Social Security Cover for Gig Workers
Kartavya Desk Staff
Syllabus: Social Security
Source: NIE
Context: The 2025 Budget introduced health insurance and identity registration for gig workers to improve their social security. While this addresses basic welfare needs, challenges in enforcement and sustainability remain.
The Gig Economy: Growth and Challenges
• Rapid Expansion: The gig workforce constitutes 12% of the global labour market (World Bank) and is expected to reach 23.5 million in India by 2029-30 (NITI Aayog).
• Advantages: Provides flexible employment and income opportunities, driving economic growth, especially in e-commerce and service industries.
• Provides flexible employment and income opportunities, driving economic growth, especially in e-commerce and service industries.
• Challenges: Income insecurity due to irregular earnings. Lack of legal protection as gig workers do not fall under traditional labour laws. No employer contributions to pensions, insurance, or other social benefits.
• Income insecurity due to irregular earnings.
• Lack of legal protection as gig workers do not fall under traditional labour laws.
• No employer contributions to pensions, insurance, or other social benefits.
Existing Policy Framework
• Code on Social Security, 2020 Recognizes gig workers as a distinct category and provides for insurance, health benefits, pensions, and a Social Security Fund.
• Recognizes gig workers as a distinct category and provides for insurance, health benefits, pensions, and a Social Security Fund.
• Budget 2025 Provisions Health Insurance: Coverage under PM Jan Arogya Yojana. Identity Registration: e-Shram portal for tracking and integrating workers into social security schemes. Aggregator Module: Launched to streamline registration of workers and platform companies.
• Health Insurance: Coverage under PM Jan Arogya Yojana.
• Identity Registration: e-Shram portal for tracking and integrating workers into social security schemes.
• Aggregator Module: Launched to streamline registration of workers and platform companies.
Key Challenges in Social Security Implementation
• Lack of Employer-Employee Relationship: Gig workers are independent contractors, making it difficult to enforce labour protections and ensure mandatory contributions.
• Irregular Income & Financial Constraints: Unstable earnings limit workers’ ability to contribute to social security funds, making purely contributory schemes impractical.
• Gaps in Registration & Compliance: Many workers remain unregistered on the e-Shram portal, and platform aggregators have no legal obligation to provide social security.
• Sustainable Financing Mechanism: Funding social security requires a balanced approach, involving government support, platform aggregator contributions, and worker participation.
Global Best Practices for Gig Worker Protection
Country | Social Security Measures
UK | Minimum wage, paid leave, and pension for gig workers.
Singapore | Mandates platform aggregators to contribute to social security.
Oman & Thailand | Co-funded social security models.
Indonesia | Government-subsidized accident and life insurance.
Way Forward: A Sustainable & Inclusive Approach
• Multi-Stakeholder Social Security Model Government: Policy framework and partial funding. Platform Aggregators: Mandatory contributions to social security funds. Workers: Opt-in contributory pension and insurance schemes.
• Government: Policy framework and partial funding.
• Platform Aggregators: Mandatory contributions to social security funds.
• Workers: Opt-in contributory pension and insurance schemes.
• Expanding Benefits Beyond Health Insurance Pension & Retirement Plans: Small contributions pooled for old-age benefits. Skill Development: Upskilling for better income stability. Emergency Assistance: Financial aid for crisis situations.
• Pension & Retirement Plans: Small contributions pooled for old-age benefits.
• Skill Development: Upskilling for better income stability.
• Emergency Assistance: Financial aid for crisis situations.
• Strengthening Implementation & Compliance Mandatory Registration: e-Shram portal integration for better outreach. Worker Grievance Redressal: Institutional mechanisms to address concerns.
• Mandatory Registration: e-Shram portal integration for better outreach.
• Worker Grievance Redressal: Institutional mechanisms to address concerns.
• Leveraging Technology for Social Security Digital Payment Integration: Efficient contribution and benefit disbursal. AI-driven Monitoring: Real-time tracking of worker participation and compliance.
• Digital Payment Integration: Efficient contribution and benefit disbursal.
• AI-driven Monitoring: Real-time tracking of worker participation and compliance.
Conclusion:
Ensuring long-term success requires strong enforcement, sustainable funding, and aggregator accountability. A multi-stakeholder approach can balance flexibility with essential worker protections.
Insta Links:
• Social-security-code
• Examine the role of ‘Gig Economy’ in the process of empowerment of women in India. [UPSC -2021]