Government Plans To Roll Out Social Security Benefits For Gig Workers: Report

Ahead of the general elections in India next year, the Modi government is reportedly planning to introduce welfare measures for gig workers employed through platforms such as Amazon, Uber, and Zomato.

The plan is part of the Social Security Code enacted in 2020, may include accident, health insurance, and retirement benefits, Reuters reported citing a senior government official with direct knowledge of the matter.

With the elections approaching early next year, the government is reportedly keen to announce these steps. This comes after the opposition Congress party-led state of Rajasthan approved the establishment of a fund through a surcharge on sales made on these platforms.

"There is an urgency to announce relief measures for gig workers," a government official was quoted as saying by Reuters.

The officials have been holding meetings with trade unions, gig platforms, and state officials to discuss this matter.

India's gig workers, who operate outside of traditional employer-employee relationships, are quickly becoming a significant part of the world's fifth-largest economy. The gig economy has experienced a surge during the COVID-19 restrictions.

Earlier this week, Labour Minister Bhupender Yadav informed lawmakers that any scheme for gig workers may be financed through contributions from the central and state governments, as well as the platforms themselves.

According to an industry expert familiar with the discussions, the platforms unanimously agreed with the labour ministry's proposal for providing social security to gig workers and were ready to contribute to a welfare fund that is run transparently.

The impact of these measures would extend beyond big-name companies like Amazon, Uber, and Zomato.

Many other online platforms and the individuals they employ for various services, such as cab-sharing, retail, food, construction, and finance, would also be affected.

There are no official figures available for the size of India's gig economy, but private estimates suggest that it employs around 10 million to 15 million people.

According to a forecast by The Boston Consulting Group in 2021, the gig economy has the potential to create 90 million jobs and generate annual transaction volumes exceeding $250 billion.

According to the government think tank NITI Aayog, the gig economy could employ over 23.5 million people, accounting for approximately 7 per cent of the non-farm workforce, by the year 2030.

According to an official cited in the Reuters report, the government could initially provide gig workers with state-funded medical and accident insurance, as well as a mechanism to address their complaints.

Additionally, there could be a system put in place for employers to contribute to a fund for gig workers.

Employers will be required to contribute a percentage of their annual revenues, ranging from 1 per cent to 2 per cent, to a security fund.

The contribution will reportedly be capped at 5 per cent of the amount paid to workers.