Towards Inclusivity: India’s Nationwide Social Security Net for Gig Workers, to be in place by January 2025 - A Step in Right Direction.

According to Niti Aayog, an estimated 65 lakh workers are engaged in gig and platform work, but this number is growing rapidly as more people join the gig economy. In fact, the number could already be closer to two crore due to the segment’s fast-paced expansion; the need for social security has never been more pressing. The labour ministry’s latest announcement on rolling out a social security framework by January is a welcome move for gig and platform workers, who have long been deprived of formal benefits like health insurance and pensions. This framework is expected to benefit workers associated with ride-hailing apps, delivery platforms, and other gig-based employment sectors.

The Growing Gig Workforce

As India’s economy increasingly relies on gig workers, their social protection has become a critical issue.

Historically, gig workers have existed in a grey area regarding labour rights. They operate outside the traditional employer-employee framework, which complicates their access to social benefits like insurance, pensions, and maternity leave. The Code on Social Security 2020 was designed to address this by providing protections such as life and disability cover, accident insurance, health and maternity benefits, and old age protection for gig and platform workers. However, its implementation has faced delays due to a lack of consensus across Indian states.

The Framework: A Precursor to the Labour Code

Labour Minister Mansukh Mandaviya emphasised the importance of immediate action, stating that the government could not wait for the full enactment of the labour codes before ensuring gig workers' rights. By establishing a framework now, the government aims to bridge the gap until full implementation.

Key Features of the Social Security Framework

While the specifics of the framework are still under discussion, several key suggestions have emerged. The framework is likely to include:

• Health Insurance and Pension Benefits: Gig workers will be able to access health insurance and pension benefits, marking a significant shift from their current lack of access to such protections.
• Unique Identity Numbers: To streamline benefits, workers may be assigned unique identity numbers that will make it easier to track and deliver social security entitlements.
• Cess on Transactions: One proposal involves creating a social security corpus through a cess on transactions, ensuring that gig workers receive contributions without the need for traditional employer-employee contributions.

This framework comes on the heels of the labour ministry's decision to extend enhanced insurance benefits for the six crore EPFO members, offering life cover of up to ₹7 lakh. This extension will be applied retrospectively from April 28, 2024, further demonstrating the government's commitment to worker protection.

Challenges Ahead

One of the significant challenges for implementing this social security framework lies in determining who will contribute to the social security fund. Since gig workers lack a direct employer-employee relationship, it’s unclear how contributions typically made by employers will be handled.

Another challenge is the differing levels of state implementation. While some states have already enacted laws protecting gig workers, many have yet to adopt such measures. The labour ministry’s framework aims to create a legally binding, nationwide policy to ensure consistency across the country.

The Way Forward

The introduction of a social security framework for gig workers is a crucial step towards inclusivity in the workforce. Gig workers have become an integral part of India's growing digital economy, and it is essential that they are granted the same protections afforded to more traditional workers. While challenges remain, the government's proactive approach could serve as a model for other countries facing similar issues.

The labour ministry’s commitment to implementing this framework by January reflects a growing recognition of the importance of gig workers and the need to protect their rights. As the gig economy continues to expand, providing these workers with social security will help foster a more equitable and sustainable workforce in the long run.