The Hindu Editorial Analysis- 17th May 2023 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Why in News?

The Chief Minister of Rajasthan announced earlier this year that the State would set up India’s first welfare fund called the Rajasthan Platform-Based Gig Workers Social Security and Welfare Fund. This is the first real instance of a regulatory move to unburden gig and platform workers’ vulnerabilities since the Code on Social Security was passed in 2020. The code came amid the COVID-19 pandemic when platform workers became the backbone of metropolitan logistics, acting to serve customers, and working with and for State governments in their food relief schemes.

What is the new legislation proposed by the Rajasthan Government?

• The Rajasthan Platform-based Gig Workers (Registration and Welfare) Bill 2023 is aimed at ensuring the welfare of gig workers and introducing strict provisions to punish errant aggregators.
• The bill has proposed to set up a Platform-based Gig Worker’s Welfare Board that would function as a mothership for the over three lakh employees of online service providers in the state.
• The Board would also be responsible for developing welfare policies and hearing the grievances of workers who had been hired on a piece-rate basis, i.e. payment depending on the units of work performed.
• According to the Bill, all platform-based workers in the state would be automatically registered with the Board regardless of their employment period with the respective platform.
• A unique ID with a three-year validity would be generated by the Board for each worker registered with one or more aggregators in the state.
• This would help workers obtain benefits from government welfare schemes such as the PM Sambhal scheme, which provided old age pensions, and also enabled them to lodge complaints over payment disputes and other issues.
• The Government had also provided a ₹200 crore seed fund for the Board to begin functioning.
• The Bill empowered the Board to determine the quantum of cess to be paid by each aggregator towards the social welfare fund. The cess was a percentage of each digital transaction by consumers that took place on the platform.
• The Bill was also expected to include punitive provisions for aggregators who did not adhere to the rules including barring them from functioning in the state.
• The Bill also contained provisions for integrating the data of gig employees with the Board and sharing the data of all transactions that took place on the platform.
• Platforms that violated these clauses could be fined ₹10 lakhs for the first offence and up to ₹1 crore for further offences.
• According to the Bill, the Board could also recommend the temporary or permanent suspension of the operations of an online service aggregator in the state.

Why was the Bill necessary?

• The Bill, which was the first of its kind in India was necessary because of the lack of an employer-employee relationship in the gig economy.
• The aggregators had described the gig workers as partners rather than employees, which absolve them of their responsibility of providing social security and other benefits to the workers.
• Despite their being described as business independent contractors, the gig workers did not possess much control over their conditions of employment.
• The Bill was aimed at helping to provide security benefits to the workers, regulate the sector and ensure that they were not exploited by the aggregators.
• However, there was a lack of clarity on the specificness of the policies introduced by the Board and how they would benefit the workers.

Status of the Gig Economy

• The gig economy which had developed on the basis of the smartphone revolution in the country was a source of employment for around 8 million people in the country.
• The job markets in India in the previous decade had been characterized by unemployment and informal labour.
• The emergence of the gig economy was especially beneficial for the youth between the ages of 20 and 35 and migrants as it provided them with a means of securing finances and flexible working hours.
• India’s gig economy was expected to grow as a result of the increasing use of smartphones and the reliance on online apps for daily services such as groceries.
• According to projections by the ICRIER, the Indian gig economy was expected to grow by 115% by 2023.
• ASSOCHAM had projected that the Indian gig economy was expected to be worth $455.2 billion by 2024 on the basis of a CAGR of 17%.
• However, the increased competition between platforms and the availability of cheap labour had led to decreased incentives for gig workers such as increased workload, uncertain work hours and insufficient pay.
• The description of the gig workers as partners by aggregators has led to a loss of social security benefits and related benefits.
• The increasingly unfair conditions of employment faced by the gig workers have led to the increased strikes called by them demanding fairer terms of employment.

Similar provisions

• The Madhya Pradesh Government has expressed interest in introducing similar legislation to protect the gig workers employed in the state.
• Thailand and Malaysia have enacted laws which ensure that gig workers were entitled to health and accident insurance as well as other social security benefits which were financed by a 2% levy on each transaction.
• The Social Security Code introduced by the Union Government as one of the four new labour codes has also provided social security benefits for gig workers. However, the scheme had not yet been properly implemented.

Conclusion

• The gig economy was a fast-growing industry capable of employing millions of youth and consequently providing a boost to the national economy.
• However, employees in the sector were affected by unfair employment, variable and poor wages and denial of social security.
• The proposed legislation by the Rajasthan government could serve as a model to be emulated by other states in order to support the 80 lakh gig workers in India.