Increasingly, in India, the gig workforce economy has grown rapidly and offered millions of jobs. But even as it has done that, this growth has thrust before it huge issues about social security for most workers. Gearing up to the call for a safety net, the Union Ministry of Labour and Employment is drafting a national law that would bring in gig workers under social security schemes. On its part, new definitions of gig workers are being decided by the government to better fit into the present employment landscape.
| GS Paper | GS Paper III |
| Topics for UPSC Prelims | Gig workers, Gig economy, NITI Aayog Report on India’s Gig and Platform Economy (2022), e-Shram Portal, Pradhan Mantri Shram Yogi Maandhan (PMSYM) |
| Topics for UPSC Mains | Opportunities for Gig Workers Evolving in India, Challenges Faced by Gig Workers in India, Steps to Empower the Gig Workers in India |
Origin of the Article
This editorial is based on “Ensuring a proper social safety net for the gig worker,” published in The Hindu on October 15, 2024. It discusses the social security challenges faced by gig workers in India and suggests labor law changes to improve their integration into safety nets.
Relevance for UPSC Aspirants
For UPSC aspirants, the gig economy is a must-know. It encompasses employment and inclusive growth and policies of the government in the syllabus of UPSC. Understanding this domain can help answer questions related to economic development and social justice in both prelims and main exams.
Why in News?
This is relevant to UPSC aspirants, considering the rapid expansion of the gig economy as well as the Union Ministry that launched the process of drafting a law incorporating the gig workers into the social security schemes. Once more, the policy issue is concerned with this development in resonance with some of the earlier questions in UPSC related to employment and the informal sector, again stressing the significance of understanding changing labor dynamics and policy interventions.
Understanding Gig Workers
Workers in gig industries are temporary or freelancers rather than regular employees in long-term, stable jobs. They form an integral part of the gig economy sustained by temporary engagements or freelancing. It has been important for an understand of gig workers that the NITI Aayog Report 2022 further categorized them and emphasized the importance of gig workers in the changing economic scenario of India.
What are Gig Workers?
The gig workers are individuals who engage in job work and, more specifically, include individuals in the gig economy jobs. Traditional employment provides long-term contracts; however, in the case of gig work, it offers short-term contracts and flexibility. These features comprise temporal roles and flexible jobs and offer people the freedom to do different things without being strictly committed to doing it all in the long term. This makes it endow its users with a unique work-life balance.
Classification by NITI Aayog Report 2022
As per the report from NITI Aayog 2022, gig workers have been divided into two broad classes, – platform workers and non-platform workers. Platform workers utilize online platforms such as Uber to enable a match for their jobs; non-platform workers come from sectors such as construction, with no need for technological resources to match for the jobs. This classification helps in gaining insight into the diversified nature of gig work and its implications on the Indian economy.
India’s Gig Economy Landscape
India is placed at the fifth position in the global gig economy. The report puts the country to figure third by 2030. The number, therefore, captures the increased participation of the country in the gig economy, and flexible modes of work. The growth prospects of the gig economy indicate its significant contribution to the employment sector and in upgrading the Indian economy.
Opportunities for Gig Workers in India
India’s gig economy is changing very rapidly. In nearly every segment, there are ample opportunities. With growing markets and increased demand, many jobs open up for the gig economy. This in turn increases the aggregate fortune of its workforce while granting access to varied skill sets.
Market Growth and Employment Potential
The gig economy in India has currently been pegged at USD 20 billion, with an annual growth rate pegged at 17% until 2027. As per a report by the NITI Aayog, the workforce would grow to 23.5 million by 2029-30, thereby forming a substantial percentage of the non-agricultural workforce. This also opens doors for potential employment opportunities in the gig sector.
Diverse Opportunities Across Sectors
Companies such as Uber, Ola, and Zomato are expanding gig workers’ services and also providing jobs for all. Zomato in 2023 processed 647 million orders, which clearly shows how its customer base is growing. Services such as Upwork and Freelancer allow professionals to provide their services to any part of the world, and this also contributes to increased freelance workforces.
