GIG Economy

GS 3 Indian Economy and issues relating to planning, mobilization, of resources, growth,development and employment.

Introduction 

       A gig economy is a free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements.

Examples of gig employees in the workforce could include: 

  • freelancers
  • independent contractors
  • project-based workers
  • temporary or part-time hires.

Contemporary News:

  • The new Code on Social Security allows a platform worker to be defined by their vulnerability not their labour, nor the vulnerabilities of platform work.
  • Swiggy workers have been essential during the pandemic.
    • so they have faced a continuous dip in pay and no rewards for being essential workers.
  • During the last six months, many platform workers have unionised.
    • just as that of Uber and Ola taxi drivers has been taking shape for a few years now.
  • Under the All India Gig Workers Union and have protested day in and day out.
    • deploring Swiggy for reducing their base pay from ₹35 to ₹10 per delivery order.

Stable terms of earning have been a key demand of delivery-persons and drivers through years of protests.

About gig economy:

56% of new employment in India is being generated by the gig economy companies across both the blue-collar and white-collar workforce.

Effects in the Economy:

  • Gig Economy is creating lakhs of jobs, but workers don’t see a future.
  • Periodic Labour Force Survey from the Ministry of Statistics and Programme Implementation indicates
    • unemployment rate at a 45-year high, at 6.1%
    • the highest levels of joblessness is among urban youth.
  • Other reports show that 
    • over the past two years domestic consumption has reduced
    • industrial growth has flatlined
    • private investments are lower
    • market volatility has hit drivers of employment.
  • Including undergraduates and diploma holders now look at the gig economy as a stop-gap solution until the market turns.
  • Human resources firm Team Lease estimates that 13 lakh Indians joined the gig economy in the last half of 2018-19
    • registering a 30% growth compared to the first half of the fiscal year.
  • 21 lakh jobs that will be created in the metros in 2019-20
    •  14 lakh will be in the gig economy.
  • Food and e-commerce delivery will account for 8 lakh positions 
  • Drivers will account for nearly 6 lakh positions.
  • Delhi, Bengaluru and other metros are expected to be the biggest drivers of this sector. 
  • Two-thirds of this workforce will be under the age of 40.

Three new labour codes:

  • Platform and gig workers as new occupational categories in the making.
  • In a bid to keep India’s young workforce secure as it embraces ‘new kinds of work.
    • like delivery, in the digital economy.
  • The Industrial Relations Code, 2020: 
    • Standing orders on matters related to 
      • workers’ classification
      • holidays
      • paydays
      • wage rates
      • termination of employment
      • grievance redressal mechanisms 
    • is mandated to establishments with at least 300 workers, instead of 100 workers.
    • Prior permission of the government before closure, lay-off, or retrenchment mandated to establishments 
    • The threshold for negotiating council of trade unions have been reduced from 75% workers as members to 51% of workers
    • Workers may apply to the Industrial Tribunal in case of dispute – 45 days after the application.
  • Code on Social Security, 2020:
    • Social security funds for unorganised workers, gig workers and platform workers.
    • Definition of employees expanded to include more workers like 
      • inter-state migrant workers
      • platform worker
      • film industry workers
      • construction workers.
    • Gratuity period for working journalists reduced from five to three years.
    • Penalty for unlawfully deducting the employer’s contribution from the employee’s wages is only Rs 50,000 fine with no imprisonment.
    • Central government may defer or reduce the employer’s or employee’s contributions (under PF and ESI) for a period of up to three months in the case of a pandemic, endemic, or national disaster. 
    • Representation of central government officials in the National Social Security Board for unorganised workers increased to 10 members.
  • Code on Occupational Safety, Health and Working Conditions, 2020:
    • Factory definition expanded to  20 workers forpremises where the process uses power and 40 workers where the process uses no power. 
    • Manpower limit on hazardous conditions removed and mandates applying Code on contractors employing 50 or more workers instead of 20.
    • Daily work hour limit fixed at maximum of 8 hours per day
    • Women will be entitled to be employed in all establishments for all types of work and employer required to provide adequate safeguards in hazardous conditions.
    • Workers earning a maximum of Rs 18,000 per month, or such higher amount deemed as inter-state migrant workers and will be allowed to avail benefits like 
      • Public distribution system (PDS)
      • building cess
      • insurance
      • provident fund.
    • Central and state governments to maintain or record the details of inter-state migrant workers in a portal.

Way Forward

  • The Code on Wages, 2019, tries to expand this idea by using ‘wages’ as the primary definition of who an ‘employee’ is.
    • The categories and where they appear become key signs for understanding what kind of identity different workers can have under these new laws.
    • Platform delivery people can claim benefits, but not labour rights.
    • does not allow them to go to court to demand better and stable pay.
      • main role of the laws for a ‘platform worker’ is to make available benefits and safety nets from the government or platform companies.
  • Code on Social Security, 2020, platform workers are now eligible for benefits.
    • eligibility does not mean that the benefits are guaranteed.
    • Actualising these benefits will depend on the political will and how unions elicit political support.
      • states like Karnataka, where a platform-focused social security scheme was in the making last year.

Conclusion 

      With a population of over 1.3 billion, and a majority of them below the age of 35, relying on the “gig economy” is perhaps the only way to create employment for a large semi-skilled and unskilled workforce. It is important to hand-hold this sector and help it grow. We need policies and processes that give clarity to the way the sector should function.

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