By Shri Dinkar Kapoor, State General Secretary, All India Peoples Front, Uttar Pradesh
(This article first appeared in Countercurrents.org and is reproduced from there in the interest of the working class.)
The Outsourcing Services Corporation is an attempt to give a legal facade to what is otherwise an unlawful continuation of contract labour in permanent jobs. A system is being created to provide outsourced human resources for a large number of regular and continuous functions performed in government institutions. If the Outsourcing Services Corporation remains limited to merely organizing and regulating contract agencies, then instead of resolving the problems of outsourced workers, it will become a process of institutionalizing outsourcing and providing a legal cover to an otherwise unlawful system.
Chief Minister Yogi Adityanath formally launched the Uttar Pradesh Outsourcing Services Corporation (UPCOS) yesterday, on 2 September 2026. The government claims that the implementation of a decision announced a year ago will make the outsourcing system operating in government departments more transparent and organized. The government portal describes the initiative with the slogan: “Reliable Services – Transparent System – Digital Solution.” It claims that outsourced employees will receive their salaries on time, EPF and ESI benefits will be ensured, arbitrariness in the selection of outsourcing agencies will end, and lasting trust will be established among personnel, agencies and government departments. Agencies will be selected through the GeM portal.
The Corporation has been established as a non-profit company under Section 8 of the Companies Act, 2013. The government says that the Corporation will protect the interests of outsourced employees and function as a regulatory and coordinating institution between government departments and private agencies. At first glance, this arrangement may appear attractive, but a closer examination of its provisions and actual purpose raises several serious questions.
The first question is: Is merely making the outsourcing system transparent a solution to the employment problem? In government departments across Uttar Pradesh, a large number of employees have been working for years on jobs of a permanent nature, yet they neither receive the status of regular employees nor enjoy employment security. Their wages are low, employment is insecure, and in many cases they have to struggle even for their social security rights.
Under the Corporation’s system, services such as medical care, engineering, project management, accounts, research, teaching, nursing, pharmacy, paramedical services, data processing, typing, electrical work, mechanical work, laboratory services, driving, office assistance, sanitation, horticulture, catering and security have been brought within the ambit of outsourcing. In other words, a system is being created to provide outsourced human resources for a large number of regular and continuous functions performed in government institutions.
This is where the biggest question arises. If a job is continuously required in a government department and its nature is permanent, why is a regular post not created for it? The Uttar Pradesh government’s own earlier government orders contain restrictive provisions regarding outsourcing against sanctioned posts. Yet dependence on outsourcing for permanent and continuous work is being increased.
Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 empowers the government to prohibit the employment of contract labour in work of a permanent nature. The objective of the law is not merely to promote the contract system, but also, where necessary, to abolish it and regularize workers engaged in such work. The Outsourcing Services Corporation appears to be an attempt to give a legal facade to what is otherwise an unlawful continuation of contract labour in permanent jobs.
The government’s second major claim is that the arbitrariness of outsourcing agencies will now end. But the question is: How much will the status of employees actually change merely because the agency changes? Under the Corporation’s system too, the formal employer of the employee will remain the outsourcing agency. The employee will work in a government department but will not be a government employee. His or her employment will continue to depend on the contract and conditions imposed by the private agency.
Selection of agencies through the GeM portal may certainly make the process more digital and competitive, but this by itself does not guarantee workers’ rights. Genuine transparency will exist only when the government makes public how much the department pays the agency per employee, how much the employee actually receives, how much service charge or margin the agency retains, how much is deposited towards EPF and ESI, and how many complaints have been received and acted upon.
The issue of remuneration is also extremely important. Under the Corporation’s system, minimum remuneration has been prescribed for different categories of employees. But merely announcing a minimum amount is not sufficient. The government must also make public the difference between the actual remuneration received by outsourced employees and the salaries, allowances, social security and other benefits available to regular government employees. This disparity may be even more serious in specialized services. For example, if the actual permanent cost of the services of a doctor or nurse in a government hospital, or an engineer or technical employee in a government department, is considerably higher than the minimum remuneration prescribed by the Corporation, the government must explain how quality services will be ensured at such low rates.
It is also important to point out that minimum wages in Uttar Pradesh have not been revised for the past 12 years. Following the Noida workers’ movement, the Chief Minister himself had announced that a Wage Board would be constituted in the first week of May and that minimum wages in Uttar Pradesh would be revised. Yet even after four months, this has not been done.
The government must also provide clear information regarding EPF and ESI. The current wage ceiling for ESI coverage is ₹21,000 per month, while the wage ceiling applicable to EPF is ₹15,000. In such circumstances, how exactly will the government bring these personnel under these schemes? No clear answer has been provided. The insurance, medical treatment and accident benefits announced by the government are already covered under EPF and ESI provisions. Paid leave during the period of medical treatment is also covered under the applicable provisions. Therefore, the crucial issue is to ensure that the actual contributions of eligible employees are deposited on time and that employees receive a proper record of these contributions.
The reservation provisions also face serious challenges in implementation. The Corporation’s system reportedly provides for reservation for Scheduled Castes, Scheduled Tribes, Other Backward Classes, Economically Weaker Sections, women, persons with disabilities and ex-servicemen, among others. These provisions will have meaning only if the entire recruitment process is made public, selection lists are made available, and there is an effective mechanism to take action in cases of violation of reservation rules.
Another important issue concerns the tenure of agencies. Under the Corporation’s system, agencies are to be empanelled for a minimum period of three years. This should not be interpreted as a three-year guaranteed tenure of employment for workers. However, if one agency is replaced by another, what will happen to the continuity of service, seniority, leave, gratuity and other social security rights of the employees? The government must provide a clear answer to this question.
The biggest irony is that the very Corporation whose stated objective is to regulate the outsourcing system is itself reportedly proposing to use outsourced human resources for various positions within its own structure.
In reality, the problem is not merely that of middlemen. The fundamental problem is that permanent government work is being separated from permanent employment. An employee may perform the same work for years in the same government office, yet remain deprived of the rights available to a regular employee. The government may change, the agency may change and the contract may change, but the insecurity of the worker remains unchanged.
The Employment-Social Rights Campaign in Uttar Pradesh has consistently demanded that the millions of vacant regular posts in government departments be filled immediately, that new posts be created according to population and actual requirements, that long-pending recruitment processes be completed transparently, and that the contract and outsourcing systems be abolished for work of a permanent nature.
If the Outsourcing Services Corporation succeeds in ensuring timely payment of wages, EPF and ESI, grievance redressal and accountability of agencies, it may certainly help resolve some immediate problems. But it cannot be described as a solution to the permanent employment crisis.
Permanent employees for government work, permanent posts for permanent work, and equal pay for equal work—this is the real solution.
If the Outsourcing Services Corporation remains limited to merely organizing and regulating contract agencies, then instead of resolving the problems of outsourced workers, it will become a process of institutionalizing outsourcing and providing a legal cover to an otherwise unlawful system.
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Dinkar Kapoor, State General Secretary, All India Peoples Front, Uttar Pradesh