, 2023; Moore, 2023). Market-oriented approaches identify formality with features they conceive as critical for firm development: legal recognition, property rights, and access to credit and investment opportunities (de Soto, 1989). This perspective assumes that informality stems from regulatory barriers or lack of access to formal financial systems, and therefore, formalisation efforts are geared towards reducing these barriers to enhance productivity and investment potential (Bruhn and McKenzie, 2014). Meanwhile, rights-based approaches conceptualise formalisation as a pathway to extending labour protections and welfare entitlements to vulnerable groups, improving working conditions, legal recognition, and access to services. This perspective is illustrated by the ILO’s ‘decent work’ agenda (ILO, 2013) and groups such as Women in Informal Employment: Globalizing and Organizing (WIEGO).

These distinctions resonate closely with long-standing debates in Indian scholarship on informality and formalisation. Rather than viewing informality as a residual or transitional phenomenon, this literature has long situated its persistence within the political economy of post-1991 neoliberal reforms, highlighting the growth of informalisation both outside and within formally organised sectors (Kannan, 2014, 2017). From this perspective, increases in organised sector employment or enterprise registration do not necessarily signal improvements in labour conditions, as insecure and casualised forms of work have expanded within formal settings.

A central contribution of this debate is the distinction between capital-centred and labour-centred approaches to formalisation. As Unni (2018) argues, dominant policy approaches in India have largely pursued capital-centred strategies, equating formalisation with enterprise registration, compliance, and administrative normalisation, often without corresponding extensions of social protection or labour rights. Labour-centred approaches, by contrast, define formalisation in terms of substantive worker protections and welfare entitlements, a perspective reflected in both academic debates and long-standing worker-led advocacy (Jhabvala et al., 2003). These insights underscore why registration-led interventions may expand state legibility without necessarily transforming workers’ economic security.

Notably, formalisation agendas do not only differ in the features of informality that they emphasise but in their theories of how informal economic operations become formal. As Gallien and van den Boogaard (2023) have pointed out, there is a common tendency to collapse a variety of differences between formal and informal operations into a single aspect – tax registration, for example, or property titling – and to assume that other typical features of formalisation will automatically follow. In contrast, scholars increasingly argue that formality is better understood as a bundle of features, rather than a single dimension, or an automatic, linear process (e.g. Holland and Hummel, 2022).

These conceptual debates about what constitutes formalisation have taken on new relevance considering a growing policy turn towards digitalisation, which is increasingly presented as a solution to the challenges of registering and integrating informal workers into the state institutions (Lowe, 2022). This is intuitive from the perspective of the multiple approaches towards formalisation: if informality is seen as an issue of legibility, digital infrastructures can be seen as providing the scale and accessibility that is needed to rapidly expand registries (ILO, 2023). If formalisation is seen from a market-oriented perspective, these technologies can lower the transaction costs associated with formalisation, while also providing access and linkages to wider markets. From a rights-based perspective, digital technologies present both opportunities and challenges for workers’ empowerment. On one hand, while digitalisation may increase workers’ visibility in policy frameworks and potentially enable a new pathway to social protection, right-based approaches also critically examine how digitalisation can enhance existing vulnerabilities, undermine labour standards or facilitate surveillance over workers, or risk the collection and marketisation of data in ways that workers have little say or control over (Alfers and Ng’onga, 2024; Faith et al., 2024).

These logics and the corresponding appeal of digitalisation led many governments to adopt technology-driven tools for identifying and supporting informal workers during the pandemic. For example, Argentina’s Ingreso Familiar de Emergencia used digital platforms to register and support informal workers via emergency relief cash transfers, reportedly preventing over 2.8 million workers from experiencing extreme poverty (Calcagno, 2021; Morales, 2023). Nigeria’s Rapid Response Register aimed to create a comprehensive database to target cash transfers for the urban poor (Apera, 2021). In Brazil, the Auxílio Emergencial programme combined digital emergency cash transfers and registration systems with existing social assistance, contributing to measurable reductions in poverty and inequality (Arruda et al., 2022; World Bank, 2021, 2022). However, emergent evidence also notes limitations with over 7.4 million potential beneficiaries lacking Internet access (Lowe, 2022; Lustig and Trasberg, 2021). Across these and similar initiatives, a common motivation for digitalisation was the belief that it could quickly scale registration efforts and improve social protection targeting for those excluded.

The lessons from these recent initiatives resonate with longer-standing literatures on state legibility and technologies of governmentality (Scott, 1998), while aligning with more recent critical scholarship on digitalisation and formalisation. Scholars have increasingly cautioned that digital tools do not inherently enhance inclusion but may also reinforce existing hierarchies and reproduce patterns of exclusion and marginality embedded within social, economic, and political structures. Roy and Khan (2021), for example, argue that digital technologies can exacerbate structural inequalities and pre-existing asymmetries of power, as more technologically advanced or better-resourced informal operators are better positioned to navigate new systems.

