Social security plan for gig workers firmed up

The Centre is set to soon announce a social-security scheme for India’s estimated 7.7 million gig workers, along with health insurance benefits, which is being finalised by a committee of the Union labour ministry to be sent for the Cabinet’s nod, people aware of the development said.

Gig workers, the backbone of the so-called platform economy, which comprises companies operating in everything from food delivery to ride hailing, will have access to pensions under the plan whereby aggregators will contribute a defined share of revenue towards a retirement income fund for the workers, one person involved in the process said.

Platform-based firms and aggregators are likely to contribute between 1-2%, although the quantum is yet to be finalised, this person added, asking not to be named. All gig workers registered on the Centre’s e-Shram portal, a national database for informal workers, will be covered under the scheme.

A booming gig economy in the world’s fifth-largest economy is likely to employ nearly 25 million workers by 2030, according to estimates by the Niti Aayog, the state-run think tank. Its size is estimated to touch $455 billion by the same year , expanding at a compounded annual growth rate of 17%, according to a recent Associated Chambers of Commerce & Industry of India report.

The social security fund for gig workers is likely to be run by the Employees’ Provident Fund Organisation (EPFO), the state-backed retirement income manager that handles the social-security accounts of about 70 million formal-sector employees.

“The labour minister’s (Mansukh Mandaviya) view is that rather than have a new entity, EPFO should run the gig workers’ fund,” a second person said on condition of anonymity.

Workers employed in the gig sector and registered in the e-Shram portal will also get health-insurance cover of ₹5 lakh under the existing Ayushman Bharat Jan Aarogya Yojana, which provides hospitalisation benefits through a network of nearly 22000 empanelled health facilities.

The labour ministry formed a committee headed by an additional secretary-ranked official in November 2024 to frame a social-security scheme for gig workers, which included representatives from aggregators such as Swiggy, Zomato and Urban Company.

Zomato, Uber, Ola and Amazon didn’t immediately respond to HT’s requests for a response.

The Code on Social Security 2020, one of the four new labour laws passed by the Modi government between 2019 and 2022, mandates benefits for gig workers.

For this, section 2(35) of the code defined a gig worker as a “person who participates in a work arrangement and earns from such activities outside of a traditional employer–employee relationship”.

The code provides for framing of measures for gig workers and platform workers on “matters relating to life and disability cover, accident insurance, health and maternity benefits, old age protection” etc. It also mandates the setting up of a social security fund to cater to platform workers.

To be sure, the code is yet to be implemented.

Major platforms and aggregators have enrolled their workers on the e-Shram portal after being asked to by the labour ministry last year.

The portal has nearly 300 million people registered on it, including slightly over 70,000 gig workers after the onboarding of 10 major e-commerce platforms such as Zomato, Blinkit and Uber.

Labour minister Mandaviya has held several rounds of talks with representatives of firms such as Urban Company, Swiggy and Instamart, Zomato and Blinkit, Porter, Even Cargo, Amazon, Uber and Ola to hammer out the scheme.