Gig worker social security: India should aim for a perfect balance

Gig workers would get an optimal mix of flexibility and protection if India's 2020 social-security code is implemented well

- SANJAY CHADHA

With the rising share of gig employment in India's labour market, the welfare of gig workers who make home deliveries for e-commerce platforms has been gaining political attention. The government recently announced its intention of using its e-Shram portal—an initiative aimed at creating a National Database of Unorganized Workers (NDUW)—to identify and extend the benefits of its social-security schemes to gig workers working for e-commerce platforms. Such workers make up about 1.5% of India's total workforce and 2.6% of the non-agricultural workforce. Importantly, this segment is growing rapidly and estimates suggest that there will be over 23 million gig workers by 2029-30, or 4.1% of the total workforce and 6.7% of the non-agricultural workforce.

The role of technology in the gig economy is dichotomous. On one hand, it improves the work flexibility and earnings potential of a gig worker, while on the other it creates welfare responsibility challenges. Given its huge potential to create livelihoods, we must find the right balance between worker protection and preserving the flexibility that gig work offers.

For possible solutions, let us look at traditional notions of social security and how it has evolved with the rise of the gig economy.

Traditionally, social security systems have been associated with formal employment, where the state mandates employers to provision for benefits such as health coverage, insurance, retirement contributions and other forms of protection. In contrast, the gig economy operates on a model of freelance, temporary or contract-based work, where workers are not tied to a single platform.