Against, this backdrop, India’s e-Shram portal presents an important case to examine the evolving relationship between crisis, digitalisation, and the formalisation of informal work. Its stated ambition to serve as a comprehensive ‘one-stop’ portal for informal workers – though the extent to which this vision materialises in practice remains contested, positioning it at the intersection of multiple policy aims, including extending social protection, enhancing state legibility, and improving employment opportunities. Analysing the design and implementation of e-Shram thus allows us to probe wider into the debates about the meaning of formalisation and its impacts on meaningful outcomes for informal workers, the logics that shape it, and the promises and limitations of digitalisation. Importantly, these policy aims reflect the intersection of market-based, state-centric, and rights-based approaches to informal work – approaches that, while analytically distinct, often operate in tension and combination within the same policy interventions.

Informal workers and social protection in India

The COVID-19 pandemic and resulting lockdowns drew attention to a range of long-standing disconnections between informal workers and state institutions in India and beyond. Globally, 1.6 billion workers were affected by COVID-19 lockdowns and containment measures (ILO, 2020 ‘Impact of lockdown measures’). The economic slowdown and public health crisis resulted in over 78% of informal workers losing their livelihoods (Action Aid, 2020) and an estimated 75 million people to fall below the poverty line (Kochar, 2021). Worldwide, as pre-existing gaps in the provision of social protection to the informal sector widened (Lund, 2012; Miti et al., 2021; Sojo, 2016), informal workers remained excluded from many state-led pandemic relief efforts (e.g. CGAP, 2020; Chen et al., 2022; Rateng, 2020). Informal workers’ limited and fragmented linkages with state programmes, coupled with their restricted access to formal social safety nets, heightened their vulnerability and reinforced social inequalities. By exposing the state’s inability to adequately reach informal workers, the crisis exposed the limitations of existing social protection schemes, thereby setting the standards, expectations, and context for new registration programmes (Gallien and van den Boogaard, 2021). In the Indian context, these dynamics were acutely visible during the pandemic. Below, we review the fragmented pre-pandemic landscape of social protection for informal workers, as well as the emergency relief efforts that exposed and intensified these disconnects – ultimately prompting the government to introduce digital registration as an attempted corrective measure.

Throughout India, informal workers have historically maintained a complex and often precarious relationship with state social protection programmes. Numerous social movements have led to the establishment of a patchwork of welfare programmes and schemes across federal states. These programmes aim to provide some degree of support to informal workers, yet they often do so inconsistently, making it challenging for informal workers to navigate access (Centre for Policy Research and UNICEF, 2021). This is illustrated by limited access to social protection in practice. Prior to the pandemic, India ranked 76th out of 82 countries on the Global Social Mobility Index, highlighting the country’s poor performance in providing social security, particularly for informal workers (Global Social Mobility Index, 2020).

Pre-existing welfare programmes for informal workers in India fall under four broad categories. First, informal workers have varying access to state-level occupational welfare boards (Agarwala, 2013), with some states covering as many as 17 occupational categories, such as construction, mining, and street vending (Sinha, 2026). These occupational welfare boards provide registered workers with a range of welfare benefits, including health insurance, maternity benefits, and pensions. Second, informal workers not covered by these welfare boards are eligible for benefits under the Unorganised Workers Social Security Act (2008), ³ which entitles registered workers to basic welfare protections from the state. Third, aside from occupational safety nets, informal workers in India can also access state welfare benefits tied to their socioeconomic status, such as being below the poverty line or belonging to a vulnerable group including ‘Scheduled Castes’, ‘Scheduled Tribes’ or ‘Other Backward Classes’ ⁴ . These benefits include health care ⁵ (especially for maternal health) and children’s education. Finally, broader social security schemes, such as the Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS) and the Public Distribution System (PDS), may also indirectly benefit informal workers (Jha and Mishra, 2022).

