Thankfully, the impromptu protests against the scheme for recruitment of short term soldiers in the Indian armed forces have subsided in a few days and the armed forces are reporting enthusiastic response from the youth.
I see this scheme as an extension of the fast
growing gig economy in the country. Most industries in the country are
increasingly relying on gig workers to perform their business to maintain a
lean and flexible cost structure for their enterprises.
Recognizing the trend, the government has
accorded legal recognition to the gig workers. The Code on Social Security,
2020, (CSS2020) that shall, in due course, replace nine extant labor laws and establish
a single comprehensive legislation to extend social security benefits to all
employees and workers irrespective of belonging to the organised or unorganised
sector. The Code on Social Security, 2020 brings, within itself the
self-employed workers, home workers, wage workers, migrant workers, the workers
in the unorganised sector, gig workers and platform workers for the purpose of social security schemes,
including life insurance and disability insurance, health and maternity
benefits, provident fund.
In general ‘gig workers’ are defined as independent
on-call or temporary workers engaged by online platforms and contract firms.
Usually, gig workers enter into formal agreements with employers to be
available on-call to provide services to the employer’s clients. CSS2020
defines the term gig worker as, “a person who performs work or participates in
a work arrangement and earns from such activities outside of traditional
employer-employee relationships”. Thus even a part time teacher and doctor
attending patients in OPD of a hospital could technically fit into the spectrum
of gig economy.
The NITI Aayog expects the gig workforce in
India to expand to include 23.5million workers by 2029-30. This will be 6.7% of
the non-farm workforce. Considering the growing contribution of the gig economy
in overall GDP growth, NITI Aayog recently prepared a report titled “India’s
Booming Gig and Platform Economy - Perspectives
and Recommendations on the Future of Work”. The report is based on a study undertaken
with the objective to understand the significance of this sector to the
economy, to employment generation and suggest measures to encourage employment
in the sector, along with initiatives for social security. The report offers a
scientific methodological approach to estimate the job creation potential of
the gig-platform economy as well as provides wide-ranging perspectives and
recommendations on the gig-platform economy in India.
The following points highlight the current
state of gig workers in the economy:
Gig economy is growing fast
It is estimated that in 2020-21, 77 lakh (7.7
million) workers were engaged in the gig economy. They constituted 2.6% of the
nonagricultural workforce or 1.5% of the total workforce in India. The gig
workforce is expected to expand to 2.35 crore (23.5 million) workers by
2029-30. The gig workers are expected to form 6.7% of the non-agricultural
workforce or 4.1% of the total livelihood in India by 2029-30.
Employment elasticity of gig economy is
higher
The employment elasticity to GDP growth for gig
workers was above one throughout the period 2011-12 to 2019-20, and was always
above the overall employment elasticity. The higher employment elasticity for
gig workers indicates the nature of economic growth, which created greater
demand for gig workers while not generating commensurate demand for non-gig
workers.
(Also see Make growth employment elastic)
Gig work is expanding in all sectors
In terms of industrial classification, about
26.6 lakh (2.7 million) gig workers were involved in retail trade and sales,
and about 13 lakh (1.3 million) were in the transportation sector.
About 6.2 lakhs (0.6 million) were in
manufacturing and another 6.3 lakhs (0.6 million) in the finance and insurance
activities.
The retail sector saw an increase of 15 lakh
(1.5 million) workers during 2011-12 to 2019-20, transport sector 7.8 lakhs
(0.8 million), manufacturing — 3.9 lakhs (0.4 million). d. In the education
sector, the expansion was from 66,000 to more than one lakh (100,000) by
2019-20.
Gig work accentuating skill polarization
At present about 47% of the gig work is in
medium skilled jobs, about 22% in high skilled, and about 31% in low skilled
jobs.
Trend shows the concentration of workers in
medium skills is gradually declining and that of the low skilled and high
skilled is increasing.
Within gig economy platform work is more
substantial
Gig and specifically platform workers exhibit
characteristics beyond the formal-informal dichotomy. While gig work is a
larger concept with many undefined aspects, platform work within it is more
substantial.
In a platform economy, any individual armed
with an internet-enabled smartphone and tangible or intangible assets can
monetise these assets at will, to become a platform worker. Thus, beyond its
potential to provide a wide spectrum of services to consumers, the platform
economy can also offer livelihood opportunities to different sections of
workers, including women, migrants, Persons with Disabilities (PwDs), and the
youth.
Challenges faced by gig workers
Lack of job security, irregularity of wages,
and uncertain employment status for workers are significant challenges in the
gig and platform sector. The uncertainty associated with regularity in the
available work and income may lead to increased stress and pressure for
workers. Platform workers are termed as “independent contractors”. As a result,
platform workers cannot access many of the workplace protections and
entitlements.
The report makes some significant
recommendations to strengthen the gig work economy that I would discuss in a later
post.