Flexible Work Arrangements
The flexibility of gig economy arrangements in terms of time and location of work appeals particularly to millennials and Gen Z as offering a wide variety of autonomy and work-life balance on the job. Gigs are attractive in this regard because they allow individuals to flex jobs according to individual preference, which improves job satisfaction and productivity.
Technological Advancement and Start-up Culture
This is because the opportunity to take a gig has been made very easy through digital platforms and mobile apps. The Indian start-up ecosystem is booming, with many choosing to hire freelancers to outsource non-core activities as that would reduce their fixed costs. Technology and gig work combine to make an ideal mix for innovation and growth.
Challenges Faced by Gig Workers in India
Gigs in India are characterized by several dilemmas that pertain to employment relations, social security, and income insecurity for gig workers. These problems arise through the informal nature of gig work, leaving workers stripped of some essential protections and benefits, necessitating extensive policy interventions to counter the concerns.
Ambiguous Employment Relations in Gig Work
Gig workers are often classified as informal workers or independent contractors, lacking formal employment relationships. This categorization results in a lack of social security benefits. For instance, Swiggy delivery workers have staged strikes demanding better conditions, illustrating the challenges faced in securing fair treatment and benefits.
Institutional Social Security vs. Social Security Schemes
There are a great many schemes available for gig workers, yet institutional social security for them is way behind. “Some entitlements are there -like the informal social security schemes- but these often have incomplete protection against leave with pay, maternity benefits, among others, which of course calls for far-reaching social security approaches for gig workers.”.
Absence of Minimum Wage and Occupational Safety
Due to lack of inclusion in minimum wage laws and occupational safety and health regulations, gig workers are exposed to exploitation. Their jobs require physically demanding work that often risks their health. In addition, they do not fall under the coverage of the Industrial Relations Code 2020, which has a bearing on issues regarding the pursuit of legally addressing controversies and safety concerns.
Precarious Employment and Income Insecurity
Gig workers face earnings instability and job insecurity, making it one of the impracticalities that have a dire impact on income stability. Two of the essentials lacking in Fairwork India Ratings 2024 are commitment to providing living wages and recognition of workers’ rights. Income instability over time has made long-term planning in terms of finance unmanageable for gig workers.
Exploitation and Unfair Treatment
Workers in the gig economy are as vulnerable as everyone else to exploitation and unfair treatment due to their power imbalances and lack of legal protection. For example, workers may be asked to fulfill extremely high targets without a chance to bargain over better pay or working conditions. This shows that there is a need for legislation to protect gig labor from exploitation.
Lack of Collective Bargaining Power
Since gig workers cannot usually bargain collectively, it becomes very difficult to advocate for their rights. With alienation from unionizing efforts, their negotiating power is almost minimal. This has highlighted the need for forums for dialogue and rights advocacy for gig workers.
Government Initiatives to Protect Gig Workers
Other initiatives have been incorporated to protect gig workers, which mainly focus on the social security measures to be provided in terms of the legal framework for the gig worker. These have come out as significant factors to provide gig workers with a standard status and benefits and ensure their welfare in an economy that increasingly becoming gig-based.
Code on Social Security, 2020
The Code on Social Security, 2020 categorizes gig workers as a separate category and aims at extending social security benefits to such workers too. States have not completed the process of implementation and have been doing so based on finalized details; there is a need for states to act with alacrity and extend much-needed protections to gig workers.
NITI Aayog Report on India’s Gig and Platform Economy (2022)
The NITI Aayog report recommends that platform-led skilling initiatives and social security measures be extended to gig workers. The focus it has on the collection and enumeration of data to better understand this group of workers marks the need for a comprehensive strategy in India for gig workers.
E-Shram Portal
This is one type of national database for unorganized sector workers, including gig workers. Registration on this platform facilitates access to social security benefits, which might become important to bring regular gig workers more formidably into the nation’s labor framework to improve their welfare.