Significant barriers have long hindered informal workers from accessing social welfare through these schemes. The fragmented nature of the programmes has meant that many workers still lack access to them due to ineligibility, a lack of awareness, or other registration obstacles. Even when workers are eligible, the decentralised and bureaucratic registration process has often resulted in low uptake, as workers are required to register and re-register repeatedly. Digital and institutional barriers further exclude informal workers from obtaining benefits. While, in theory, welfare boards offer registered informal workers access to comprehensive social security, research highlights that workers’ access to welfare boards and benefits remains limited due to poor awareness and the difficulties of digital registration (Agarwal, 2022; Barman and Sarkar, 2022; Bordoloi et al., 2020). Similarly, the reach and coverage of the Unorganised Workers Social Security Act remain inadequate more than a decade after its implementation (Mishra, 2017): the Parliamentary Standing Committee discovered that the act has only reached 6% of the unorganised workforce (cited in Pandey and Gupta, 2022). Over time, despite the digitalisation of various schemes through Direct Benefit Transfer (DBT) schemes, which are intended to streamline welfare distribution, programmes often encounter backend errors and issues with dormant or incorrect bank accounts linked to Aadhaar numbers (Dvara Research, 2021).

Overall, while a range of social protection programmes for informal workers existed prior to the pandemic, fragmented programme delivery, low registration rates, institutional exclusion and limited ability to access them has limited their effectiveness and reach. These realities meant that during the pandemic, informal workers’ access to preexisting social protection programmes remained limited, reflecting broader limitations in access to social protection for informal workers worldwide (e.g. Afshar and Devenish, 2020; Battersby, 2020; Qiang and Kuo, 2020; Rateng, 2020). The pandemic also made clear that these exclusions were unevenly distributed across existing vulnerabilities of gender, caste, religion, migrant status, and geography, resulting in the amplification of inequality and precarity across pre-existing fault lines in the society (APU, 2021; Deshpande and Ramachandran, 2023; ILO, 2021; Jesline et al., 2021; Kesar et al., 2021; Rao et al., 2020).

As elsewhere, across India, the COVID-19 pandemic spurred the introduction of emergency relief, such as short-term cash transfers and emergency ration dispersion (Singh et al., 2024). However, many of these crisis reliefs were primarily channelled through pre-existing systems that targeted either formal sector workers or those already registered in government databases (ILO, 2020). For example, the government of India distributed 36,659 Crores in direct benefit transfers during the first lockdown (March–May, 2020), using pre-existing government programmes. ⁶ This reliance on pre-existing databases, while efficient for timely payments, often excluded informal workers with fractured connections with the state, compounding pre-existing inequalities.

In delivering new relief, the government struggled to identify informal workers due to the lack of prior registration in accurate or inclusive databases (Jha and Mishra, 2022), leading in many cases to the reproduction of pre-existing patterns of exclusion for informal workers. ⁷ For example, a nationwide study of informal workers found 78% of informal workers were unable to secure emergency cash assistance relief, further showing that women faced additional challenges due to digital registration requirements (Action Aid, 2020). Female informal workers, particularly those in domestic work and home-based work, were disproportionately affected, as their occupations were often not recognised by the state (APU, 2021; Jan Sahas, 2021; Nanda et al., 2021). Workers in these sectors were also likely to have uneven access to an intermediary connection with the state, such as a labour organisation (such as SEWA) or intermediaries that may share information with them (Unni, 2023). ⁸ Similarly, informal migrant workers were also often absent from these forms of state databases due to the unrecognised intersection of mobility and informality (CLRA, 2020; Barhate et al., 2021; Sinha, 2026; SWAN, 2020b).

Barriers to accessing emergency relief mirrored the obstacles to accessing preexisting social protection, including documentation gaps, inactive bank accounts, and Aadhaar details mismatches (MicroSave, 2021). In addition, limited digital literacy and smartphone access further constrained informal workers, forcing them to rely on brokers and computer shop intermediaries, who sometimes charge fees to provide services (Sinha, 2020; Webb et al., 2023). In some instances, even where workers managed to register with the welfare schemes, benefits were not forthcoming due to limited claim making potential of beneficiaries; for instance, registered beneficiaries who have moved across state borders struggled to access relief measures in destination states (Sinha, 2026). Overall, relief measures were better able to connect with ‘easy to reach’ informal workers, highlighting the existing barriers to access for vulnerable groups.

Digital registration and narrow formalisation

These dynamics laid bare the fragmented architecture of social protection for informal workers and underscored the urgent need for more systematic, scalable and accessible social protection mechanisms. It is in this context that the Indian government launched the e-Shram portal – an effort to digitise registration in order to improve access to social protection and enhance the targeting of informal workers. As we explain below, these ambitions expanded over time, with e-Shram increasingly seen as an avenue for not just the formalisation of governance, but the formal integration of informal workers. ⁹ We first explore the pressures for digital registration and the ways in which e-Shram played an evolving role within India’s broader digital governance agenda. This sets the stage for understanding how the relationship between e-Shram and formalisation has been perceived and the emerging contradictions that have arisen. Second, we demonstrate the limited translation of digital registration into improved access to social protection, giving particular consideration to the ways that exclusions persisted along lines of gender, migration status, and occupation. We show e-Shram emphasised the enrolment of informal workers into digital systems but did not always adequately engage with the deeper structural disconnections and vulnerabilities that the pandemic highlighted. Overall, our analysis highlights the ways in which the Indian government’s use of digital registration remains a narrow form of formalisation, despite its stated ambitions.

