WELFARE OF GIG WORKERS: KARNATAKA MODEL

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Picture Courtesy:  THE HINDU

Context

The Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025, aims to provide basic social security cover, but faces challenges in calculating welfare cess.

Highlights of the Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025

Formal Recognition: Defines a gig worker as an individual engaged in contractual work sourced through a digital platform.

• Aggregators, defined as digital intermediaries connecting service providers (gig workers) with consumers.

Workers Welfare Board: To register gig workers, regulate social security schemes, manage welfare fees, and address grievances.

Welfare Fund: To finance social security and welfare initiatives for gig workers.

• Contributions from aggregators, gig workers, and grants from both central and state governments.

Social Security: Provision for accidental death and life insurance of ₹2 lakh each.

Fair Contracts: Platforms must provide a minimum of 14 days' written notice before terminating or deactivating a gig worker.

Grievance Redressal: Internal Dispute Resolution Committee (IDRC) at the aggregator level and the option to take disputes to the Welfare Board. 

What is the Gig Economy?

It as a market where services are offered temporarily or on a task-by-task basis, differing from traditional full-time employment.  

Gig economy has two main segments:

Platform-Based Gig Workers: Use online platforms or apps to connect with clients, including ride-hailing drivers, food delivery executives, and others.

Non-Platform Gig Workers: Workers in traditional sectors who do not depend on digital platforms.

Factors Responsible for the Expansion of the Gig Economy 

Expanding Digital Access and Smartphone Penetration: Affordable smartphones and widespread internet connectivity are foundational drivers. 

• India has over 954.40 million internet subscribers as of March 2024, and around 660 million smartphone users. 

Changing Workforce Preferences: A segment of workforce prioritizes work-life balance and flexibility over traditional 9-to-5 employment models. 

• Gig work offers the autonomy to choose projects, set schedules, and work from diverse locations.

Growth of E-commerce and Startups: Startup ecosystem and expanding e-commerce market (projected to reach US$200 billion by 2026) generate demand for flexible, on-demand labor in logistics, delivery, content creation, and marketing. 

Addressing Underemployment and Unemployment: Job opportunity for semi-skilled and unskilled labor.

Rising Urbanization: Growing middle class, drives consumer demand for quick, on-demand services like food delivery and e-commerce.  

What is the significance of gig economy in india?

Size and Growth:  A NITI Aayog report, "India's Booming Gig and Platform Economy" (2022), projected that the number of gig workers in India would rise to 2.35 crore by 2029-30, up from 77 lakh in 2020-21.

Skill Distribution: Gig work is dominated by medium-skilled jobs (around 47%), followed by low-skilled (31%) and high-skilled (22%). 

Contribution to GDP and Employment:  The gig economy is estimated to add 1.25% to India's GDP by 2030 and create 90 million long-term jobs.

•  By 2030, gig workers are projected to make up 4.1% of the total workforce.
• Platforms like Zomato and Swiggy provide alternative revenue source, in Tier-II and Tier-III cities.

Inclusive Growth:  Provides opportunities for marginalized groups, including women and rural populations. Flexible hours allow women to balance work and family responsibilities.

Skill upgradation: Workers take on diverse projects, thus skills training essential for staying relevant.

Formalization and Financial Inclusion: Digital payments are increasing financial inclusion for gig workers.  

• • UPI transactions have grown from 92 crore in FY 2017-18 to 13,116 crore in FY 2023-24.

What are the provisions available at the National level for the welfare of gig workers? 

Constitutional Provisions: Doesn't mention gig workers, however several articles indirectly lay the groundwork for their welfare:

• Article 21: Include the right to a dignified livelihood and a safe working environment.
• Article 39: Equal livelihood opportunities and equal pay for equal work for both men and women.
• Article 41: State to ensure the protection of individuals' rights to work, education, and public assistance in cases of unemployment, old age, sickness, and disablement.
• Article 42: State to make provision for securing just and humane conditions of work and for maternity relief. 

Central government policies and schemes

• Code on Social Security 2020 legally defines "gig worker" and "platform worker" for the first time. 
  • Provide social security benefits like life and disability cover, accident insurance, health and maternity benefits, and old age protection. 
  • Proposes a Social Security Fund funded by aggregators. 
• Code on Wages 2019 includes provisions for a universal minimum wage and floor wage applicable to gig workers.
• e-Shram Portal, a national database for unorganized workers, has registered over 30.58 crore as of January 2025, ensure access to social security schemes.
• The Union Budget 2025-26 announced measures like ID cards, e-Shram registration, and healthcare under PM Jan Arogya Yojana.

State-level initiatives

• Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023 was the first state law for gig workers, mandates registration of aggregators and workers.
• Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance 2025 formally recognizes gig workers.

What are the Challenges in ensuring gig worker welfare in India?

Job Insecurity & Income Volatility: Gig workers, classified as "independent contractors," lack job security and stable income. 

• Gig workers earn an average of ₹15,000-20,000 per month — below the national minimum wage.

Inadequate Social Security: Gig workers are excluded from traditional employee benefits like health insurance, paid leave, and retirement benefits.

• A 2024 NITI Aayog report highlights 90% of gig workers lack savings, vulnerable to emergencies
• The Code on Social Security, 2020, aims for coverage but implementation is slow and fragmented.

Poor Working Conditions & Risks: 85% of gig workers are working over eight hours daily and 21% over 12 hours. 

• They face safety hazards, exacerbated by pressures like "10-minute delivery".

Algorithmic Control & Lack of Transparency: Opaque algorithms dictate tasks, pay, and deactivations, leading to arbitrary decisions. 

Challenges for Women Gig Workers: Women face additional barriers, including a lower participation rate (around 28%), occupational segregation into lower-paying roles, and increased safety risks. 

Policy Implementation Hurdles: Ensuring uniform implementation of central and state-level laws remains a challenge. 

What is the way forward to enhance gig worker welfare in India?

Strengthen the legal framework: Implement a comprehensive national law to define gig worker rights, including minimum wages, working hours, and protection against unfair termination. 

• The Code on Social Security, 2020, is a start but lacks full implementation.
• Encourage states to follow the lead of Rajasthan and Karnataka to mandate aggregator registration, welfare boards, funds, and grievance mechanisms. 

Ensure social security and fair benefits: Establish a system where workers accrue benefits regardless of the platform or project they work on. 

• Mandate platforms to follow minimum wage standards, linked to location and skills. 

Improve working conditions: Enforce regulations on working hours to prevent exploitation. 

Address algorithmic control and transparency: Mandate platforms to disclose how algorithms affect wages, task allocation, and performance.

Skill development and inclusion: Invest in training programs to equip gig workers with skills for higher-paying roles or entrepreneurship. 

• Collaborations between National Skill Development Corporation (NSDC) and platforms like Rapido recently started, need to expand the model. 

Conclusion

India's gig economy has huge potential for job creation and economic growth. However, challenges like unstable employment, income volatility, lack of social security, poor working conditions, and algorithmic control need to be addressed. A comprehensive approach, including legal reforms, improved working conditions, algorithmic transparency, skill development, and digital literacy, can transform the gig economy. 

Source: THE HINDU