Context:

• With the central scheme seeking Cabinet approval, India's attempts to create social security for online (app-based) gig workers are gathering steam.
• Strong social protection schemes that can survive workforce and sectoral changes must be in place as India works to make its workforce "future-ready".

Government Initiatives for Gig and Informal Workers: A Paradigm Shift

Health Coverage under Ayushman Bharat

• Gig and informal workers will receive comprehensive health insurance under the Ayushman Bharat scheme.
• This addresses the long-standing gap in access to affordable healthcare for unorganized sector workers.

Registration through eShram Portal

• The eShram portal enables workers to register themselves and gain access to various social security schemes.
• It guarantees that a centralized database of employees is kept and is, therefore, essential in formalizing unofficial labor.

Universal Account Number (UAN) and Transaction-Based Pension Policy

• A proposed Universal Account Number (UAN) will facilitate earnings tracking across multiple platforms.
• The transaction-based pension model allows for proportional contributions from various companies engaging the same gig worker.
• This design acknowledges the multi-platform nature of gig employment and allows for cumulative social security benefits.

Shift from Traditional Models

• The government's program reflects a transition from exclusive measures to a rights-based, universal framework for worker welfare.
• The revisions aim to ensure that all workers have access to labour rights by making transferring benefits easier and tracking them across platforms.

Recognition of Multi-Platform Gig Work

• The measures represent an important step towards recognising gig workers, who frequently lack a formal employer-employee relationship.
• It represents an effort to move away from the traditional reliance on formal sector organisations for social security coverage.

Inclusion in Social Security Frameworks

• These schemes address the historical exclusion of informal and gig workers from state welfare programs.
• The revisions offer a more inclusive social protection framework whereby benefits are not dependent on official employment status.

Significance in the Indian Context

• These measures have the potential to transform labour welfare in a country where more than 90% of workers are in the informal sector.
• They represent a systematic change towards inclusive growth, emphasising the government's obligation to protect the interests of all workers.

Systemic Flaws in the Existing Framework

Piecemeal Reforms

• India's approach to social security has been piecemeal, with no overarching strategy for comprehensive labor protection.
• Reforms often respond to emerging labor models rather than anticipating them.

Non-Ratification of ILO Convention No. 102 (1952)

• Despite being a founding member of the International Labour Organisation (ILO), India has not ratified the Social Security (Minimum Standards) Convention, 1952.
• This exemplifies the institutional reluctance to fully commit to labor rights and the unwillingness to conform to international social protection requirements.

Limitations of the Code on Social Security (2020):

• Though introduced as a part of India's Labour Codes consolidation, the Code on Social Security has been criticized for its ambiguous provisions, diluted safeguards, and challenges in implementation.
• Key criticisms include vague definitions of terms like 'gig' and 'platform' workers, which may exclude many informal workers from benefits.
• The dependency on Welfare Boards for benefit delivery raises governance and efficiency concerns.

Evidence of Inefficiency:

• According to Right to Information (RTI) data, ₹70,744.16 crores of construction cess collected from employers across states remained unutilized.
• The Comptroller and Auditor General (CAG) Report 2024 highlighted that 99 local bodies in Tamil Nadu delayed ₹221.8 crore in payments to the Tamil Nadu Construction Workers Welfare Board (TNCWWB).
• Even in Kerala, often viewed as a progressive state in labour welfare, only 5 out of 16 Welfare Boards were reported to function effectively (as per 2016–17 data). Some boards had zero reported beneficiaries.

Fragmented Policy Approach:

• The framework displays fragmentation and segmentation by focusing on narrow subsets of the informal economy, such as gig workers. In contrast, it pays no attention to the larger informal economy, including domestic workers.
• This arises insecurity for marginalized communities by resulting in unfair differences in protection coverage.

Over-Reliance on Welfare Boards:

• In several industries, including construction and the unorganized sector in particular, welfare boards serve as the principal institutional mechanism for the distribution of benefits.
• But they've been accused of incompetence, poor use of funds, and benefit delays time and time again.

Over-Optimism Regarding Gig Economy:

• Many in positions of power have looked to the gig economy as a means to formalize workers' contracts eventually.
• This fixation on gig platforms risks diverting attention away from the more significant necessity for universal safeguards and the pervasive structural informality in India's labor markets.

