Balancing act: India needs a practical framework for gig workforce

The gig economy is likely to become a major job creator in the foreseeable future. A study by the V V Giri National Labour Institute (VVGNLI), which is affiliated to the Union labour ministry, has estimated that by 2047, the gig and platform workforce will grow to 61 million, accounting for 15 per cent of India’s non-agricultural workforce. The study is based on estimates in a 2022 report by the NITI Aayog, which had projected that the number of gig workers would touch 23 million by 2030, and would comprise 7 per cent of the non-agricultural workforce as against 3 million in 2020. In fact, the VVGNLI study suggests that under certain factors — rapid technological advancement, and regulatory or policy changes — the sector is capable of delivering 90.8 million jobs in the next 22 years. From one perspective, these numbers are worth celebrating in a country where, in the absence of robust private-sector investment in manufacturing, India’s innovative information-technology (IT) sector has stepped up to create categories of new jobs. From marketplace delivery to ride-sharing, food delivery to super-speed grocery delivery, the range of app- and platform-based jobs has undoubtedly offered India’s semi-skilled youth livelihood opportunities that leavened the Covid-induced economic disruption.

 

The key issue here, however, is the quality of jobs and gig workers’ access to welfare. In a labour landscape riddled with a shortage of good-quality jobs — ie those that come with benefits — gig workers are not to be envied. In India, workers affiliated to platform-based apps fall between employees and contract workers. This puts them outside the purview of benefits such as health insurance, paid leave, or long-term savings (such as provident fund). They are worse off than even unorganised-sector workers, who potentially have access to some measure of government social-security schemes under the Unorganised Workers’ Social Security Act. Surveys since 2020 have consistently highlighted the precarious working conditions of gig workers — including the fact that almost one in seven earns less than the minimum wage. While the Industrial Relations Code, 2020, addresses some welfare issues, it has not been implemented. The informal relationship with workers offers promoters of platform services the opportunity to optimise costs and cash in on strong demand for their offers to garner decent valuations in the funding market.

 

With more and more work being delivered by the gig economy, the dilemma facing governments lies in ensuring sustained welfare delivery to this cohort without deterring the expansion and innovation of the vibrant IT platform-based industry. India, thus, needs to evolve a framework consistent with evolving realities in dealing with labour-related issues. Too much regulation can kill opportunities. The fragmentation of the textile sector from large integrated mills to unorganised small powerlooms is a case in point. Unable to cope with the rising demands of powerful politically-backed labour unions, many large mills closed down, with the result that India lost the critical advantage of scale in global markets just as China started setting up its mammoth garment factories. Similarly draconian laws governing retrenchment in factories with more than 100 workers deterred big manufacturing for decades; the relaxation of the ceiling to 300 workers is still to gain traction in the states. How imaginatively federal and state administrations balance the dynamics of worker rights and the booming potential of the ITes business will determine India’s future socioeconomic fabric.