Gig Economy

Why in the news?

Telangana Legislative Assembly has passed the Telangana Platform-Based Gig Workers (Registration, Social Security and Welfare) Act, 2026, becoming the fifth state to adopt such legislation, after Rajasthan, Karnataka, Jharkhand and Bihar.

Key Highlights of the Act

• Aim: Provide Social security, employment and service conditions, safety, health and welfare measures for platform-based gig workers.
• Tripartite Social Security and Welfare Board: Established to register gig workers, with representation of women and persons with disabilities. 
• Social Security and Welfare Fund: To be financed through a 1-2% levy on platform transaction values, borne by aggregators, complemented by State grants and CSR funds.
  • The corpus will support insurance, accident cover, pension and maternity benefits.
• Universal Registration: Every worker will receive a unique identification number enabling direct access to government schemes.
• Grievance redressal system: Platform-level committees and district-level complaint mechanisms to protect workers from sudden termination or payment stoppages. 
  • Every aggregator platform with at least 100 workers must constitute an internal dispute resolution committee.
• Transparency: Companies required to maintain full transparency in order allocation and payment calculations; Arbitrary rate cuts will attract penalties.

About Gig Economy

• The Code on Social Security, 2020, defines a gig worker as a person who works outside a traditional employer-employee relationship. 
• Types: 
  • Platform workers: Those whose work is based on online apps or digital platforms. E.g., Ola, Uber, Zomato, Swiggy, Urban Company, etc.
  • Non-platform gig workers: Generally casual wage workers and own account workers in the conventional sectors, working part-time or full time.
• Status of Gig Economy in India:
  • Increase in Gig Workers: From 77 lakh in FY21 to 120 lakh in FY25.
    • Projected to increase 235 lakh by 2029–30 
  • Share of Total Workforce (FY25): >2% 
  • India's Global Rank in Gig Workers: 5th largest (Projected 3rd by 2030)
  • Gig Economy Value: ~USD 20 billion with projected Growth of 17% annual growth till 2027

Significance of Gig Economy

• Economic:
  • Employment and Economic Growth: The platform economy has the potential to create up to 90 million jobs and add up to 1.25% to India's GDP in the long run. (BCG report)
    • It provides a transition pathway for those leaving agriculture or declining industries, supplementary income for those in unstable employment, and primary employment option for those unable to secure formal-sector positions.
  • Supports Quick Commerce Ecosystem: Platforms like Blinkit and Zepto are now a major consumption driver in urban India, depend largely on gig delivery networks.
  • Economic Choice: Gig economy provides freedom for workers to choose when and how much they work.
• Social:
  • Financial Inclusion: Provides income to migrants, youth, and semi-skilled workers, facilitating access to digital payments and credit.
  • Women Empowerment: The gig economy has potential for increasing women's economic participation due to-
    • Flexible hours allow women to balance household responsibilities with paid work
    • Home-based and digital gig work bypasses mobility constraints and safety concerns of traditional workplaces.
    • Women constitute ~28% of platform economy workers as participation is rising across urban and semi-urban areas.
  • Empowerment of PwDs: Gig economy provides employment opportunities for PwDs due to flexible, location-independent jobs.
  • Micro-Entrepreneurship: Platforms like Airbnb and Urban Company let people monetize their skills, assets, and time while lowering entry barriers such as access to capital.
• Technology & Innovation: Drives digital adoption among low-income workers, bringing millions into the formal digital payments ecosystem.
• Convenience for Consumers: Gig economy enables personalised and cheaper services with doorstep access and increases consumer choice.

Challenges

• Income Volatility: Declining per-order payouts and lack of minimum wage guarantee cause unstable earnings.
• Occupational Hazards: Efficiency-boosting measures such as aggressive delivery timelines increase accident risk and mental stress among delivery workers.
  • E.g. Delivery workers of the platforms like Swiggy, Zomato, Blinkit, and Zepto went on strikes on New Year's Eve, calling for a ban on 10-minute deliveries.
• Lack of Social Security: No assured health insurance, accident cover, or pension under existing laws due to classification as 'independent contractors' and not employees.
• Poor Work Conditions: 60% of platform workers work 7 days a week, while 47% of the workers work for more than 12 hours a day (Tata Institute of Social Science).
  • They lack access to basic amenities like clean toilets, drinking water etc.
• Algorithmic Management: Opaque algorithms control order allocation, ratings, and sudden account suspension, compromising workers' collective bargaining power.
• Coverage Gaps: The Code on Social Security, 2020's '90-day rule' is criticised as too restrictive for short-term gig workers.
  • The workers are eligible for benefits only after 90 days on one platform or 120 days across multiple under the Code.
• Gender & Safety Barriers: Women face additional constraints such as safety concerns on late-night delivery routes, social stigma, and limited access to high-paying gig categories.
• Implementation Deficit: India's first Act for Gig workers by Rajasthan (2023) has seen slow rollout.

Conclusion

Gig and Platform economy is the present and future of work. Effective tripartite dialogue and cooperation between governments, employers/aggregators and workers is essential to strengthen the legal and institutional basis for sustainable growth. NITI Aayog Report recommended a 'Platform India Initiative' on the lines of Startup India to accelerate platformisation and formalize worker protections. Having a balanced humane approach towards growth of the gig economy is essential to uphold social and economic welfare.