Public Advocacy and Response:

• The welfare board administration has been under constant pressure from civil society organizations and labor activists for improved openness, accountability, and governance.
• More and more people are demanding that our social security system be revamped to be more proactive, technologically integrated, and adaptable to the ever-changing demands of the labor market.

The issue with the Karnataka gig workers Bill explained Therefore, depending on a piecemeal strategy instead of a combination of universal social protection and focused support can neglect the unstable character of all informal work. including a strategy could also generate artificial divisions between various kinds of informal employment, including between gig labour and domestic work, and hence set arbitrary thresholds on who is deserving of social protection, and who is not. Assuming that concentrating on one worker segment will also be dangerous since it will inevitably help to solve the formalisation of informal labour issue. Right now, there is rightfully increasing enthusiasm about how gig work will employ more people going forward. But depending too much on it to formalise informal work is naive. India's workforce should be "future ready," so it is imperative to have strong social protection systems able to endure changes in the workforce and sectors of activity. This begs the important question: in what most sensible direction forward? Notwithstanding implementation logjam, the Code looks here to stay. It also allows States to implement social security policies inside their framework, even while the Centre handles most of the monitoring. Starting from the Code's requirements as the very minimum, one might regard them as a basis for building stronger, more inclusive, accessible, finally universal social protection systems that leave no worker behind.

Way Forward and Implications of Incremental Reform

Targeted Relief through Welfare Boards

• India’s fragmented welfare model, built around sector-specific welfare boards, offers targeted relief to select worker groups.
• Example: Beedi and cigarette workers in Karnataka recently demanded revival of a defunct welfare fund, highlighting the sectoral approach's limitations in sustainability and reach.

Need for Resilient Social Security Systems

• With the vision of a ‘future-ready’ workforce, India must develop resilient social protection systems.
• These systems must be capable of adapting to workforce transitions, sectoral shifts, and evolving labour market dynamics.

Central Role of the Code on Social Security

• The Code on Social Security (CoSS) is expected to remain the foundational legal framework, despite delays in its implementation.
• It adopts a centralised structure but permits State-level flexibility, enabling tailored welfare interventions while ensuring a uniform national vision.

Strategic Baseline Approach

• A reasonable technique would be to treat the CoSS as a starting point rather than a final answer.
• The Code should serve as a foundation for larger rights that are inclusive, transparent, and enforced.

Augmentation for Inclusive Coverage

• To enhance its effectiveness, the Code must be augmented with additional safeguards such as:
• Universal coverage ensuring no worker is left behind.
• Inclusive and accessible grievance redress mechanisms.
• A focus on vulnerable and historically excluded groups.

Implications of the Incremental, Piecemeal Approach

Fragmented Implementation and Bureaucratic Silos

• Informal workers are treated in sectoral silos—beedi workers, construction workers, gig workers, domestic workers—each with its own board, eligibility rules, and funding.
• This approach leads to unequal access to social protection, where similar levels of precarity yield different levels of support based solely on bureaucratic classification.

Reinforcement of Structural Exclusion

• While gig workers are increasingly at the center of policy discussions, the neglect of traditional informal sectors creates a hierarchy of informality.
• This risks reinforcing historical exclusion, where older or less visible groups remain marginalised despite decades of vulnerability.

Short-Term Solutions vs Structural Reform

• The current model mostly prioritizes short-term, reactive solutions, such as creating new welfare boards for emerging categories.
• However, this fails to address systemic governance failures, such as:
• Poor institutional capacity
• Lack of transparency
• Weak enforcement mechanisms

Obsolescence of Narrow Welfare Schemes

• Narrowly scoped schemes, while providing temporary benefits, often become obsolete or defunct, as evidenced by the closure of older welfare boards.
• There is a pressing need to build institutional resilience through structural reforms that transcend sectoral boundaries.

Conclusion

The aim is to build a future-ready, flexible, inclusive social protection system that acknowledges several kinds of employment, closes the formal-informal labour divide, guarantees dignity and security for all workers, irrespective of classification.

Practice Questions Q. Examine how a future-ready social protection framework that ensures inclusivity and adaptability.