NITI Aayog recommends social security measures for gig workers

NITI Aayog has recommended the government and the companies operating through the gig economy to put in place  social security policies for gig or platform workers including steps for paid sick leaves, insurance and pension plans. 

The report estimates that in 2020–21, 7.7 million workers were engaged in the gig economy, 1.5% of the total workforce in India. The gig workforce is expected to expand to 23.5 million workers by 2029–30 and are expected to form 4.1% of the total livelihood in India by 2029–30. According to the report, at present about 47% of the gig work is in medium skilled jobs, about 22% in high skilled, and about 31% in low skilled jobs.  

Trend shows the concentration of workers in medium skills is gradually declining and that of the low skilled and high skilled is increasing, said the NITI Aayog’s report. 

In its report titled ‘India’s Booming Gig and Platform Economy’ released on Monday, the policy think tank noted that the “platformisation” of work has given rise to a new classification of labour — platform labour — falling outside of the purview of the traditional dichotomy of formal and informal labour.  

Apart from impetus through digitalisation, operating outside the traditional “employer-employee” relationship enables platforms to scale within and across geographies as well as sectors. “Policies designed by platform firms and governments need to keep in mind specific characteristics of workers in these sectors.” said the report. 

“India requires a framework that balances the flexibility offered by platforms while also ensuring social security of workers,” it said. 

The NITI Aayog’s report said that adoption of measures for paid sick leave, health access and insurance for all the workers will have positive implications for offering a social security cover to platform workers engaged by these firms. 

Citing international regulations for gig and platform workers, it said that in the UK, the Supreme Court ruling in February 2021 led to the reclassification of Uber’s driver-partners in the country as “workers”. New benefits under this reclassification included a minimum wage, paid holiday time, a pension plan (paid into by both Uber and the worker), continuation of old-age benefits introduced since 2018 such as free insurance in case of sickness or injury as well as parental payments and platform company’s support for drivers switching to an electric vehicle. 

On similar lines, it suggested gig firms to 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 Code on Social Security, 2020.” 

The report has also suggested creation of corpus fund to support the workers whenever required. Measures such as offering a social security cover out of a corpus fund can help support gig and platform workers and other self-employed individuals associated with the gig and platform sector in case of contingencies, it noted. 

Further, the report recommended platforms to support small businesses and entrepreneurs associated with them.  

It also suggested support to workers in a “situation of irregularity of work”. Citing an example of New York City, the report said that during the first Covid wave in 2020 the drivers who were licensed with the Taxi & Limousine Commission, were given delivery work that came with a minimum wage guarantee. On similar lines, such an initiative may be incorporated by gig and platform firms to provide income support to workers.  

“This will be a critical step in providing assured minimum earnings and social security from income loss in the wake of uncertainty or irregularity in work.” 

To harness the potential of the gig-platform sector, the report recommends accelerating access to finance through products specifically designed for platform workers, linking self-employed individuals engaged in the business of selling regional and rural cuisine, street food, among others, with platforms to enable them to sell their produce to wider markets in towns and cities.  

It also recommendations undertaking a separate enumeration exercise to estimate the size of the gig and platform workforce and collecting information during official enumerations (Periodic Labour Force Survey) to identify gig workers.