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The Centre is “grappling” with how to design old-age protection schemes for gig, platform and unorganised workers, a government official said on Thursday, describing it as a new area that has not been tested globally.
The official said that globally, old-age protection has always been thought of in terms of contributory pension schemes. “How do you do that? Is it possible to make it mandatory? How do you design these kinds of things? So, we are grappling with these new issues, which the world has not tested,” the official said, requesting anonymity.
Speaking at an event organised by the Digital Commerce Coalition (DCC), the official noted that most workers in the gig and platform sector are young, and the aim was to secure “not only their present” but also their future.
On why social protection matters to platforms, the official said that when workers are happy and secure, productivity rises, workers stay on a platform and transaction costs fall. “Bringing certainty in the system through these interventions is going to be our challenge area,” he said.
The Code on Social Security, 2020, allows the Centre to frame social security schemes for gig and platform workers, providing life and disability cover, accident insurance, health and maternity benefits, old-age protection and crèches.
The Code also provides for a Social Security Fund for these workers, to be financed by contributions from aggregators such as food-delivery and ride-hailing platforms. Aggregators are to contribute 1-2 per cent of their annual turnover, capped at 5 per cent of the amount they pay to gig and platform workers.
The official compared the current moment to the 1950s, when the provident fund and Employees’ State Insurance Corporation (ESIC) schemes were designed.
“This generation has been given this responsibility to define the course of the future of our Indian economy. Currently, we have that responsibility where we can guide the economy in a particular manner. So, we can achieve the (Visit Bharat) 2047 goal very, very easily,” he said.
The new labour codes, the official said, define “gig worker”, “platform worker” and “aggregator” in law for the first time. “Almost 88 to 90 per cent of our economy is in the unorganised sector. Hardly 10 per cent of our workforce is part of the formal sector,” the official added.
He also described a philosophical shift from the Industrial Disputes Act to the Industrial Relations Code: “There has been a huge transition from dispute to relation.”
The gig and platform market offers enough flexibility to move across jobs, the official said, adding: “Access to this particular job market is much easier than all other conventional job markets. So, barriers are very, very limited.”
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