India’s Booming Gig Economy

News Highlights

NITI Aayog’s Study revealed that India’s Gig Economy workforce to reach 2.35 crore by 2030

Key Takeaways of the Study

• Need of Social Security
  • India requires a framework that balances the flexibility offered by platforms while also ensuring social security of workers. 
• Classification of Gig Workers
  • The report broadly classified gig workers  into platform and non platform based workers. 
    • While platform workers are those whose work is based on online software applications or digital platforms such as food aggregator platforms Zomato, Swiggy, Ola and others 
    • Non-platform gig workers are generally casual wage workers and own­ account workers in the conventional sectors, working part time or full time.
• New Classification of Labour Force
  • The consequent platformization of work, gave rise to a new classification of labour, “platform labour”, falling outside the purview of the traditional dichotomy of formal and informal labour.”

• Rising challenges of the Sector
  • Lack of job security, irregularity of wages and uncertain employment status for workers. 
  • Additionally, the contractual relationship between the platform owner and worker is characterised as other than one of employment. 
    • Platform workers are termed as “independent contractors”. 
    • As a result, platform workers cannot access many of the workplace protections and entitlements.
• More medium-skilled jobs
  • The report noted that at present
    1. About 47% of gig work is in medium­ skilled jobs,
    2. About 22% in high skilled
    3. About 31% in low skilled jobs, and the trend shows
  • The concentration of workers in medium­ skilled jobs is declining and that of the low skilled and high skilled is increasing.  
• Booming Gig Economy
  • By 2029­-30, gig workers are expected to form 6.7% of the non agricultural workforce or 4.1% of the total livelihood workforce in India
• Recommendation by NITI Aayog
  • NITI Aayog has recommended steps to provide social security, including paid leave, occupational disease and accident insurance, support during irregularity of work and pension plans for the country’s gig workforce
  • The think tank has also recommended introducing a ‘Platform India initiative’ on the lines of the ‘Startup India initiative’.

What is a Gig Economy?

• A Gig economy is a free market system in which temporary positions are common and organisations hire independent workers for short-term commitments

Gig economy in India

• According to a report by ASSOCHAM (Associated Chambers of Commerce and Industry in India), the size of the gig sector in India is expected to increase to $455 billion by 2024.
• India has emerged as the 5th largest country for flexi-staffing after the US, China, Brazil and Japan. 
• Almost one out of four gig workers worldwide are in India
•  India is adopting the gig economy due to the expanding supply of freelancers and cheap low-skilled labour. 

Classification of Gig Economy

• Gig workers can be broadly classified into platform and non-platform-based workers. 
• Non-platform gig workers
  • Are generally casual wage workers and own-account workers in the conventional sectors, working part-time or full time. 
• Platform workers
  • Are whose work is based on online software apps or digital platforms. 
  • Location-based platforms allow in-person work at specific locations, such as delivery or driving while web-based platforms enable workers to perform online tasks for clients around the world
  • Examples: Amazon, Uber and Ola

Labour Code for the Gig Economy

• Code on Wages 2019
  • In both organised and unorganised sectors, including gig workers, the Code on Wages2019 specifies a consistent minimum rate and floor wage.
• Code on social Security, 2020
  • In the Code on Social Security, 2020, gig workers are recognised as a new occupational category.
  • A gig worker is someone who performs labour or engages in work arrangements outside of the traditional employer-employee relationship and receives money for doing so.

Challenges faced by Gig Workers

• Remaining financially viable without a predictable salary.
• Low payment and Wages: According to gig workers in India, the low payment often pushes them to work longer than 8 hours and work on all days of the week.
• Crafting a clear work identity without the roles and communities that anchor identities in organisations.
• No employment stability and heavy workload
• Lack of Accessibility: The opportunities under gig economy is not accessible to some people who used to live in rural area where internet connectivity is poor
• Maintaining work relationships without a clear and stable set of regular colleagues.
• Lack of Grievance Redressal Mechanism (GRM): There is no proper GRM available to gig workers to solve their genuine problems.

Way Forward

The gig workforce model has evolved from its initial use for situational augmentation to a prominent capacity and capability development model that will emerge as a key component of the future bended workforce model.

Although still in its infant stage, favourable government policies to support India’s knowledge economy will accelerate gig models, resulting in a larger talent pool and job creation.

Content Source: The Hindu