The Challenges and Growth of India's Gig Economy: Current Landscape and Future Recommendations
- M.R Mishra
- Jun 17, 2024
- 2 min read
Recently, gig workers have reported incidents of heat stroke and fainting, with no health-related support from the companies they work for.
The gig economy, also known as the freelance or on-demand economy, is characterized by temporary, flexible jobs and is becoming increasingly significant in India. It is driven by companies that prefer hiring short-term contractors, consultants, and freelancers instead of full-time employees.
Every day, at least one of my colleagues has been fainting. The company management did nothing when we raised the concern. Neither they ensured our medical checkup nor gave us health supplements,” said Mr. Kumar,
adding that they were denied higher surge charges too despite working in such difficult conditions.
This sector involves individual workers performing tasks for clients through platforms on a task-by-task basis, fueled by the widespread adoption of smartphones, digital technologies, and the country's demographic dividend. Gig work can be broadly classified into platform-based and non-platform-based work.
Platform workers are those who use online software apps or digital platforms for their jobs.
Providing social security to gig workers is a complex issue with ongoing discussions and various approaches being explored. Here's a breakdown of some potential solutions:
Government Initiatives:
New Legislation: Some countries are enacting new legislation, like India's Code on Social Security, 2020, that defines gig workers and mandates platform contributions to social security funds. However, implementation details often lag.
Expanding Existing Programs: Existing social security programs for traditional workers could be broadened to encompass gig workers. This might require adjustments in contribution structures and eligibility criteria.
Shared Responsibility:
Contributions from Platforms and Workers: Both platforms and gig workers could contribute to a social security fund. This shared model distributes the financial burden but requires clear contribution rates and collection mechanisms.
Individual Options:
Voluntary Schemes: Governments might offer voluntary social security schemes tailored for gig workers. These would allow workers to choose their level of coverage but might have participation challenges.
Portable Benefits: Portable benefit plans where workers can take their accrued benefits across different platforms could be explored. This would require industry-wide cooperation and standardized plans.
Challenges to Consider:
Income Fluctuations: Gig workers often have fluctuating incomes, making fixed contribution calculations difficult. Flexible contribution models might be needed.
Platform Cooperation: The cooperation of gig economy platforms is essential for effective implementation of any social security plan.
Existing Examples:
India: The Employees' State Insurance Scheme (ESIS) in India covers some categories of gig workers, providing medical and other benefits.
Atal Pension Yojana (APY): This voluntary pension scheme in India allows gig workers to contribute towards retirement security.
The future of social security for gig workers likely involves a combination of these approaches, tailored to specific contexts. Stay tuned for further developments in this evolving landscape.
Growth of the Gig Economy
According to a NITI Aayog report, an estimated 7.7 million workers were engaged in the gig economy in 2020-21, constituting 2.6% of the non-agricultural workforce and 1.5% of the total workforce in India. These workers span various skill levels, with approximately 47% in medium-skilled jobs, 22% in high-skilled jobs, and 31% in low-skilled jobs. The gig economy is projected to expand to 23.5 million workers by 2029-30, at which point gig workers are expected to make up 6.7% of the non-agricultural workforce and 4.1% of the total workforce in India.
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