Mains
Economics
Gig Economy in India
Context
Recently, Karnataka introduced a bill called the Draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024.
About
Who are Gig Workers?
● A Gig Worker is an employee whose relation with the employer is different from the conventional employer-employee arrangements.
● Standard workers have a long-term employer-employee relationship in which the worker is paid by the hour or year, earning a wage or salary.
● However, gig work tends to be temporary or project-based work in which the workers are hired to complete a particular task or for a certain period of time.
● Gig Workers may include freelancing, temp agency work, self-employment, and subcontracted work.
Classification of Gig Workers in India
1. Independent Contractor
Independent contractors are those gig workers who are not employees of a company but they work for a specific period on a project with the understanding that the project will end and the job will end.
2. Self-Employed Employee
Self-employed workers are those Gig workers who don't have an employer-employee relationship with any company and are responsible for their work and expenses.
3. Platform Worker
Platform workers are those gig workers who work on apps and platforms such as Uber, Lyft, or Fiverr. These workers have general skills that allow them to work on several platforms or in some cases specialized skills and can only work on one platform.
4. Freelancer
Freelancers are those gig workers who work directly with companies that require service. They are given a goal or project to complete and a contract detailing payment details and the project timeline. They manage their billing and tax themselves.
5. Temporary Worker
Temporary Workers are those gig workers who have a set end date for their employment with a company. Some of the temporary workers work in holidays and leave the company after the holidays ends. Some temporary workers work on weekends.
6. Side Gig
Side gigs are working gigs workers who can be part of the gig economy for full-time and independent workers. These workers usually do a complete job of typical 9-5 jobs and after that do their gig job.
NITI Aayog’s Classification of Gig Workers
The NITI Report 2022 classifies gig workers as those individuals who engage in work outside the traditional employer-employee setup with two distinct subsets:
- Platform Workers and
- Non-Platform Workers.
Platform workers utilize online algorithmic matching platforms like Amazon or Uber to connect with customers, while non-platform workers encompass those in sectors such as construction, day jobs, and other technology-independent temporary work.
Analyzing the State of the Gig Economy in India and the World
● India is currently the fifth-largest contributor to the gig economy labour market. It has currently 15 million qualified workers who are working in the gig economy.
● India currently provides 40% of the world's freelance labour (freelance gig workers) which is accessible globally.
● The United States, China, Brazil, and Japan are the four top gig economies of the world.
● The gig economy is on the rise globally and is expected to expand at a CAGR of 14% to US$455 billion by the end of 2024.
● NITI Aayog Report, 2022: According to NITI Aayog’s report on ‘India’s Booming Gig and Platform Economy’, the share of gig workers in total workers increased from 0.54% in 2011-12 to 1.33% in 2019-20.
● NASSCOM Report: According to a report by NASSCOM in 2022, the Indian gig workforce is expected to expand to 23.5 Mn workers by FY30 from 7.7 Mn in FY21.
● Gig workers will form 4.1% of the total workforce in India by FY30, from 1.5% in FY21.
● Approximately 22% of the jobs of these Gig Workers are high-skilled, 47% are medium-skilled, and ~31% are low-skilled.
Significance of the Gig Economy
Cheaper and Efficient Labour
The gig economy produces cheaper, more efficient and flexible services that can offer consumers a unique and fast alternative to regular, standardized business.
Cost-Effectiveness
● The Gig Economy minimizes the costs and expenses. This is because businesses can hire off-site workers which significantly reduces the need to maintain expensive workspaces and large offices.
● Further, hiring independent contractors eliminates large expenses such as employee benefit packages, retirement plans, and paid sick leaves.
Eliminates the middlemen
● The gig economy provides a labour force that can directly match the company to the freelancer.
● This removes the hassle of dealing with a middleman throughout the hiring process, thus, making it easier to find people to complete the job.
Output Production
● Individuals who are interested in accumulating extra income are attracted to applying for a position that offers a unique work schedule.
● Such flexibility directly impacts employee motivation, which in turn, creates a positive correlation to output production.
Advantages for the Employees/Gig Workers
Independence
● Independent contractors in the gig economy are not required to work in offices, rather, they work in their own spaces.
● It varies from someone working in a home office writing articles to someone working from their car driving for Uber. It provides them independence to travel or do other work and at the same time do the gig work.
Flexibility
● Workers who operate in the gig economy are allowed to work any number of hours which they desire.
● A task will be given to a worker with an end date, but when they work on it is completely up to their discourse.
Income
The gig economy is an increasingly attractive market due to the sheer flexibility that allows individuals to earn extra income.
Disadvantages of a Gig Economy
Lack of Worker Commitment
● Gig Economy workers are not as invested in their organization as if they were hired full-time.
● Further, the gig economy companies are generally not known to incentivize their employees leading to the creation of loyalty issues.
● It reduces the likelihood of further work and decreases motivation to work overall.
Ethical Issues
● Organizations that operate in a gig economy are criticized for the unethical practices performed by them.
● Their employment is casual which does not offer benefits, and generally does not offer competitive wages.
Disadvantages for Workers
Lack of Benefits
● Organizations which operate in a gig economy do not provide benefits to their workers.
● Independent contractors and freelancers are not completely considered “employees” of the business.
Personal Expenses
● Organizations within the gig economy are not required to cover personal expenses such as cost of Internet data used by the employees.
● It also does not provide the rent of the personal spaces which are used by the individuals for work.
Isolation
Gig Works can create a feeling of isolation, which negatively affects the production and mental health of the individuals.
Steps taken in India to solve Gig Worker's Problems
● The state of Rajasthan passed legislation named the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023. It aimed to ensure the welfare of the gig workers.
