The NDA government plans to roll out a social security contribution system for gig workers, where platforms employing these workers must deduct a specific percentage of their payments and deposit it into the Employees’ Pension Scheme. According to a report in the Times of India, the government may also match an additional 3-4% of the amount deposited by the platform.
This initiative will encompass not only workers from food delivery and ride-hailing platforms but also software professionals and other gig economy workers. Social security provisions for gig workers were incorporated in the labour codes enacted a few years ago, although implementation has been delayed as several states have yet to align with them.
What is Social Security Code?
The Social Security Code contains clauses for creating a social security fund and providing health, accident, and other benefits. In October 2024, Labour minister Mansukh Mandaviya proposed that social security for gig workers could be introduced before the complete enforcement of the labour codes.
A committee led by a senior official has been established to develop the strategy for implementing this scheme. The objective is to establish a retirement savings plan that workers can utilize upon retirement, as per sources familiar with the conversations.
Other security measures for gig workers
Earlier, it was reported that the government is implementing health insurance and pension programs for gig workers to ensure they have access to essential social security benefits.
Insurance cover: Under the Code on Social Security 2020, gig workers will have the opportunity to obtain life and disability insurance, providing them with financial protection in the event of accidents or unforeseen circumstances.
Maternity Benefits: Female gig workers will have access to maternity benefits, which will provide financial support during their maternity leave.
Old Age Protection: Pension plans will be implemented to safeguard the financial well-being of gig workers as they enter retirement, creating a safety net for their future.
Social Security Fund: A dedicated Social Security Fund will be established to fund these welfare programs, potentially financed through methods such as a proposed transaction cess on gig and platform-based companies.
Unique Identity Numbers: To enhance the efficiency of benefit distribution, the government may implement unique identity numbers for gig workers, enabling seamless access to social security programs.
Gig workers
A report by Niti Aayog in 2022 revealed that India had approximately 7.7 million gig workers in 2021. Titled “India’s Booming Gig and Platform Economy,” the report projected that the number of gig workers in India could increase to 23.5 million by 2030, equivalent to the combined population of Sweden, Denmark, and Finland.
The initial move towards incorporating gig workers into social security schemes began in 2020 with the implementation of the Code on Social Security. This legislation marked the first official recognition of gig workers and laid the foundation for the establishment of social security provisions.