Pressures for and promises of digital registration

In India, the pandemic amplified public scrutiny of state failures in social protection. For perhaps the first time, the hardships faced by informal workers – such as migrant workers walking hundreds of kilometres to return home, widespread job losses, and lack of social security – became central issues in the Indian media. This public concern sparked a movement of legal advocacy mobilisation, with petitions from labour activists, NGOs, and trade unions calling for stronger state action to protect workers’ welfare. ¹⁰ The petitions highlighted how the lack of adequate safety nets left many vulnerable to severe hardships during the pandemic, as described above.

Most importantly, in 2020 the Supreme Court of India took up a Suo motu case, issuing a strong indictment of the government and highlighting the disconnect between the promises of welfare schemes and their actual implementation:

Both the Central Government and the State Governments have floated various schemes for unorganized workers, building and construction workers but the sad picture of the ground reality is that large number of beneficiaries are deprived from access to these welfare schemes of the Central Government or the State Governments. In this petition, we had issued various directions earlier regarding the registration of unorganized workers, but the progress has not been satisfactory rather shows lethargy on the part of the concerned Government. ¹¹

This public and legal pressure played a significant role in shaping the government’s crisis responses, best illustrated by the push for digital infrastructure for registration and social protection delivery. In its defence to the Court and Parliament, the Government of India cited ‘the lack of accurate data’ as being at the root of its inability to respond to the crisis effectively (Paliath, 2021; Reddy, 2020). To respond to this issue, the Ministry of Labour and Employment introduced the e-Shram portal, with the mission of creating the first national database for migrant and unorganised workers. It aimed to improve the implementation of social security schemes by aiding the portability of schemes for unorganised migrant workers and creating an integrated database for service delivery through more effective data sharing (e-Shram, n.d.). Indeed, in 2022, the Minister of Labour and Employment in India, in his statement to the Lok Sabha, or House of the People, noted that besides registration, the key objective of the e-Shram portal is to enhance welfare delivery through digital integration of unorganised workers with government portals to facilitate the ‘formalisation of the economy’. The Government of India framed formalisation as the process, ‘when jobs move from the informal sector (small, unregistered businesses and daily wage workers) into the formal sector (where, employees have contracts, job security, and access to benefits)’, where ‘workers enjoy legal protections like a fixed salary, healthcare benefits, paid leave, and retirement savings’ (PIB, 2024c). This has been further defined as a process of ‘bringing more workers under the umbrella of government regulations and benefits, so they are not left vulnerable to economic ups and downs’ (PIB, 2024c). This creation of a national database for unorganised workers in the aftermath of the pandemic was widely welcomed, especially for its potential to strengthen social security nets for informal workers (Srivastava, 2021):

One of the main objectives of the e-Shram portal other than registration is to facilitate delivery of benefits of social security schemes to the unorganised workers through integration with other Government portals. In the budget 2022-23 Government announced integration of e-Shram, with National Career Service (NCS) portal, ASEEM portal and Udyam portal to enable credit facilitation, skilling and recruitment with an aim to further formalise the economy and enhance entrepreneurial opportunities for all. The integration of e-Shram has already been done with NCS portal. ¹²

Over time, the mandate for e-Shram expanded, with the government announcing its integration with other registries and portals as part of a broader effort towards formalisation. ¹³ This move towards integrating e-Shram with other platforms was seen by the government as a pathway to provide informal workers with access to ‘decent jobs, credit facilitation, skilling opportunities, and recruitment services’ (PIB, 2022a, 2022b). By 2024, the platform was being promoted as a comprehensive ‘one-stop solution’ for informal workers, positioned to enable access not only to social protection but also employment opportunities, skill development, and credit for addressing the needs of informal workers (PIB, 2024a; PIB, 2025). The stated aim is not merely to centralise and digitalise registration for social protection, but to formalise the economy by linking informal workers to various employment resources and welfare schemes, facilitating their transition into the formal sector and overall enhancing the entrepreneurial opportunities available (Kulkarni and Datta, 2024; PIB, 2022b, 2024a).

