India’s Booming Gig and Platform Economy: NITI Aayog


    In News

    • Recently, a report was released by NITI Aayog titled ‘India’s Booming Gig and Platform Economy’ which will provide insights into the possibilities of the Gig sector, as well as a road map for further research and analysis.
      • The report estimates that 77 lakh workers were engaged in the gig economy in 2020–21.

    Major Highlights of the Report

    • Definition of Gig worker:
      • The report defines a gig worker as “someone who engages in income-earning activities outside of a traditional employer-employee relationship, as well as in the informal sector”. 
      • Additionally, it defines those working with platforms such as Ola, Uber, Dunzo, Swiggy, Zomato and Urban Company as platform workers. 
    • Size of the sector:
      • As per the report, 47 percent of gig work currently is in medium-skilled jobs, 22 percent in high-skilled, and about 31 percent in low-skilled jobs.
      • Drivers and sales persons accounted for more than 52 percent of the gig workers in 2019-20.
      • When workers are classified by industries, the report said that 26.6 lakh gig workers were involved in retail trade and sales in FY20, and about 13 lakh were in the transportation sector
      • Roughly 6.2 lakh persons were in manufacturing and another 6.3 lakh in the finance and insurance activities.
    • Job generation potential:
      • India’s gig workforce, estimated to be at 77 lakh in 2020-21, is expected to go up to 2.35 crore by 2029-30.
      • It even goes on to term platform labour as the “Fourth Industrial Revolution”.

    • Challenges Highlighted for Gig workers
      • Urban factor:
        • Accessibility makes gig work a largely urban phenomenon, as access to the internet and digital technology can be a restrictive factor.
      • Job and income insecurity:
        • Gig workers often are not employees and hence do not receive income security and social protection. 
      • Safety issues:
        • Along with it comes occupational safety and health risks including road safety, theft and physical assault, discrimination or harassment. 
        • This is amplified for women in app-based taxi work and delivery.
      • Work pressure:
        • Another challenge listed is that workers may be under pressure due to algorithmic management practices and performance evaluation on the basis of ratings.
      • Regulatory framework:
        • India lacks a framework that balances the flexibility offered by platforms while also ensuring the social security of workers. 
        • Currently, they work in a regulatory gray area.
    • Report recommendations for the gig sector:
    • Code on Social Security:
      • For the government, civil society, businesses and non-profits, Niti Aayog suggested universal coverage of platform workers through the Code on Social Security
      • As written in the Code on Social Security, the report recommends extending social security measures to gig workers and their families. 
      • I also suggests paid sick leave, health access and insurance year-round, occupational disease and work accident insurance, retirement/pension plans and other contingency benefits.
    • Boost to platform industry:
      • NITI Aayog suggests launching an initiative to accelerate platformisation, modeling it on schemes such as Startup India. 
      • It asks for regulations to be streamlined and simplified, and licensing requirements for aggregators to be reconsidered. 
      • It also suggests that entry barriers in mobility-based platform companies be eased. 
    • Businesses associated with the platform Industry:
      • It also aims at supporting businesses and entrepreneurs that are associated with platforms. 
      • It suggests extending interest-free business advances and delayed payback periods to protect gig workers, self-employed persons and small businesses who are associated with platforms.
    • Hyperlocal deliveries:
      • It asks for the widespread adoption of hyperlocal deliveries using two-wheelers to be encouraged.
    • Women in the gig economy:
      • It recommends that companies carry out gender sensitisation and accessibility awareness programmes for workers and their families, particularly to promote the rights of women and persons with disabilities
    • Skilling:
      • It is recommended that skill gaps be bridged by carrying out assessments periodically and partnering with platform businesses for onboarding skilled women and persons with disabilities. 
      • It also suggests making aggregate data public to enable decision-making.

    Gig Economy

    • About:
      • The gig economy is about individual workers carrying out tasks for clients through the intermediation of a platform attributing those tasks and taking care of the transfer of payment on a task-by-task basis.
    • Significance:
      • The gig economy is based on temporary, or freelance jobs, often involving connecting with clients or customers through an online platform
      • The gig economy can benefit workers, businesses, and consumers by making work more adaptable to the needs of the moment and the demand for flexible lifestyles.
        • Time flexibility: Workers operating in the gig economy are allowed to work any of the hours they desire.
        • Income flexibility: It is an increasingly attractive market due to the sheer flexibility that allows individuals to earn extra income.

    Platform Company

    • About:
      • A platform company is a business that creates foundational technology upon which other companies are born and scaled. 
      • Companies like Apple, Google, Amazon and Alibaba have used the model to grow exponentially and grab significant market share from established firms. 
      • Platforms represent a big change in the way industries have traditionally been organized.
    • Significance:
      • Platform companies offer flexibility and choice of labour to all workers in general, and women in particular, empowering them to monetise their idle assets when and where they want 
      • It makes them an attractive opportunity for women and persons with disabilities.
        • Women are more likely to take up platform jobs after their education and marriage.
    • India’s Gig Sector:
      • An estimated 56% of new employment in India is being generated by the gig economy companies across both the blue-collar and white-collar workforce.
      • The gig economy can serve up to 90 million jobs in the non-farm sectors in India with a potential to add 1.25% to the GDP over the “long term”.
      • As India moves towards its stated goal of becoming a USD 5 trillion economy by 2025, the gig economy will be a major building block in bridging the income and unemployment gap.


    Source: TH