The internet revolution has spawned a large number of platform-based e-commerce companies in India. The rapid growth of these companies has led to an employment boom for gig workers. A Niti Aayog report estimates that the gig workforce in India will be 2.35-crore-strong by 2029-30, constituting 6.7 percent of the non-agricultural workforce and 4.1 percent of the country’s total workforce.
This growing workforce has for long been asking governments to bring them under a social security net. As labour is on the concurrent list, both the Centre and states are empowered to make laws to ensure these workers’ welfare. Indeed, the absence of job security, health benefits and adequate safety measures for gig workers has pushed both the Centre and states to frame laws for their welfare.
However, the Union and state governments have failed to work together to put in place a uniform mechanism that brings gig workers under a safety net, while saving the fast-growing platform-based companies from unreasonable financial burden and punitive action. States, especially those ruled by non-NDA parties, do not want to follow the Union government’s Code on Social Security passed by parliament in 2020. They want to have their own laws to collect money from the platform-based companies to run the welfare schemes. According to the central code, the Union government would collect 1 percent of the companies’ turnover.
Most states want a flat fee on each transaction to create a welfare fund. Besides, they also want to ensure job security, which is not part of the central code. While the previous government in Rajasthan had passed a law on the subject, Karnataka and Jharkhand are in the process of doing so. This has led to a situation where the companies are crying foul over the possibility of facing double taxation—at the hands of both the Centre and the states.
The Union and state governments need to work together to ensure they do not create parallel welfare structures that become unworkable, depriving gig workers of the much-needed benefits. PM Narendra Modi’s 100-day agenda includes notification of the 2020 labour codes. The Centre needs to initiate a dialogue with the states before notifying the codes in order to put in place a national welfare plan for gig workers.