As e-Shram expanded, the usage of the digital platform was widely cited by key actors in the public discourse as a crucial step towards ‘formalisation’ (Citigroup, 2024; Economic Times, 2021; Indian Express, 2021a; Kulkarni and Datta, 2024; Patnaik and Pandey, 2021; PIB, 2024a; SBI, 2024; Rajora, 2024). The discourse surrounding formalisation and the e-Shram portal in India emerged within a context characterised by two key developments: first, a growing policy enthusiasm for formalisation (Goldar, 2023; PIB, 2018, 2021c, 2024c) and second, the growing trend towards platformisation of governance and the adoption of e-governance initiatives (Dattani, 2019; Parkar and Lama, 2023; Paunksnis, 2023). ¹⁴ Collectively, these initiatives aimed to strengthen digital interlinkages between citizens and the state or formal economy and are in line with the ILO’s 204th recommendation, which highlights the significance of effective internal digital ecosystems within countries (Dhanya, 2024), as well as growing advocacy for formalisation within BRICS and G20 (Financial Express, 2024; PIB, 2024b).

With this long-standing policy and discursive enthusiasm around the potential of e-formalisation, the growing discourse from both the state and the public stakeholders signalled e-Shram as a formalising tool. For example, the SBI (2021) claimed a 17% formalisation rate in India following e-Shram’s introduction, understood through four key indicators. First, is the registration of a large number of unorganised workers through the portal. Indeed, by 2024, the e-Shram portal had registered over 302 million unorganised workers. Access to the portal was facilitated by intermediaries, with over 62% of registration occurring through assisted mechanisms such as Common Service Centres (CSCs) and Seva Kendra. ¹⁵ Second, was the increase in the number of challans generated in the Employees’ Provident Fund Organisation (EPFO) payroll, reflecting greater compliance with social security regulations. ¹⁶ Demonstrating that they see this as a form of formalisation, the Government of India, drawing on the Reserve Bank of India’s database, claimed that the Indian economy is formalising, noting that ‘EPFO data clearly shows that more people are getting access to secure, formal jobs every year’ (PIB, 2024c). To substantiate this, the notification offered the example of Ramesh, a factory worker employed on a daily wage in precarious conditions due to the absence of job security. His transition to ‘formalisation’ is attributed to his employer’s decision to register the business with EPFO. Third, was an increase in the demand for agricultural credit, signalling to some financial inclusion in formal institutions. Finally was the rise in digital payments, which some suggest points to greater participation in the formal economy (Sethi, 2023), allowing for state tracking of financial transactions and bringing more workers and businesses under regulatory oversight.

These indicators are in themselves notable. Clearly, a huge number of individuals who were previously ‘invisible’ are newly legible to the state and were made so in a remarkably short period. However, they are not representative of formalisation per se. For instance, the government narrative around EPFO shifts the focus away from workers themselves, locating formalisation in employer compliance rather than in improvements to labour conditions. By equating employer registration with the formalisation of employment, the example not only oversimplifies the process but also obscures the persistence of workers’ precarity, effectively presenting structural compliance as synonymous with worker security.

Moreover, these measures of success do not engage directly with the primary challenge that the pandemic highlighted the continued lack of social protection for informal workers’ despite the presence of schemes (Bhan, 2024; Chauhan, 2024; Deshingkar, 2022; Naik, 2024; PRIA, 2021; Sankaran, 2022; Sriram, 2024; Zoya, 2022). An evaluation by WIEGO – a civil society partner involved in registering informal workers on the portal – highlighted this disconnect. It noted that while e-Shram

has been successful in creating a data set of [workers in informal employment, migrant workers and women workers who previously had no access to social security and welfare benefits] – which did not exist before – and in creating a worker identity, it has not translated into any substantial new benefits. (Sinha, 2024) ¹⁷

This gap between registration and benefits highlights a critical question often discussed only theoretically: what constitutes meaningful formalisation in practice?

Limits of digital registration as a ‘one-stop-solution’ for informal workers

While e-Shram was initially launched as a targeted intervention to integrate the vast unorganised workforce into the social security framework (PIB, 2021b), its scope and the government’s stated aims about since expanded significantly. This expansion reflects the growing ambitions of the state to use digital infrastructures to ‘integrate unorganised workers into the formal economy’ (PIB, 2024a). In theory, once registered on the e-Shram platform, workers are meant to be able to use it as a central hub to access job opportunities, skill-building resources, and enrol in 13 national social security programmes and seven employment-generation initiatives, including central employment schemes, pension plans, and health insurance. However, in practice, workers’ access to tangible benefits as a result of e-Shram registration remains unknown (Kumar, 2022; Sinha, 2026; Sriram, 2024). Meanwhile, early evidence suggests that it continues to reproduce many of the same structural disconnections that shaped workers’ vulnerabilities during the pandemic. This underscores a critical disjuncture between the policy discourse of digital registration and the lived realities of informal workers, raising fundamental questions about how formalisation is conceptualised and operationalised – and whose needs it ultimately serves.

