13 Jan 2023 Status of Gig Economy in India
Status of Gig Economy in India
This article covers “Daily current events “and the topic is about ‘Gig economy’ which is in news, it covers the Indian Economy” In GS-3, and the following content has relevance for UPSC.
For Prelims: About Gig Economy in India, Gig workers
For Mains: GS-3, Issues associated with Gig economy, Social security for Gig worker
About:
The trend of people working temporary or flexible jobs, frequently through online platforms like Uber, Ola, Swiggy, and Zomato, is known as the “gig economy” in India. Due to the increased flexibility and independence, it provides for individuals, as well as the potential cost savings for employers, this form of work has become more and more popular in recent years.
Concerns exist over the gig economy workers’ lack of benefits and job stability, though. India’s gig economy is anticipated to expand more in the future, but in order to safeguard employees’ rights and guarantee fair treatment, it should also be supported by laws and other policies from the government.
What does “gig economy” mean
- In a gig economy, businesses contract with independent workers for brief assignments and temporary roles are popular.
- The term “gig worker” refers to a person who performs work or takes part in a gig work arrangement and makes money from such activities outside of the typical employer-employee relationship.
- 15 million people are employed in India’s gig economy, which includes sectors like software, shared services, and professional services, according to a report by Boston Consulting Group.
India’s position:
- The gig economy industries, which employ both blue-collar and white-collar workers, are thought to be responsible for 56% of new jobs created in India.
- While the gig economy is common in India’s blue-collar industries, there is also an increasing need for gig workers in certain white-collar positions, such as project-specific consultants, salesmen, web designers, content writers, and software engineers.
- Up to 90 million employment in India’s non-agricultural industries might be supported by the gig economy, and over the “long term,” this could increase GDP by 1.25%.
- The gig economy will play a significant role in closing the income and unemployment gap as India draws closer to its declared aim of having a USD -5 trillion economy by 2025.
- A report titled “India’s Booming Gig and Platform Economy” was just released by NITI Aayog.
- The report projects that by 2029–30, India’s gig employment will increase to 2.35 crore.
- According to the research, the gig economy employed 77 lakh (7.7 million) employees in 2020–21. They made up 1.5% of India’s overall labour force or 2.6% of the non-agricultural workforce.
India’s Gig Economy’s Growth Factors:
Gig Economy
- Demand for flexible work is rising, which makes the gig economy particularly appealing to Indian employees seeking flexible work schedules that let them manage their personal and professional lives.
- Demographic factors: The vast and growing number of young, educated, and ambitious Indians who are looking to improve their livelihoods through side income creation is another element driving the gig economy.
- E-commerce expansion: The rapid expansion of e-commerce in India has significantly increased demand for delivery and logistics services, which in turn has fueled the expansion of the gig economy in that country.
- Internet and mobile technology are on the rise: It has been simpler for employees and businesses to connect through online platforms because to the increasing use of smartphones and the availability of high-speed internet, which has facilitated the rise of the gig economy.
- Economic Liberalization: Increased competition and a more open market as a result of the Indian government’s economic liberalisation policies have fueled the expansion of the gig economy.
Concerns related to the Gig Economy in India:
- Lack of Employment and Social Security: Many gig workers in India aren’t protected by labour laws and aren’t eligible for benefits like health and retirement plans.
- Furthermore, gig workers frequently may not have the same level of protection as regular employees in the event of an accident or illness.
- The gig economy mainly relies on technology and internet connectivity; for individuals who do not have access to these resources, this presents a barrier and worsens income disparity.
- Lack of Information: Policy makers find it challenging to comprehend the extent, scope, and effects of India’s gig economy because there is a dearth of information and study on this sector.
- Exploitation by Businesses: Gig workers in India may not have the same legal safeguards and are frequently paid less than regular employees.
- In an effort to shield themselves from responsibility and avoid paying taxes, some businesses may misclassify gig employees as independent contractors.
- Due to their frequent independence and potential lack of a physical office, gig workers might not have the same social networks and support systems as regular employees.
Way Ahead:
- Clear Regulations: The Indian government should create clear regulations and policies for the gig economy to guarantee that gig workers are protected and that businesses are held responsible.
- Social Security Blanket: To maintain financial security for older workers, the government should make sure that gig workers have access to social security programmes like pension plans and health insurance.
- Additionally, gig workers should have access to all regular employees’ labour rights, including the ability to organise and form unions.
- Education and Training: To improve gig workers’ abilities and boost their earning potential, the government should fund education and training initiatives.
- Encourage fair competition and innovation: The government can promote fair competition by enforcing fair trade laws and by establishing regulations that prevent businesses from misclassifying employees as independent contractors.
- Additionally, by offering tax breaks, money, and other forms of assistance to businesses developing new business models and technology, the government can promote innovation in the gig economy.
- Linking Women’s Empowerment: It’s important to create the necessary social and physical infrastructure to encourage women’s participation in the gig economy.
Source:
Read Current Affairs from Yojna IAS.
No Comments