- The gig economy in India is expanding rapidly, driven by digital platforms like ride-hailing, food delivery, and e-commerce logistics.
- Karnataka, with around 4 lakh gig workers, has become the first state to pass a comprehensive law for gig worker social security.
- Bill Name: Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2025
- Objective: Protect gig worker rights, establish welfare mechanisms, and regulate platform aggregators
Relevance : GS 2(Social Issues , Labour Laws)
Key Financial Provisions
- Welfare Fee Structure: 1-5% levy on worker payouts per transaction, varying by aggregator category
- Funding Sources: Worker contributions, state government grants, central government aid
- Current Worker Economics: Many earn only ₹1,800 working 16-hour days, highlighting income vulnerability
Institutional Structure
- Welfare Board: New entity to oversee worker registration and welfare scheme implementation
- Registration System: Mandatory enrollment for both workers and platform aggregators
- Dispute Resolution: Formal mechanisms to address worker-platform conflicts
- Fund Management: Dedicated Gig Worker’s Social Security and Welfare Fund
Market Context & Scale
- National Projection: NITI Aayog estimates 23.5 million gig workers by 2029-30
- State Numbers: Currently 400,000 gig workers in Karnataka
- Registration Gap: Only 10,500 workers registered so far, indicating massive underenrollment
- Growth Trend: Rising gig economy participation in urban and semi-urban areas
Worker Welfare Focus Areas
- Health Concerns: Addresses pollution exposure and physical strain from two-wheeler usage
- Income Security: Aims to provide financial stability for irregular earnings
- Working Conditions: Establishes standards for reasonable work environments
- Social Security: Creates safety net for workers lacking traditional employment benefits
Platform Obligations
- Mandatory Registration: All aggregator platforms must register with authorities
- Fee Compliance: Must collect and remit welfare fees on worker transactions
- Worker Support: Share responsibility for ensuring welfare scheme participation
- Regulatory Compliance: Adhere to new labor standards and reporting requirements
Implementation Challenges
- Enforcement Mechanisms: Need robust systems to ensure platform compliance
- Worker Awareness: Massive outreach required given low current registration rates
- Fee Collection: Monitoring transaction-based contributions across multiple platforms
- Interstate Coordination: Managing workers operating across state boundaries
Broader Implications
- Policy Precedent: Karnataka becomes early adopter of comprehensive gig worker legislation
- Economic Impact: May influence platform business models and pricing structures
- Worker Rights: Significant step toward formalizing India’s growing informal economy
- Regulatory Model: Could serve as template for other states facing similar challenges
