Here's how India's gig economy and its $5-trn goal by 2025 are connected

By upgrading or augmenting skills, equipping modern tools for better efficiency, people at gig jobs can earn more, some becoming even micro-entrepreneurs

India is experiencing a seismic shift in its work culture today. Young people don’t want to be stuck in jobs where they have to work long hours for minimal pay. These individuals are finding sustainable employment opportunities in the country’s rapidly growing gig economy. Some more aspirational are becoming micro-entrepreneurs.
 

India has always had a large reserve of informal gig workers. The pandemic pushed a lot of them out of work. Just between March and April 2020, CMIE data showed that a whopping 113.6 million people lost their jobs. 
 

As people went searching for new jobs, with many industries being down in the doldrums, the gig economy became their primary focus. A joint report by the Boston Consulting Group and Michael & Susan Dell Foundation stated that the gig economy can service up to 90 million jobs in India’s non-farm economy alone. This translates to over $250 billion in volume of work and may contribute an incremental 1.25% to India's GDP.
 

There never has been a more urgent time than now to understand the gig economy verse.
 

The flexi world
 

Gig economy includes all platforms that hire independent workers across sectors like e-commerce, technology, food & beverages, home services among others. As per an ASSOCHAM report, there are 15 million freelance or gig workers across India.
 

The growth of social commerce in the country affects the employment opportunities for these millions of gig workers, positively. A 2019 World Bank report had pointed out that digital platforms scale up faster and at lower cost compared to traditional companies. The penetration of online retail in the report's year was at 4.7%. It is expected to reach 10.7% by 2024. 
 

With the presence of platforms such as Amazon, Flipkart, Uber, Ola, and Urban Company, India has emerged as one of the largest countries for flexi-staffing in the world. 
 

Simply put, gig jobs have simplified the employment landscape of the country, changing its architecture for the better.

Why do gig roles work better?

Unlike regular office jobs, gig jobs offer a higher potential to earn because compensation is linked directly to the number of order requests completed. This means that workers can plan their finances and personal life balance better. Either by putting in additional hours for more pay or taking time off once their weekly earnings target is completed. By upgrading or augmenting skills, equipping modern tools for better efficiency, they can earn more, some becoming even micro-entrepreneurs. 

Another aspect of the gig jobs, they work better for women. Often, with their household duties, a 9-5 job becomes hard to manage for them. Gig jobs that offer flexible hours have led to an increase in the number of women joining the labour force. According to The Economic Survey, the labour force participation of females between 15-59 years of age grew to 26.5% in 2018-19 from 25.3% in 2017-18.  

Most successful start-ups in India have been welcomingly receptive to this change. For example, Zomato is looking to increase female presence in the delivery fleet to 10% by the end of the year. Urban Company has women workers across service roles, including beauticians and even an RO technician, even sending its women employees abroad to experience the international markets and techniques.

The safety net debate

Over the past few months, a debate has emerged about the lack of essential work benefits within this economy. In September 2020, the Code on Social Security bill was pushed in the Parliament. This bill, once implemented, will add a layer of protection needed by the gig workers.  

Under this, gig workers will be eligible for social security benefits under the unorganised worker category. This includes health and insurance benefits. In addition, a contribution of 1-5% of an aggregator’s turnover would be payable to gig workers. A Social Security Fund will also be established to offer protection against death and disability as also old-age benefits. 

Many individual platforms have already been taking steps to provide their workers with the necessary benefits. Urban Company, for instance, has reduced the commissions it charges from workers and allowed up to two no-penalty cancellations. But the bill makes benefits mandatory rather than a choice.

Technology’s impact on jobs

In the coming years, technology could replace some mundane tasks at these digital-first platforms. But the demand for human workers would still increase. The BCG-Dell Foundation said in its report that in the near-medium term, nearly 24 million jobs could migrate to technology-based gig platforms. But it also predicts the creation of 1 million new jobs over the next two to three years by aligning the needs of employers and workers.  

As India moves towards its stated goal of becoming a $5 trillion economy by 2025, the gig economy will be a major building block in inclusively achieving the above goalpost, bridging the income and unemployment gap.

The author is former chairman of Competition Commission of India, executive director for India at World Bank