Pradhan Mantri Schemes
The schemes like Pradhan Mantri Shram Yogi Maandhan (PMSYM) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) provide social security to gig workers with pension and life insurance cover. This implies the governmental intent in enhancing the welfare of gig workers in India.
Empowering Gig Workers in India
Hence, empowering gig workers would require a reconsideration of employment relationships and an improvement in the rights of the workers. By addressing the existing problems and inculcating supportive measures, India can lay down the foundation stones for making a more balanced environment for its gig workers now being integrated into the formal economy; they are also being guarded further.
Defining Aggregators as Employers
This is where the recognition of aggregators as employers by law can play a pivotal role in safeguarding the interests of gig workers. Definitions of the employment relationship and requiring aggregators to contribute to social security funds require statutory regulation. In this case, the UK Supreme Court ruling on Uber sets a precedent for doing so, which calls for similar provisions in India.
Registration of Gig Workers
They must register gig workers on the e-Shram portal, which will help ensure access to insurance benefits and notice before termination. It formalizes the status of a gig worker, providing a structure for rights and protections within the labor market.
Establishment of Tripartite Governance Structure
To start with, the governance structure can be tripartite and includes government, platforms, and workers’ representation to facilitate dialogue and collective bargaining. An industry-wide standard and guidelines regarding fair working conditions and effective mechanisms for the redress of grievances would surely be available.
Fair Pay and Algorithmic Transparency
Fair pay and transparency with algorithmic processes are very important to the gig worker. Rather than focusing on inequality in pay structures or how the schemes for settlement of disputes over pay will be done transparently, such systems should be put in place by the platforms.
Gig Worker Data Portability
This implies that data portability enables gig workers to carry their work history and skills across multiple platforms, thus improving mobility and reducing dependency. Ensuring data security in transfers is crucial to protect workers’ information, while the gig economy provides flexibility and opportunities.
Skill Development and Upskilling Initiatives
Skilling and reskilling are very necessary empowerment factors for gig workers. Partnerships with vocational training institutes as well as government programs would open opportunities for the career progression of the workers and their transition to roles or industries that can pay better or lead them to entrepreneurial pursuits.
PESTEL Analysis
| Political: The government is redefining gig worker classifications to integrate them into social security schemes. New legislation like the Code on Social Security 2020 aim to provide gig workers with necessary protections. Economic: Valued at around USD 20 billion with expected growth of 17% annually until 2027, India’s gig economy offers significant economic opportunities yet poses challenges in income stability due to its informal nature. Social: With an anticipated growth to 23.5 million by 2030, the gig workforce represents a societal shift towards non-traditional employment models, appealing to younger generations seeking flexibility but lacking in job security and formal benefits. Technological: The expansion of digital platforms facilitates the gig economy, enabling workers to access both global and local opportunities. Technological advancements must address data privacy and job security concerns. Environmental: The gig economy impacts the environment through increased transportation needs, although remote work opportunities offered by gig jobs can reduce commuting and lower carbon footprints. Legal: Existing labor laws often do not protect gig workers, who lack minimum wage guarantees and occupational safety measures. Legal reforms are essential to provide a structured framework for gig workers’ rights and protections. |
Conclusion
Conclusion India’s gig economy has much of ups and downs. As gig work is becoming a part of our economic mainstream, it is time to set up a system that harmonizes innovation and workers’ protection. A collaborative dialogue among all stakeholders—the government, business, and workers—is the first step for policies that can empower gig workers to thrive safely with dignity in this paradigm shift.
| UPSC Civil Services Examination, Previous Year Questions (PYQs) Mains Q. The ‘Gig Economy’ is beneficial for companies and workers alike, but it poses challenges for social security and worker rights. Discuss (UPSC Mains 2022, GS Paper II) Q. Discuss the key findings of NITI Aayog’s 2022 report on India’s Gig and Platform Economy. What are the opportunities and challenges for gig workers in the Indian economy, particularly with respect to social security? |
