Hindu Editorial Analysis : 16-October-2024
Recently, the Union Ministry of Labour and Employment in India has proposed a national law to include gig workers in social security schemes. This would provide vital benefits such as health insurance and retirement savings, helping to safeguard these workers’ financial stability.
Understanding the Gig Economy
The gig economy, also known as the freelance or on-demand economy, involves temporary and flexible jobs. Companies are increasingly opting to hire short-term contractors, freelancers, and consultants instead of full-time employees. This trend is supported by:
- Technology: Widespread use of smartphones and digital platforms.
- Demographics: A large population of young, tech-savvy individuals.
Definition of Gig Workers
According to NITI Aayog’s report, gig workers are those engaged in income-earning activities outside traditional employer-employee relationships. They are categorized into:
- Platform Workers: Those working through apps like Uber, Zomato, and Swiggy.
- Non-Platform Workers: Individuals working in informal settings without app-based mediation.
Growth of the Gig Economy
The gig economy is growing rapidly in India. In 2020-21, about 77 lakh workers were involved, making up 2.6% of the non-agricultural workforce. By 2029-30, this number is expected to rise to 2.35 crore (23.5 million), constituting 6.7% of the non-agricultural workforce.
Current Challenges for Gig Workers
Despite their increasing numbers, gig workers face significant challenges, including:
- Lack of Social Security: They are often excluded from benefits like health insurance and retirement plans.
- Economic Vulnerability: Many gig workers do not earn enough, with over 43% making less than ₹500 a day.
- Job Insecurity: They lack protections like maternity leave and paid leave.
Proposed Legislation
The proposed national law aims to create a safety net for gig workers through several measures:
- Revenue Contribution: Aggregators like Zomato will contribute 1%-2% of their revenue to a social security fund.
- Welfare Board Model: A board will oversee the distribution of benefits.
- Worker Registration: Gig workers must register on the e-Shram platform to access benefits.
- Termination Notice: Companies must provide a 14-day notice before terminating a worker.
- Dispute Resolution: Mechanisms will be established to handle grievances between workers and companies.
Other Challenges Faced by Gig Workers
In addition to the above, gig workers encounter:
- Long Working Hours: Many work over eight hours daily, with some cab drivers clocking more than 14 hours.
- Low Pay: Earnings often fall short, with many struggling to cover basic living costs.
Government Initiatives
Several government initiatives aim to support gig workers:
- National Urban Policy Framework (NUPF): Recognizes urbanization’s impact on development.
- Code of Social Security (2020): Aims to provide social security schemes, though many provisions are not yet active.
- e-Shram Portal: Facilitates registration of unorganized workers, including gig workers.
Recommendations for Improvement
To enhance social security for gig workers, the following steps are suggested:
- Clarification of Employment Relations: Clearly define gig workers’ status to ensure they receive employee benefits.
- Inclusive Definitions: Update definitions to reflect modern employment realities.
- Enhanced Social Security: Expand schemes to cover comprehensive health insurance and paid leave.
- Dispute Resolution Mechanisms: Strengthen systems to protect workers’ rights.
- Skill Development: Address skill gaps by collaborating with businesses to train workers, especially marginalized groups.
Why In News
Recently, the Union Ministry of Labour and Employment sought to draft a national law to incorporate gig workers into social security schemes, offering benefits such as health insurance and retirement savings, thereby acknowledging the essential role these workers play in the economy and their need for better protection.
MCQs about The Need for Social Security for Gig Workers in India
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What is the primary aim of the proposed national law by the Union Ministry of Labour and Employment?
A. To eliminate gig work
B. To include gig workers in social security schemes
C. To regulate wages for full-time employees
D. To increase the number of freelancers in India
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According to NITI Aayog, which of the following best defines a gig worker?
A. A full-time employee in a traditional job
B. Someone engaged in temporary, flexible jobs outside a traditional employer-employee relationship
C. An individual working in agriculture
D. A corporate executive with a permanent contract
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What percentage of the non-agricultural workforce in India was estimated to be gig workers in 2020-21?
A. 1.5%
B. 2.6%
C. 4.1%
D. 6.7%
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What is one of the proposed measures in the national law to improve job security for gig workers?
A. Allowing gig workers to set their own wages
B. Requiring aggregators to provide a 14-day termination notice
C. Eliminating all gig work
D. Mandating full-time contracts for all gig workers
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