The Union government of India has recently introduced a groundbreaking social security scheme tailored specifically for gig workers. This initiative is designed to extend vital benefits such as health insurance, unemployment support, maternity benefits, and accident injury coverage to those who form a significant part of the country’s informal workforce.
Approximately 7.7 million gig workers in India will be eligible for this scheme. To avail of the benefits, these workers must register on the e-Shram portal, which serves as the government’s database for informal labor.
The scheme is set to offer various social security benefits, including:
These benefits will be administered through the Employees’ State Insurance Corporation (ESIC).
The introduction of this scheme is a response to growing demands from gig workers across multiple states, many of whom have been advocating for enhanced social protection and welfare benefits. The initiative also seeks to address the increasing number of gig workers, projected to reach 23.5 million by 2029-30, according to a NITI Aayog report.
Many gig workers in India, such as delivery executives, rely on this type of work as their primary source of income. However, their earnings can be unpredictable, fluctuating based on factors like order volume, location, and market demand. Establishing a social security net is essential as it offers financial stability and protection in emergencies or during income loss due to unforeseen circumstances.
Under the draft policy, aggregators—such as food delivery and ride-hailing platforms—will be mandated to contribute 1-2% of their revenue to a social security fund. The government is also expected to match this contribution, fostering a collaborative effort to support gig workers.
Many gig platforms express concerns that contributing to the social security fund could adversely affect their financial health, especially since numerous platforms are currently operating at a loss. Companies worry that these added costs might be transferred to consumers, leading to increased prices for services such as food delivery and ride-hailing.
If gig platforms are required to allocate a portion of their revenue to the social security fund, they may ultimately pass these costs onto consumers. This could result in price increases for services, potentially affecting customer demand and the overall profitability of these platforms.
This social security scheme represents a critical advancement in providing a safety net for gig workers, many of whom come from lower-income backgrounds and rely heavily on these jobs. The initiative aims to mitigate the financial vulnerabilities associated with income instability and inadequate protection.
The rollout of this social security scheme is anticipated to coincide with the full implementation of the Social Security Code, although the government has yet to confirm specific timelines.
“A nation’s greatness is measured by how it treats its weakest members.” - Mahatma Gandhi
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