NITI Aayog suggests social security for gig workers

Prabhudatta Mishra | | Updated on: Jun 28, 2022
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Pegs India’s gig workforce to increase 67% to 2.35 crore by 2029-30

The government’s think-tank NITI Aayog has pegged the country’s gig workforce to increase 67 per cent to 2.35 crore by 2029-30 from 77 lakh in 2020-21 and suggested a number of steps for both private sector and government to take care of the interests of this segment. However, it has not touched the issue of provident fund benefits for this workforce.

Releasing the report, ‘India’s Booming Gig and Platform Economy’ on Monday, NITI Aayog has asked the government to ensure universal coverage of platform workers through the Code on Social Security, bridge skill gaps by carrying out periodic assessments and partnering with platform businesses for onboarding skilled women and persons with disabilities (PwDs). It also suggested to reach out to “unbanked and under-banked women and PwDs” through fintech services.

The think-tank has created a framework, named as RAISE, for operationalising the Code on Social Security (CoSS), 2020 and has asked the Centre and States to adopt a five-pronged approach to ensure realisation of full access to social security for all gig and platform workers when they draw up rules and regulations under the code. The framework includes recognition of the varied nature of platform work to design equitable schemes, augmentation of social security through innovative financing mechanisms, incorporation of specific interests of platforms in government schemes with a view on job creation. It also has asked for ensuring benefits of government schemes are made accessible to workers.

However, how exactly the government will facilitate these workers access to providend fund (PF) or medical care (as availed by workers under ESI scheme) has not been answered in the report. If the platforms are expected to foot the bill for employees/workers/partners contributions under the EPFO, that will substantially hike the cost of doing business.

According to former Rajya Sabha MP and General Secretary of the Centre of Indian Trade Unions Tapan Kumar Sen, there are no enabling provisions in the Social Security Code to ensure that pension, PF or similar attendant benefits that can be provided to gig workers.

“The statute does not define clearly what is a gig worker or what his relationship with the employer is or who is a employer or what a salary is. In such a situation, how is PF to be accrued, how should pension be decided? This is just creating a lot of hype without actually giving any statutory rights to the workers,” Sen told BusinessLine.

Global precedent

The report has highlighted some specific social protection approaches by companies and others in different countries for gig and platform workers and recommended for their adoption in India.

On the lines of Indonesia’s initiatives in offering accident and other insurance to workers through digital mechanisms, such a model may be adopted by ride-hailing, delivery and e-commerce platforms to provide accident insurance to delivery and driver partners, and other platform workers across India.

The fintech community in the UK came together to build a ‘Covid Credit’ that allowed sole traders to self-certify lost income. Their aim was to extend government relief, which was otherwise meant for salaried workers, to now be expanded to the self-employed, gig workers and small businesses through this Open Banking technology, according to the report.

According to the report, gig workers can be broadly classified into platform and non-platform workers. Platform workers are those whose work is based on online software apps or digital platforms while non-platform gig workers are generally casual wage workers, working part-time or full- time.

About 47 per cent of the gig work is in medium skilled jobs, 22 per cent in high skilled, and about 31 per cent in low skilled jobs. About 26.6 lakh gig workers were involved in retail trade and sales, and about 13 lakh were in the transportation sector in 2020-21. As many as 6.2 lakh were in manufacturing and another 6.3 lakh were in finance and insurance activities.

Published on June 27, 2022
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