- Intro – define gig economy & its categories.
- Mention the current state of India’s gig economy.
- Point out the disadvantages.
- Chart out the NITI Aayog recommendations.
Gig Economy is an economic model wherein the firms hire workers on a part-time flexible basis rather than as full time employees. The Code on Social Security, 2020 defines gig workers as those engaged in livelihoods outside traditional employer-employee relationship. The workers work as freelancers or independent contractors. They generally have flexible and adaptable working hours based on individual preferences.
Gig Workers can be broadly classified into two categories — platform and non-platform–based workers. (a) Platform workers are those whose work on online software apps or digital platforms. (b) Non-platform gig workers are generally casual wage workers and own-account workers in the conventional sectors, working part-time or full time.
State of India’s Gig Economy: According to NITI Aayog Report, India’s gig workforce currently stands at 77 lakh (2020-21). It is expected to rise to 2.35 crore by 2029-30. By then, they will form 4.1% of India’s total workforce.
Currently 27 lakh gig workers (35% of gig workers) are engaged in retail trade and sale, while 13 lakh (17%) are engaged in transportation sector. There are 6 lakh workers (8%) in manufacturing and another 6 lakh (8%) in finance and insurance. Another estimate indicates that by 2024, more than 75% of the services industry will be staffed by gig workers. According to ASSOCHAM report, the gig sector has the potential to grow to US$ 455 billion by 2024.
Disadvantages of Gig Economy :
- Most gig workers work on daily basis, and can be terminated from their jobs without any notice. Many gig workers were laid off during the pandemic.
- Gig workers have no social security benefitslike ESI, PF or insurance. They have no paid leaves so failure to work means wage loss. There is no wage regulation and the workers are at the mercy of aggregators.
- Most workers have to put in long hours of work to make the job viable. A large component of workers’ wages consists of incentive which coerces workers to work for long hours. This reduces the advantage of ‘flexible work’ in gig economy. There is lack of transparency on incentive structures.
- Many aggregators/platforms are giving large discounts to users in order to capture larger market share. Companies sustain this by charging high commissions on gig workers.
- Platform workers have little or no voice. Technology has tilted the bargaining power strongly in favour of the companies.
NITI Aayog’s Recommendations:
The NITI Aayog Report, ‘India’s Booming Gig and Platform Economy’ has analysed the gig economy from gig workers’ perspective, making several recommendations.
- Accelerating Access to Finance: Access to institutional credit may be enhanced through financial products. FinTech and platform businesses may be leveraged to provide cash flow-based loans to workers.
- Skill Development for Workers: Platform-led models of skilling and job creation need to be promoted for the gig sector. Platforms can collaborate with the Ministry of Skill Development and Entrepreneurship, and the National Skill Development Corporation (NSDC) to nurture skilled workers and micro-entrepreneurship.
- Platformization: A Platform IndiaInitiative can be launched on the lines of Start-up India. The purpose would be to increase access to the platforms. This can be achieved by simplification and handholding, funding support and incentives, skill development, and social financial inclusion.
- Enhancing Social Inclusion: Gender Sensitisation and Accessibility Awareness Programmes for workers and their families should be undertaken. Platform businesses can undertake partnerships with Civil Society Organizations (CSOs) to enable different sections of workers to take up employment opportunities in the platform sector through skill development, access to finance and assets.
- Platform businesses can create a more enabling environment for women and PwD workers through changes in the work-design and workplace facilities.
- Extending Social Security: Platforms can offer paid leaves, and access to insurance along with pension and retirement benefits. This will help in providing assured minimum earnings and social security from income loss in the wake of uncertainty or irregularity in work.
- NITI Aayog has proposed RAISE Approachfor operationalizing the Code on Social Security (CoSS), 2020.
Gig Economy has the potential to create jobs for India’s large workforce, especially the low-skilled workers. The Government must take appropriate steps to support the expansion of gig economy and platforms. At the same time, the interests of the gig workers must be protected to provide them with just working conditions. Achieving this balance will need efforts from all stakeholders.