A key limitation of e-Shram is the mismatch between its centralised digital infrastructure and India’s fragmented, decentralised welfare delivery system. While the platform offers the advantage of connecting informal workers to a national database, there is little clarity on how federal labour provisions and schemes for unorganised workers – typically implemented at the state or local level, will be operationalised through it (Singh et al., 2024). This gap is critical, as labour welfare provisions addressing unorganised workers’ conditions have historically been designed and implemented subnationally (Agarwala, 2013). For instance, India has distinct welfare boards for unorganised occupations such as construction, beedi work, handloom, and street vending. Yet, while workers can enrol on e-Shram, they currently lack access to these state-level welfare provisions. This is evident in the case of domestic workers’, while e-Shram has recorded significant registration of domestic workers’, the coverage for provisions for domestic workers’ remain unevenly implemented across state’s in India (Duggirala and Kumar, 2021; Sahu, 2023; Sinha, 2022; The Tribune, 2024). The absence of coordination mechanisms between centralised data collection and decentralised policy implementation raises concerns about the effectiveness of service delivery and the actual reach of welfare entitlements (Rajya Sabha, 2025b, 2025d). Anecdotal evidence further points to uncertainty over the future of state-level occupational welfare boards, the integration of schemes, and data-sharing practices, with limited clarity on how information collected via e-Shram will ultimately translate into welfare delivery at the subnational level (Kulkarni and Datta, 2024).

Moreover, though the portal collects detailed information on occupational identity, it does not facilitate direct linkages to key sector-specific welfare schemes administered at the state or local level (Zoya, 2022). As a result, workers face a duplicative registration burden, navigating multiple systems independently. For instance, an informal construction worker registered on e-Shram must still separately enrol under state-specific Construction Workers’ Welfare Boards in each state of employment, even after obtaining a unique e-Shram card. This duplicative process exacerbates bureaucratic hurdles and creates additional barriers to access, leaving workers to negotiate a fragmented welfare landscape marked by overlapping programmes that fail to provide comprehensive protection (Centre for Policy Research and UNICEF, 2021; Mehrotra et al., 2014; Oxfam India, 2021; Sundar, 2022; Tupe, 2024).

The introduction of e-Shram as a new registration system has also generated confusion among informal workers, leading to unintended self-exclusion from existing occupational schemes (Sinha, 2026). Many assume that e-Shram registration automatically ensures access to all welfare schemes and benefits, eliminating the need for separate registrations (Haqdarshak, 2023; Rajput and Rajan, 2023). This misunderstanding has prompted some workers to withdraw from state-level occupational welfare boards, thereby losing access to sector-specific benefits that remain outside the e-Shram framework. The scale of this confusion is signalled in the growing number of parliamentary questions on e-Shram’s integration with existing systems, raised by parliament representatives seeking clarity on its role in welfare delivery at the state level (Rajya Sabha, 2024, 2024a, 2025c, 2025d).

A further critical limitation concerns inequitable access to digital public infrastructure in a context marked by persistent digital divides. Access to mobile and Internet services remains uneven across regions, with particularly pronounced disparities along gender and caste lines (Oxfam, 2022; Sinha, 2021, 2024; Sriram, 2024; Tupe, 2024). Marginalised groups, especially Scheduled Castes and Scheduled Tribes (SC/ST) and women, continue to face disadvantages in access to computers, phones, and the Internet (Oxfam, 2022). These divides compound barriers to the effective use of platforms such as e-Shram. More than half of those registered on e-Shram have relied on intermediaries such as Common Service Centres, unions, and civil society organisations to complete the process (e-Shram, n.d.). Organisations supporting registration efforts note that digital document requirements such as Aadhaar-seeded mobile numbers, as well as limited access to phones and the Internet, are major bottlenecks (Haqdarshak, 2023; Sinha, 2024). Even when workers possess mobile phones, challenges of digital literacy and difficulties in navigating the platform remain significant, with women disproportionately affected (Das, 2022; Sinha, 2021; WIEGO, 2024).

The platform’s limitations become particularly pronounced when examining its reach across different demographic groups, revealing how registration processes can reproduce existing exclusions despite expanded eligibility criteria. While it is noteworthy that e-Shram has achieved a substantial share of women’s registration – over half of those registered to date – this statistical visibility is yet to translate into meaningful improvements in addressing gender-specific vulnerabilities, many of which persist beyond the act of registration (Kumar, 2022; Sinha, 2024). The pathway for women’s access to occupation-related rights and social security schemes remains constrained by limited sector-specific labour legislation existence and enforcement. Although many agricultural, domestic, and care sector workers have registered on the platform, the absence of corresponding labour law implementation means that registered workers cannot access benefits such as maternity leave, childcare support, or workplace protections that would be essential for women’s economic security. This gap mirrors the issues seen during the pandemic, as specific schemes for these workers remain largely unformulated (Chadha, 2020; Singh, 2024).

