By Shahnawaz Khan
India has made remarkable progress in expanding social security through the groundbreaking Code on Social Security-2020 (CoSS 2020), positioning itself as a pioneer in this field. This legislation stands out for its acknowledgment of platform workers and extending universal social security to them. Furthermore, under India’s leadership, the G20 New Delhi Leaders’ Declaration has prioritised the goal of ensuring adequate social protection and decent working conditions for platform workers under the overarching theme of “The Future of Work”. Despite India’s progress toward a comprehensive social security regime, challenges have arisen. Some recent state-level laws, created hastily, pose a risk to the envisioned universal framework of CoSS 2020. This deviation from the intended path could hinder the achievement of universal social security for platform workers.
The rise of digital platforms has fueled the gig economy. Driven by factors like workforce growth, and digital advancements, India’s gig economy has burgeoned, with over 15 million gig workers and a robust 17% CAGR. Many companies are heavily investing in this sector, intending to either maintain or expand their gig workforce. Additionally, India’s gig workforce is projected to rise to 23.5 million by 2029-30. Industries are drawn to the gig workforce due to the easy availability of workers at competitive rates, and ease of doing business. Platforms entice workers with low entry barriers, freedom in choosing occupation, schedule, and location, offering a quick and decent income. They provide part time work for newcomers, supplementary work for the employed, and freelance opportunities for the younger generation evading permanent employment constraints. Platforms’ flexible hours and freedom promote women’s workforce participation, reshaping dynamics, fostering cultural diversity, and enhancing global resource access.
Platform workers’ significance grows due to traditional roles shifting to platform-based work, and both new and existing sectors relying on these platforms. The NITI Aayog study alone identifies as many as 21 occupations and 15 industries – non-agrarian in nature – undergoing platformisation. Though CoSS 2020 defines gig and platform workers and pledges social security benefits, its delayed implementation is seen as a missed chance to establish a universal and inclusive social security system. Additionally, the code recognises “aggregators” mainly encompassing digital intermediaries or marketplaces, but omits specific mention of third-party agencies, i.e. workforce providers, providing workers to platforms. This raises uncertainty about whether these agencies will be obligated to contribute to any social security fund.
In addition to CoSS 2020, Rajasthan introduced the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act-2023, a state-level legislation. However, its rushed passage raised criticism for bypassing customary procedures such as thorough consultations, among others. A few other states hastily followed suit with similar legislation, lacking in-depth consideration for the challenges faced by both workers and platforms alike.
The legislations drafted or enacted by these states exhibit issues that could hinder effective social security implementation. These include disregard for the inter-state migratory nature of labour and instead creating a welfare system for domicile workers alone. Furthermore, such legislations rely on outdated policy-making, such as the establishment of bureaucratic “Boards” to oversee benefits, despite evidence showing their inefficacy for other worker classes. Additionally, these legislations propose imposing fees on each transaction conducted on platforms, directing the collected funds to the board’s corpus, but the ad-valorem levy burdens platforms, potentially reducing worker earnings and increasing customer costs. This reflects a poor understanding of the diverse business models implemented in the highly heterogeneous platform economy. Moreover, the lack of clarity on fund utilisation exacerbates the issue. Besides this, state laws, like CoSS 2020, also cover welfare funds, worker registration, and platform contributions, yet disparities persist with the central law, risking confusion and operational challenges for uniformity and effectiveness across regions.
The Rajasthan gig law and similar state legislations highlight India’s broader issue: the lack of a robust, universal regulatory framework. Instead of gradually establishing a comprehensive and universal social security system, we’re opting for a fragmented approach, leaving millions of workers insecure. India’s extensive unorganised labour market necessitates avoiding high costs on platform-based job creation. A fragmented regulatory approach for platforms and gig workers could stifle innovation, deter investment, and hinder the platform economy’s growth, worsening challenges for both workers and platforms. At this crucial juncture, disparate state-wise laws and registration processes for a nationwide platform seem impractical. India must construct a uniform, pan-nation, and robust regulatory framework situated in its own context, i.e. presence of a high informal economy, and new-age and global aspirations of the country and its citizens.
India could also learn from its peers, and its own past. For instance, the US utilises the Administrative Procedure Act, mandating federal administrative agencies to adhere to a structured rulemaking process for formulating, amending, and repealing rules. Similarly, the UK’s Better Regulation Executive within the Department for Business and Trade collaborates with government departments to monitor and reduce regulatory burdens effectively. Additionally, India’s own efforts of 2019-20 of rationalising the hundreds of policies, laws, and regulations governing various aspects of labour at the union and state levels, and creating four comprehensive pan-India legislations was a landmark development, and worthy of emulation around the world.
These practices underscore a key principle, that of collaboration. Collaboration among central and state authorities and all stakeholders is vital to develop a practical and meaningful approach for platform workers’ welfare, avoiding knee-jerk reactions driven by political urgency. Inclusive involvement of government, platforms, workers and civil society is essential to shape comprehensive and balanced policies that reflect diverse perspectives. By adopting a collaborative, informed, and inclusive approach, India can develop a regulatory framework for the platform economy that promotes fairness, efficiency, and sustainability.
The author is the Lead of the Centre for Inclusive Mobility at the OMI Foundation. He is a PhD candidate at the Department of Social Work, Jamia Millia Islamia, New Delhi.
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