This post has been authored by Shwetha Vincent and Anjan Kumar, Research Analyst Interns at Arthashastra Intelligence

What is the current state of India’s gig economy, and how can the NEP promote business and workers’ interest?

With the goal of generating employment and protecting workers, India is set to introduce its first National Employment Policy. The project is highly ambitious, and the government is in the process of setting up a committee of experts to determine the best policies and actions. Reports suggest, NEP will consider India’s increasing gig (or platform) workers into account.  Gig workers constitute a burgeoning sector of an increasingly digitalized world- the gig economy. The gig economy consists of short-term jobs which are flexible in nature, conducted over platforms like Uber, Swiggy, Dunzo, and so on. Global gig economy is predicted to increase to US$455 billion by 2024. The COVID-19 pandemic has further blurred the lines of employment and the employee-employer relationship.

The combined effect of increasing digitalization and the pandemic could expand the gig sector by at least twice the pre-pandemic estimate. March 2020 estimates show an increase in demand and supply of labor. Such increase in demand could be because of the need of IT solutions making work from home environment more conducive. Moreover, companies were using platform workers in lieu of full-time workers due to the loss in revenue. The International Labor Organization, in its report titled “World Employment and Social Outlook 2021” stated that demand for gig work is sourced from Western countries like Canada, the USA, and the UK.  However, supply is satisfied mainly by developing countries, with India accounting for 20% of the total share. India supplies the most number of gig workers in the world. This can be attributed to the high demand for software services, and the rise in supply of labor related to these tasks in India. Rise in supply is also directly affected by the outsourcing of IT and software searches to India. The result is that gig economy transactions contribute to 1.25% of India’s GDP.

But despite their hefty contribution to India’s economy, gig workers fall outside the purview of most existing labor codes that India have. The nontraditional nature of employment precludes them from attaining certain benefits under labor laws. But India’s gig economy could consist of at least 350 million gig jobs by 2025 as per ASSOCHAM, putting many workers in an extremely vulnerable position. The nascent state of India’s gig economy should be taken advantage of by formulating relevant policies that will allow employers and employees to reap benefits in the years to come. Companies that are looking for gig workers expect background and safety check. As the global gig economy grows, India will face stiff competition from other developing countries. Companies will look for quality of work, work experience, and service history. A gig worker, on the other hand, will expect steady remuneration, transparency in operations, and loyalty from their employers. The National Employment Policy should consider these factors- India’s position in the global gig economy, the need of employers, and the rights of workers. A step in the right direction would be to properly define “gig work” under the NEP. This will entitle gig workers to basic rights and benefits. The ambiguity surrounding around the term “employment” gets cleared if it expands the meaning and scope of the term. Furthermore, the policy must balance the rights of workers with the requirements of employers. It should solidify India’s position in the global gig market while bolstering the rights of its workers and also providing employment.

References

• International Labour Organisation: Flagship report on World Employment and Social Outlook 2021.
• ASSOCHAM report:  Gig Economy of India.
• Bloomberg Quint: India Largest Supplier Of Workers On Digital Platforms: ILO