Relatedly, while e-Shram aims to broaden eligibility for previously excluded categories such as migrant and gig workers, the nature of their work – characterised by instability, mobility, and absence of legal protections- presents distinct challenges that differentiate them from other informal worker categories. Unlike relatively stationary local workers, migrant and gig workers face structural barriers that registration alone cannot address. For mobile and gig workers, long-standing obstacles such as the need for local documentation, lack of benefit portability and multiple employers perpetuate exclusion. Although the portal has the potential to address portability issues, it currently provides limited information on workers’ mobility. For circular and short-term migrants, movement between home and destination states restricts access to benefits, which are often contingent on long-term residence (Sinha, 2026; Srivastava, 2021). These systemic gaps constrain migrant workers’ ability to access welfare despite registration. Similarly, while gig and platform workers could previously register on e-Shram, the absence of a national legal framework recognising them as workers limited their access to social security schemes (Rajya Sabha, 2025d). So far, only a few states ¹⁸ have introduced welfare bills specifically for gig and platform workers, leaving most without coverage (Paliath, 2025; Pankaj and Jha, 2024; WIEGO, 2023). In 2025, there has been a growing push to include both gig workers employed by aggregators within the scope of social security; however, the gap between enrolment and actual service delivery remains significant (Kar, 2024; Sinha, 2026).

Furthermore, across occupations age-based exclusion of vulnerable groups in registration programmes persists. Most notably, the e-Shram portal does not allow for the registration of unorganised workers above the age of 60. ¹⁹ This exclusion is particularly significant given that workers over 60 account for a considerable share of both rural and urban unorganised workforce, with labour force participation among this age group reaching 33% in 2019–2020 (Adhikari and Dutta, 2022). This restriction becomes increasingly problematic as more workers, especially women, rely on unorganised sector employment beyond mandated retirement ages as essential livelihood strategies (Dhar, 2014; Roy and Barua, 2023).

While the limitations of e-Shram in part simply reflect the underlying challenges that informal workers face in accessing the relevant underlying social protection programmes, the ongoing discourse highlights a prevailing assumption that registration on the portal alone constitutes formalisation. The registration of informal workers through a digital portal has often been framed as the first and most crucial step towards integrating them into the formal labour market. However, there is a danger of registration being seen not as a tool but as the end goal. Furthermore, there is a risk of overlooking the complexity of formalisation, which involves more than just data collection (Meagher, 2021), encompassing the extension of worker rights, dignified pay, comprehensive social security, and protections that go beyond simply registering workers’ identities.

The pandemic exposed how registration alone cannot protect informal workers from economic shocks or provide them with adequate support. The continued reliance on fragmented welfare schemes, many of which have incomplete coverage, demonstrates that formalisation through registration is an oversimplification of the broader issues at play. Moreover, the focus on e-Shram as a solution for formalisation risks conflating the formalisation of the informal workforce with the formalisation of the informal sector. The former refers to integrating workers into a system that provides social security and legal protections, while the latter deals with regularising the enterprises or sectors where they work. e-Shram primarily targets the workforce, but without corresponding reforms in the informal sector – such as enforcing labour laws in small and unregistered enterprises or providing incentives for businesses to register with the tax authority, for instance – the effort to formalise the workforce remains incomplete.

Conclusion

In India, as around the world, informal workers faced significant challenges in accessing relief and support programmes during the COVID-19 pandemic, reflecting and reinforcing long-standing histories of exclusion and marginalisation. This in turn created increased pressure for new and rapid forms of formalisation, often through the creation of digital registries to better target households and individuals for service delivery (WIEGO, 2021). This reflects a growing policy trend around encouraging registries and digital tools as a means to enable effective service delivery of welfare benefits (ILO, 2023).

On its surface, this makes sense: a lack of previous registration with state institutions limited informal workers’ ability to receive state relief during the pandemic. And, indeed, e-Shram’s centralised database offers a unique opportunity to address India’s federal complexities in labour welfare governance, illustrated through at least three channels. First, with workers registered in a unified system, this data has the potential to solve long-standing issues of scheme portability and interoperability, which is particularly crucial for mobile migrant and gig workers who move across state’s, using unique identification systems to ensure interstate data sharing protocols that maintain benefit continuity while updating locations in real time. Second, the database has the potential to offer predictive analysis that recognises the fluid, multi-occupational nature of India’s informal workforce, generating automated alerts for state governments about seasonal worker flows and designing flexible benefit packages that travel with workers across their occupational cycles, creating dynamic interventions that match the reality of how informal workers navigate their livelihoods. Third, integration with existing welfare infrastructure through API connections could eliminate bureaucratic bottlenecks by automatically triggering enrolment in relevant programmes upon e-Shram registration, enabling automated eligibility assessments and real-time bidirectional data sharing that transforms the platform from a mere registration portal into an active gateway connecting workers to the full spectrum of social protection (Sinha and Palavajhalla, 2022).

