A report by NITI Aayog indicates the growing importance of gig workers and how they need to be protected through labour laws
BY KUMUD DAS
The needs of India’s ever-growing population of gig workers must be addressed, says a just-released report by NITI Aayog. The report highlights the exponential growth prospects of the gig economy. However, it has also raised concerns about the need to create a social security umbrella for this workforce. Gig workers are basically those who act as platform workers, working outside the traditional ‘employer-employee’ arrangement.
The gig and platform economy’s current workforce of about 77 lakh is expected to rise to 2.35 crore by the end of the decade, forming 6.7 percent of the non-agricultural workforce by then, from 2.6 percent at present. The report says 27 lakh workers are employed in retail trade and sales, 13 lakh in the transportation sector, and 12 lakh spread across manufacturing, finance and insurance activities. They will constitute 4.1 percent of the total workforce in India.
The Ministry of Labour and Employment has brought gig workers under the ambit of the new labour codes. Once notified, gig workers will be able to avail of various social security benefits. The report observes that currently more than 75 percent of companies have a less than 10 percent gig worker headcount but this proportion is bound to rise, with MNCs turning to flexible hiring options.
Welcoming the NITI Aayog report, Shaik Salauddin, general secretary of the Indian Federation of App-based Transport Workers (IFAT), was quoted as saying that it is good that NITI Aayog has addressed the issue of some important social security measures such as paid sick leave, healthcare access, insurance, and the like. However, it has not provided any mechanism or solutions for implementing schemes for such measures.
The flip side is that gig workers don’t have pension and insurance cover. The platform worker is placed at the unique intersection of formal and informal classification. The Social Security Code (SS Code) has spoken about providing certain benefits such as accident insurance for those registered under the Aadhaar-seeded e-shram portal. There is much that remains to be done. The report cites international precedents to suggest a protective framework—such as pension and leave on the lines of the UK and the US. The problem is that, unlike in those countries where gig workers are treated as employees, the situation is different in India in the absence of a proper legal framework.
Kumar Shekhar, VP-Member Operations, Tide (IN), a UK-based fintech company that launched its operations in India in 2020, talks about the implications of financial inclusion and ease of doing business in the next phase of growth for gig and platform workers. He says, “Gig workers have become an integral part of our economy, they have been instrumental in keeping several businesses operating, especially during the pandemic.”
Gig workers spell empowerment and independence, and NITI Aayog’s proposal to put financial services at the heart of the gig economy will help. Moreover, implementing ease of doing business, by having a single-window system or a one-stop digital platform, will not just help gig workers/entrepreneurs obtain all business-related pre-operational regulatory approvals and complete formalities without much hassle, it will also accelerate their growth in India, he said.
Two in 10 gig workers are primary earners who support their families and choose gig work as a means of core livelihood, whereas four in 10 are ambitious financial planners who co-earn with other family members and view gig work as a temporary transition to a better opportunity. The rest are dependants with no-to-low obligations who earn extra cash through gig work.
The growth in numbers of this segment of workers has spawned corresponding interest in them. A report by KarmaLife, a financial solutions provider for gig and blue-collar workers, and LEAD at Krea University was undertaken to throw light on the day-to-day work and financial lives
of gig workers.
According to a finding by the International Labour Organization (ILO), digital gig platforms powered by venture capitalist funding have grown exponentially from 142 in 2010 to 777 in 2020. While some qualified professionals may choose to work freelance and are counted as part of the gig economy, there’s a common perception that many gigs are run by people who may not have had the chance to acquire formal higher education degrees. Then there are the few who opt for gig work for a second income.
The demographic is also predominantly male, with delivery and driving being the most common examples. But the study finds that even across such tasks, and especially in developing countries, about a quarter of the workers have higher-education qualifications. So, is a lack of good job prospects pushing people towards gigs, and what does that mean for their income and job safety? In other words, can gigs become
careers and transform the future of work?
According to ILO’s data, the gig platform was the main source of income for about 84 percent of app-based taxi workers, 90 percent of delivery workers, and about 33 percent of those working on various online web platforms.
The NITI Aayog report says that fiscal incentives such as tax-breaks or start-up grants may be provided for businesses that provide livelihood opportunities where women constitute a substantial portion of the workers. Likewise, a platform with high accessibility or a high degree of participation of PwDs (Person with Disability) too may be rewarded with fiscal incentives.
Apart from incentivising platforms that focus on recruiting women workers, who currently comprise a small part of the gig worker community, the report recommended that businesses have a higher share of women managers and supervisors in the organisation to ensure that communication to workers does not perpetuate gender stereotypes.
The report also recommended firms adopt policies that offer old age or retirement plans and benefits, and other insurance cover for contingencies such as injury arising from work that may lead to loss of employment and income. Such plans and policies may be uniquely designed by a firm, in partnership with insurance companies, or could be designed and offered in collaboration with the government, as envisaged under the Social Security Code, 2020. Besides, a social security cover out of a corpus fund can also help gig workers in case of contingencies.
The NITI Aayog report also suggested that social security benefits be extended to workers in partnership mode, as envisaged in the social security Code. It also said businesses should consider providing income support to workers as it would be a “critical step in providing assured minimum earnings and social security from income loss in the wake of uncertainty or irregularity in work”. It also recommended offering paid sick leave to workers apart from insurance cover.
The report claims to offer “perspectives and recommendations on the future of work”. It serves as a handy guide to this growing segment of the labour force while including some valuable recommendations, which need to be more widely discussed. There is no question that at least some coherent thinking needs to be applied to gig work in India.
(The writer is a Mumbai-based senior business journalist.)
