India’s platform workers need better social security protections, says government think tank

The report, India’s Booming Gig and Platform Economy, says the Indian government and app-based businesses should collectively ensure that platform workers have insurance cover to meet the costs of medical care and living expenses in the event of an accident at work, receive paid sick leave and are given retirement plans and benefits.

Photograph: iStock credit: amlanmathur

NITI Aayog, which advises the central government on long-term national development priorities and strategies, says platforms like Ola, Uber and Swiggy should provide (or be required by the government to provide), paid sick leave and insurance for personal medical expenses for app workers and their families for “all the workers they engage, round the year”.

The report adds that ride-hailing, delivery, e-commerce and other platforms should consider adopting – or the government should consider implementing – an insurance scheme to provide social security support to platform workers in the event of them suffering accidents at work and general health problems. NITI Aayog points to how Indonesia automatically deducts a small amount of the tariff from app-based payments, such as motorcycle taxi rides, to fund insurance to cover medical care if the worker is injured and to provide three months pay if the individual cannot work due to work injury. It says these social security protections and payments could be “offered in collaboration with the private sector or government” in India.

The report also says platform companies should consider providing income support to workers when work is irregular, and that both gig and platform companies “need to adopt policies” that offer retirement plans and benefits (i.e. pension payments). It says pension schemes for platform workers could be “uniquely designed by a firm, in partnership with insurance companies, or could be designed and offered in collaboration with the government”.

The report aims to provide an estimate of the current size and job-generation potential of the gig and platform economy in India. It also highlights the opportunities and challenges of this emerging sector and suggests initiatives for developing the skills of workers in the sector and creating additional jobs in the industry.

The report concludes that India’s gig and platform workforce is expected to see huge expansion from 7.7 million in 2020-21 to 23.5 million by 2029-30. It classifies gig workers into two categories – platform and non-platform workers.

Platform workers are defined as those whose work is based on online apps or digital platforms, like Ola, Uber, Dunzo, Zomato, Swiggy and Urban Company. Meanwhile, non-platform gig workers are defined as casual wage workers in the conventional sectors, like agriculture and construction, working part-time or full-time.

The report also says the gig and platform economy has the potential to boost the employment rate of both women and people with disabilities (PWDs). It says that while the labour force participation rate for women and disabled people remains low, platform work could be an attractive route into work for women and disabled workers due to factors such as the low entry barriers, ease of enrolment, flexibility of hours and choice of work tasks.

As a result, NITI Aayog recommends the government consider providing fiscal incentives, such as tax breaks or start-up grants, to platform businesses where a minimum proportion of the workforce is female and/or people with disabilities. It also recommends that platform businesses develop inclusive communications, systems and processes to help attract female and disabled job seekers – such as employing a higher share of female and disabled managers and supervisors than traditional companies.

Launching the report, Amitabh Kant, CEO of NITI Aayog, said: “Digital platforms in India have thrived as a result of the increasing use of smartphones, the low cost of internet and other initiatives under the Digital India campaign. Different platforms that comprise the gig economy offer innovative solutions in different sectors such as transport, retail, personal and home care.

“This changing scenario calls for the need to assess the employment generation potential of the gig and platform sector and design policy measures that can invigorate efforts from different stakeholders to promote growth along with decent work opportunities in this sector.”

However, labour activists and trade unions say the report’s recommendations do not adequately address platform workers’ concerns about their working conditions and employment rights. They also criticised NITI Aayog for failing to consult gig and platform workers and unions before proposing new social security and other protections for the sector.

Shaik Salauddin, general secretary of IFAT (the Indian Federation of App-based Transport Workers), said that while it was good NITI Aayog had addressed important social security measures, such as paid sick leave and health insurance, the think tank should have discussed these issues with trade unions to “land at a better solution”.

“How does one implement such schemes as NITI Aayog has not provided any mechanism or solutions for implementing such schemes?” he asked.

However, Abhishek Poddar, co-founder and CEO of Plum, an employee benefits platform, stated: “The law now recognises ‘Gig Workers’: The Code on Social Security, 2020 (“Code”) which is yet to be implemented in India, provides that gig workers will be able to get social security cover under the Employee State Insurance Scheme.

“Further, the central government may frame suitable social security schemes for gig workers on matters relating to inter alia accident insurance, health benefits and any other benefit.”

Click here for the full NITI Aayog report. 
Click here for more information on the Labour Codes.