Despite its promise, it remains to be seen how e-Shram will deliver on its promises. Evidence on state use of the platform and its expanding data infrastructure is limited, but experiences elsewhere caution against viewing digital formalisation as a neutral welfare tool. Research signals that digitalisation can make marginal and hard-to-reach populations more legible to the state, a process compatible both with enhanced social protection and with political mobilisation or surveillance (Baxi, 2019; Maseiro and Shakthi, 2020; Paunksnis, 2023). As scholarship on technologies of governance suggests, registration systems may be deployed towards diverse ends (Scott, 1988; Sen, 2020). ²⁰ Some argue, Aadhaar, India’s biometric identification project, illustrates this duality, functioning simultaneously as a welfare instrument and a surveillance tool (Henne, 2019; Jacobsen, 2012; Ramanathan, 2016). Similarly, e-Shram’s integration into India’s broader Digital Public Infrastructure, largely built through public–private partnerships, raises risks of data monetisation and privacy violations (Dixon, 2017). Embedding market logics in welfare systems may recast individuals as both beneficiaries and data subjects in the digital marketplace (Chaudhari and König, 2018; Khera, 2019). Beyond these political and economic implications, e-Shram may also generate institutional and technological path dependencies that constrain more transformative reforms. In a landscape of uncertain integration, infrastructural legibility risks entrenching a thin logic of formalisation, where registration substitutes for extension of meaningful rights (Sinha, 2026). Without substantive extension of protections, the platform may amount to little more than ‘an empty gesture’ for informal workers instead of comprehensive social protection (Sinha, 2024).

If we take the issues exposed during the COVID-19 pandemic as the issues that formalisation programmes in India need to address, as indeed has been the approach of the Supreme Court, then the e-Shram portal has been surprisingly silent on a range of them. This then throws substantial doubt on the idea that initiatives like e-Shram have themselves ‘formalised – or shrunk’ – India’s informal economy, despite claims to the contrary. While there is a reasonable argument to be made that platforms like e-Shram are a valuable element of a longer process of formalisation, there is a risk that the common understanding of formalisation is being narrowed and turning into a short-hand for registration: that there is a conflation of the formalisation of the governance of informal work by the state, and the actual formalisation of that work. In a context where informality often stems from unequal employer–employee relationships – or, more specifically, the absence of such relationships – the difference between the two is often stark. Consequently, the push for state-centric formalisation efforts must be critically evaluated, considering the broader, multidimensional nature of informality and the lived experiences of informal workers within the country. This also means evaluating critically the common conception of informal workers as merely self-employed or as small firms that are primarily distinguished by their unregistered status and recognising them in a wider set of economic relationships.

This case study highlights the acute practical consequences of how formalisation is defined and measured. In line with recent work, formalisation should not be understood as a singular or instantaneous shift, but as a complex and layered process embedded in a multidimensional set of relationships. From the perspectives of those in informal work, formalisation is not a ‘light-switch’ like moment that can be simply achieved through registration or digital interventions. Instead, formalisation efforts are inherently political and must be approached as an evolving and multidimensional pathway that reflects the unique contexts and the goals of informal actors themselves. By reframing formalisation as a nuanced engagement rather than a one-time intervention, policy discussions can better recognise the potential and the limitations of such efforts to improve social protection, equity, and state accountability.

There are direct policy implications in these discussions. Recognising formalisation as a relational process challenges states to develop more meaningful dialogue with informal workers. Recognising formalisation as a multi-faceted phenomenon highlights the type of policy design that is necessary in this area. It suggests moving away from ‘quick fixes’, and reforms and towards a recognition that formalisation requires a long-term coordinated approach across a wide range of departments and institutions. In sum, efforts towards digital registries as seen in the case of India need to aim for more than just digital inclusion; they must address the deeper structural inequities and vulnerabilities faced by informal workers. Without a more comprehensive approach that includes legal protections, labour rights, and social protection, registration risks becoming a hollow promise rather than a pathway to meaningful inclusion. Despite being a success in terms of garnering registration, the e-Shram digital registry’s link to formalisation raises important conceptual questions about what forms of formalisation are being prioritised and who benefits from these efforts.