Regulating Gig Economy

Syllabus :GS 3/Economy

In Context

• The Karnataka government plans to introduce legislation for gig workers, seen as a necessary and positive step.

About 

•  The Karnataka Bill aims to make platforms accountable by mandating transparency about algorithmic parameters and worker data usage, thereby reducing algorithmic control.
• Karnataka’s draft Bill mandates fair contracts, income security, and the right to refuse work without penalties, aiming to balance worker rights against platform control.
• The Karnataka Bill acknowledges the full-time nature of gig work by introducing mandatory social security provisions.

About the Gig Workers 

• The gig economy in India is experiencing rapid growth, driven by technological advancements, urbanization, and a young, dynamic workforce. 
• The gig economy encompasses a wide range of jobs, from high-skilled roles in IT and finance to low-skilled tasks like delivery and ride-sharing services.
• Gig workers, who engage in temporary, flexible jobs often facilitated by digital platforms, are becoming a significant part of the labour market.

Present Status 

• According to NITI Aayog’s indicative estimates based on national labour force survey data, in 2020–21, 77 lakh (7.7 million) workers were engaged in the gig economy .
• As per the Economic Survey 2023-24, the gig workforce is expected to expand to 2.35 crore (23.5 million) and form 6.7 per cent per cent of the non-agricultural workforce or 4.1 per cent of the total livelihood in India by 2029–30. 

Opportunities 

• Flexibility: Gig workers enjoy the flexibility to choose their working hours and projects, which can lead to a better work-life balance.
• Additional Income: For many, gig work provides an additional source of income or a primary livelihood, especially in urban areas where traditional job opportunities may be limited.
• Skill Development: Gig work often requires workers to develop new skills and adapt to different roles, enhancing their employability in the long run.

Challenges 

• Lack of Social Security: Gig workers often lack access to social security benefits such as health insurance, retirement plans, and paid leave.
  • This makes them vulnerable to economic uncertainties.
• Income Instability: The income of gig workers can be highly variable, depending on the availability of work and the rates offered by platforms.
• Regulatory Issues: The legal and regulatory framework for gig work is still evolving.
  • Workers are subject to algorithms dictating hours, tasks, and performance metrics, leaving them feeling controlled rather than autonomous.

Government Initiatives and Recommendations

• The Indian government has recognized the importance of the gig economy and is taking steps to support it. 
• The Code on Social Security (2020) marks a significant advancement by expanding the scope of social security benefits to encompass gig and platform workers
• The NITI Aayog report recommends several measures to harness the potential of the gig sector:
  • Access to Finance: Developing financial products tailored for gig workers to help them manage their income and investments.
  • Skill Development: Implementing platform-led, outcome-based skilling programs to enhance the capabilities of gig workers.
  • Social Inclusion: Promoting gender sensitization and accessibility awareness programs to ensure inclusivity in the gig workforce.
  • Social Security: Extending social security measures in partnership with platforms, as envisaged in the Code on Social Security 2020.
•  States like Rajasthan and Karnataka are leading with legislation for gig worker rights, emphasizing state roles in ensuring worker protections.

Suggestions and Way Forward 

• The gig economy in India is poised for significant growth, offering numerous opportunities for workers and businesses alike. 
• However, addressing the challenges related to social security, income stability, and regulatory frameworks is crucial for the sustainable development of this sector. 
• With the right policies and support, the gig economy can become a cornerstone of India’s future labor market, driving innovation and economic growth.
  • There is a need for policies that ensure fair contracts, income security, and transparency in algorithms used by digital platforms

Source:TH