The central government is mulling the launch of a pan-India social security scheme for gig workers in the e-commerce and food aggregator space after Rajasthan and Karnataka introduced similar social security measures. The Rajasthan government passed the Platform-Based Gig Workers (Registration and Welfare) Bill, 2023, in the last week of July 2023, which aims to bring gig workers into the fold of the formal workforce.
Responding to a question on whether the Central Government is developing a social security scheme for gig workers, the Union Minister for Labour and Employment Bhupinder Yadav said in the Rajya Sabha, that the Central Government is evaluating this scheme “In light of the ‘Code on Social Security, 2020.’ This calls for “the development of appropriate social security schemes for gig workers and platforms in order to establish a Social Security mechanism for workers employed in this form of activity (e-commerce and food delivery services).”
The central government has stated that the scheme, when implemented, will support matters related to life and disability insurance, accident insurance, health and maternity benefits, and old age protection for gig workers.
This is slated to provide a fillip to low electric scooters and last mile mobility in the country.
The Niti Aayog says that there are 77 lakh gig workers in the country, who are the prime customers for low-speed electric scooters priced between Rs 50,000 to Rs l lakh. It is of the opinion that this sector will require at least 2.3 crore gig workers in the next five to seven years, given the exponential growth of the e-commerce and online food delivery business. Uday Narang, the Founder and Chairman of Omega Seiki Mobility concurs.
“As gig workers are prime consumers of low and mid-speed electric scooters priced in the 50,000–80,000 range due to their lower total cost of ownership when compared to ICE scooters, the announcement of any social security measures by the Central Government will encourage many more unemployed or underemployed youth to come to this meaningful means of employment and further boost demand for electric two-wheelers,” Narang said.
The Rajasthan model calls for the establishment of a welfare board to oversee the implementation of its regulations, which will register gig workers, aggregators, and main employers.
The Rajasthan Bill also states that “all platform-based gig workers will be provided with a unique identification (ID) applicable across all platforms, which will be valid in perpetuity.”
Food aggregators will be required to legally provide information to the organisational body that will be constituted under the aegis of the Ministry of Labour. According to the bill, the aggregator, not the worker, will also be responsible for notifying the board that a worker has been recruited.
Furthermore, Karnataka is the first state to provide gig workers with a Rs 2 lakh life insurance policy and a Rs 2 lakh accidental insurance policy.
During the presentation of the budget for 2023-24, the Karnataka government stated that the entire premium for the insurance component of gig workers will be paid out of state coffers.
What the scheme for gig workers will entail
The Minister of Labour and Employment, Bhupinder Yadav stated in the Rajya Sabha that the proposed scheme will be entirely or partially funded by the federal or state governments. Aggregators will also have the option of using CSR mandated funds for the same.
Yadav also said online e-commerce aggregators will have to contribute “1 to 2% of annual turnover for this cause, subject to a maximum of 5% of the amount paid or payable to such workers by an aggregator.”
According to Omega Seiki’s Narang, the digitisation of commerce and service provision is a key component of India’s unfolding growth story, with gig economy employees supporting clean mobility growth as buyers of electric two-wheelers.
“Any social security scheme for gig workers will result in higher disposable incomes for this community, which will soon drive demand for mid- and low-speed electric vehicles,” he said. “I applaud the government’s decision to provide a social security mechanism for this segment of the population; it will help the government achieve its zero-emission goals,” he added.