● A similar bill is being currently prepared by the state of Karnataka to address the issues of Gig Workers in the state.
Draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024
● Grievance Redressal Mechanism: The bill provides a grievance redress mechanism for gig workers such as cab drivers, delivery people, carpenters, plumbers and repairers. Bill allows gig workers to seek grievance redressal under the Industrial Disputes Act of 1947
● Recognition of Formal Rights: The bill aims to bring formal rights and social security to the Gig workers. It also aims to protect workers from arbitrary termination and aims to ensure basic minimum social security for them.
● Inspection Rights: The Bill introduces wide-ranging powers of inspection to the state government including algorithms, contracts, and day-to-day operations of platforms.
● Notice Period: Companies are required to include a notice period to be served to gig workers and grounds for termination.
● Cancellation of Orders: It also includes the number of orders gig workers can cancel per week.
● Welfare Fee: The bill states that welfare fee should be levied at 1-2 per cent of the payout to the gig worker per transaction or 1-2 per cent of the state-specific net revenue of the aggregator (whichever is higher), capped at a maximum of Rs 1-2 per transaction.
Limitations of the Bill
● Ease of Doing Business: The bill has invoked the ‘Inspector Raj’ while it provides for the inspection of algorithms, contracts, and day-to-day operations of platforms. It further requires gig workers to seek grievance redressal under the Industrial Disputes Act of 1947, essentially equating them with ‘workmen’. (Regular Employee). These are in contravention of the labour codes and will impact the environment of Ease of doing Business.
● Equating with Regular Employees: Some of the provisions of the bill try to create a parallel system of employment to the standard Employee-Employer relationship by equating gig workers to full-time employees. Further, the proposed personal liability for directors and employees in cases of offences is overly harsh.
Conclusion
The gig economy in India is increasing at a fast pace with India being the 5th largest supplier of gig workers operating from India. The lack of welfare schemes, incentives and several other benefits which the gig workers lack becomes a roadblock in the welfare of these Gig Workers. It will surely pose a ‘Social Security’ problem in India when India’s demographic dividend reduces and the current workers will become older or retire. Hence, the bill passed by the Rajasthan government and the current bill by the Karnataka government is a right step towards ensuring social security net for such workers.
Source: The Hindu, Business Standards, NITI Aayog
Prelims
Art and Culture
Kharchi Puja
Context
Recently, Kharchi Puja was celebrated in the state of Kerala with a great Pomp and Show.
About
● The word Kharchi is derived from Khya, which means “Mother Earth.” it is also formed from ‘Khar’ for sin and ‘Chi’ for purification. It implies that puja is conducted to clean the kingdom’s people of their sins.
● Kharchi Puja is a famous festival which is celebrated in the Indian state of Tripura and by Tripuri people outside the state.
● It is celebrated on the Shukla Paksha Ashtami (eighth lunar day) of the month of Ashad according to the Hindu calendar. It is celebrated in July.
● The Puja is celebrated with the worship of the fourteen gods that make up the Tripuri people’s dynasty deity.
● Kharchi Puja Festival is a week-long royal Puja that takes place on the eighth day of the new moon.
Source: The Hindu
Prelims
Economy (Schemes)
PM-SHRI Scheme
Recently, three states, Delhi, Punjab and West Bengal declined to participate in the PM SHRI Scheme.
About
PM SHRI (Prime Minister's Schools for Rising India)
Nodal Agency: Department of School Education and Literacy
Nodal Ministry: Ministry of Education
PM SHRI is a centrally sponsored scheme by the Government of India which aims to develop more than 14500 PM SHRI Schools managed by Central Government/State/UT Government/local bodies.
● These Schools include KVS and NVS in which a number of provisions have been made such as:
❖ Providing a safe and stimulating learning environment
❖ Wide range of learning experiences
❖ Good physical infrastructure and
❖ Appropriate resources are conducive to learning.
● Exemplar Institutions: It aims to upgrade at least 14,500 government schools into “exemplar” institutions to showcase the implementation of the National Education Policy (NEP) 2020. More than 20 lakh students are expected to be the direct beneficiaries of the scheme.
● Period: The Scheme is proposed to be implemented over 5 years w.e.f. 2022-23 to 2026-27.
● Budget: It is a centrally Sponsored scheme in which the centre will bear 60% of the expenses while states will bear 40%. A total budget of over Rs 27,000 crore for the next five years has been allocated for the scheme.
Source: The Hindu, PM Shree Website
Questions
1. Who are Gig Workers? Discuss the classification of different types of Gig Workers.
2. Discuss the advantages and disadvantages of the Gig Economy.
Prelims
1. Consider the following statements with reference to the Gig Economy;
1) Gig Workers are entitled to get bonuses and other complimentary benefits like standard workers.
2) Gig Workers can work remotely and are hired according to contractual terms.
3) Freelancers and Platform workers are covered under the Gig economy.
Which of the following statements is/are Correct?
A. One Only
B. Two Only
C. All Three
D. None
Answer: B
2. Consider the following statements with respect to Kharchi Puja:
1) It is celebrated in Telangana.
2) The word Kharchi is derived from Khya, which means “Mother Earth.
Which of the following statements is/are Correct?
A. 1 Only
B. 2 Only
C. Both 1 and 2
D. Neither 1 nor 2
Answer: B
3. Consider the following statements with respect to PM-SHRI Scheme:
1) It is being implemented by the Department of School Education and Literacy.
2) It aims to open new Schools with state of art technology according to National Education Policy.
3) The Scheme is proposed to be implemented over 10 years.
Which of the following statements is/are Correct?
A. One Only
B. Two Only
C. All Three
D. None
Answer: A
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