IMPOSING TAXES ON INNOVATION RISKS GOLDEN GOOSE AND THE GIG

The swift expansion of India's gig economy represents a double-edged sword for millions of workers thronging a vulnerable yet opportunity-opening space.

- PRANJAL SHARMA

This expansion starkly contrasts with the Prime Minister's vision of fostering employment generation, as GST authorities appear to undermine innovative models that create jobs without offering any government support or incentives.

According to a NASSCOM-Aon report, the country's gig workforce is projected to soar from 7 million in 2021 to 23.5 million by 2030, increasing its share of the total workforce from 1.5 per cent to 4.1 per cent.

Technology startups and IT firms are fueling this growth, with IT gig workers accounting for 30 per cent of the sector, as per job portal foundit.com.

Platforms leveraging SaaS (Software/Subscription as a Service) solutions have been pivotal in this transformation.

These apps have disrupted retail, professional services, home services, and ride-hailing transportation, contributing to the ease of living of the citizens at large and creating 350 million gig jobs projected by 2025.

These platforms provide gig workers unprecedented access to income opportunities and flexibility while fostering innovation within the broader economy.

GRIM REALITY

While innovation thrives, the burden of dual taxation and rigid, standardised tax frameworks poses serious challenges.

Consider ride-hailing companies, for instance—they have revolutionised urban mobility with their innovative models, responding swiftly to shifting consumer needs.

Yet, these same innovations are stifled by tax policies that fail to accommodate the dynamic nature of the gig economy.

Recently, subscription-based services have emerged, where drivers pay a fixed fee for lead generation while passengers and drivers settle fares independently.

This model enhances driver earnings and eliminates surge pricing concerns.

At the same time, it alleviates long-standing driver community complaints of exploitation and missing earnings.