UPSC Essentials: Reports, policies and data on your tips- NITI Aayog’s report on gig economy

Essential data, facts and figures from reports, policies, schemes and important documents for UPSC-CSE.

India’s Booming Gig and Platform Economy‘– Report of NITI Aayog

Cellabus-

Prelims: Economic and Social Development

Mains: GS I and II (Social issues, women and vulnerable section), GS III ( Indian Economy and issues relating to planning, mobilisation of resources, growth, development and employment)

(Relevance: For prelims: Reports and indices are essentials for facts and recommendation. For mains: Important for a few factual data to support your answers, recommendations of the reports as fodder for answers in economy, GS I and II women issues etc. Good points for essay on women and economic themes too. Also, questions around gig economy have high probability in exams.)

Why in news?

— NITI Aayog pitched for incentives to draw more women into the gig economy in its report, ‘India’s Booming Gig and Platform Economy’.

— In an attempt to increase the participation of women in the gig economy, the NITI Aayog has proposed fiscal incentives like tax breaks or startup grants for companies with about one-third of their workforce as women and people with disabilities (PwDs).

What is gig economy?

The economy based on flexible, temporary, or freelance jobs, is called gig economy. It may involve 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.

—The gig economy can have downsides due to the erosion of traditional economic relationships between workers, businesses, and clients.

Who are gig workers?

Gig workers are typically hired by companies on a contractual basis and are not considered their employees. As a result, they do not receive some of the benefits that an on roll employee of the company may have — this means that they often do not receive benefits like paid sick and casual leaves, travel and housing allowances, and provident fund savings, among other things.

—Gig workers can be broadly classified into platform and non-platform workers. Platform workers are those whose work is based on online software apps or digital platforms. Example: those whose work is based on online software apps or digital platforms such as food aggregator platforms Zomato, Swiggy, Ola, and others.

—Non-platform gig workers are generally casual wage workers, working part-time or full-time.

Note: While platform companies have created avenues of employment, it has often been marred by low wages, unequal participation, and a lack of gender possibility for upward mobility within an organisation.

How big is the workforce engaged in the gig economy?

The report estimates that more than 7.5 million workers were engaged in the gig economy in 2020-21. This could grow to 23.5 million workers in the next eight years, making up for 4.1 per cent of total livelihood in India.

—According to the report, at present about 47 per cent of the gig work is in medium skilled jobs, about 22 per cent in high skilled, and about 31 per cent in low skilled jobs. Gig workers can be broadly classified into platform and non-platform workers.

What are the challenges of the gig economy according to the report?

—According to the report, the challenges of the gig economy sector are- Lack of job security, irregularity of wages, uncertain employment status for workers etc. As independent contractors, platform workers cannot access many of the workplace protections and entitlements.

What are the key points included in the report regarding women and PwDs?

— A survey conducted across urban centers of India revealed that women are more likely to take up platform jobs after their education and marriage.

Female labor force participation in India has remained low, oscillating between 16 per cent to 23 per cent in the last few years.

— Persons with disabilities, who make up 2.11 to 10 per cent of India’s population, have a labor force participation rate of 36 per cent.

— Structural barriers like access to education and lack of skill have hindered the participation of the two demographic groups in the country’s labor force.

— Fiscal incentives such as tax-breaks or startup grants may be provided for businesses that provide livelihood opportunities where women constitute a substantial portion (say, 30 per cent) of their workers. Likewise, a platform with high accessibility or high degree of participation of PwDs too may be rewarded with fiscal incentives.

— Apart from incentivising platforms that focus on recruiting women workers, the report also recommended that businesses have a higher share of women managers and supervisors in the organization to ensure that communication to workers does not perpetuate gender stereotypes.

— However, according to the report, platform companies offer flexibility and choice of labor to all workers in general, and women in particular, empowering them to monetise their idle assets when and where they want — a benefit missing in traditional employment sectors — making them an attractive opportunity for women and persons with disabilities.

— The report suggests that companies carry out gender sensitisation and accessibility awareness programs for workers and their families, particularly to promote the rights of women and persons with disabilities. It also suggests partnering with various stakeholders to upskill women and disabled persons.

What does the report say on social security measures?

—The report also recommended that firms adopt policies that offer old age or retirement plans and benefits and other insurance cover for contingencies such as injury arising from work that may lead to loss of employment and income.

—Such plans and policies may be uniquely designed by a firm, in partnership with insurance companies, or could be designed and offered in collaboration with the government, as envisaged under the Code on Social Security, 2020. A social security cover out of a corpus fund can also help gig workers in case of contingencies, it said.

—The report said businesses should consider providing income support to workers as it would be a “critical step in providing assured minimum earnings and social security from income loss in the wake of uncertainty or irregularity at work”.

—It also suggests offering paid sick leave to workers apart from insurance cover.

What does the report say about the access to finance?

—Access to institutional credit could be enhanced through financial products specifically designed for platform workers and those interested in set up their own platforms.

—Financial technology companies can be leveraged to provide cash flow-based loans to workers as against collateral-based loans, thereby catering to the needs of those new to credit. Special emphasis may be placed on access to formal credit for women and persons with disabilities.

Why are Niti Aayog’s recommendations significant?

— While platform companies have created avenues of employment, it has often been marred by low wages, unequal gender participation, and a lack of possibility for upward mobility within an organisation. This has triggered protests from workers at companies like Swiggy, Zomato, Ola, Uber, and Urban Company, among others.

(source: pib.gov.in, investopedia.com)

Point to ponder: With the “platformization” of work, India requires a framework that balances the flexibility offered by platform firms while also ensuring the social security of workers. Discuss.

MCQ (attempt after reading the article)

Which of the following statement is incorrect according to NITI Aayog’s ‘India’s Booming Gig and Platform Economy’ report?

a) Female labor force participation in India has remained lower than that of Persons with disabilities.

b) Women are more likely to take up platform jobs after their education and marriage.

c) Platform companies offer flexibility and choice of labor to all workers in general, empowering them to monetise their idle assets when and where they want.

d) Gig workers in low-skilled jobs are more than the gig workers in high-skilled and medium-skilled jobs.

Answer for the previous MCQ:

UPSC Essentials: One word a day- Psyche – (d)

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