Gig Economy Explained: Is India Gig-Worker friendly? Regulations, policies, women participation and all you need to know

Gig Economy: There has been a surge in the gig economy as today's workforce is becoming more mobile. As per a report, India's gig workforce comprises 15 million workers employed across industries such as shared services and professional services. With the rise of technology-enabled gig work platforms, over 200 million people are considered part of the gig workforce globally. It also points out the involvement of youth, students, and women in gig work, compared to traditional work arrangements. Here in this article, we will explain everything related to the gig economy.

What is the gig economy?

Despite its widespread appeal and usage, the term ‘gig’ is often used for a wide range of activities, ranging from part-time employment to ‘contract’ labour and on-demand staffing services.

According to Rohit Rathi - co-founder & CEO, KarmaLife -‘gig economy’ is among the most widely used terms in the business world today. 

"A gig economy is a labor market that relies on independent contractors and freelancers rather than full-time permanent employees. While gig work has been around for a while in India, it has gained momentum recently with the emergence of platform-based companies dealing in shared mobility, food-tech, eCommerce and logistics," Rathi added.

Why are gig workers important in India?

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. These figures clearly indicate the importance of the gig working community in the Indian economy. 

Ensuring the comfort and security of this community is investing in a more progressive and prosperous future. Research studies by Boston Consulting Group (BCG) have indicated that participation in the gig economy is higher in developing countries(5-12 percent) versus developed economies(1-4 percent); and most of these jobs are in lower-income job-types such as deliveries, ridesharing, microtasks, care and wellness. These studies further estimate that in 2020-21, 77 lakh (7.7 million) workers were engaged in the gig economy. 

"The gig workforce is expected to expand to 2.35 crore (23.5 million) workers by 2029-30. These findings point to the immense potential and dependability of gig work to create greater livelihood opportunities for lower-income workers, while creating a more inclusive workforce," Rathi said.

What is the average income of a gig worker in India and is this sufficient to live a healthy life?

The median age of Indian gig workers is 27 and their average monthly income is Rs 18,000. Of these, about 71 per cent are the sole breadwinners of their families. Additionally, gig workers operate with an average household size of 4.4, and 60 per cent of them work to support their families, shouldering severe dependency. 

"While their essential expenses are mostly divided between rent (30 per cent), household (68 per cent), education (20 per cent) and medical(24 per cent), there is little to no scope for any savings. As it is obvious, such an unbalanced income can shatter at the first sight of unforeseen trouble. Hence, in order for the average income of gig workers to reach a sustainable level gig workers must be empowered with the right financial tools & services," the co-founder & CEO of KarmaLife said.

What kind of facilities are being provided to these gig workers?

As per industry reports, between digital gig workers, blue-collar workers and formal temps is a projected combined user base of more than 200 million by 2029. While there are some clear benefits of the gig economy like convenience, flexibility, higher unit pay, and greater efficiencies, steps are also being taken to meet minimum wage requirements, worker protection, and consumer rights. In response, governments across the world are working towards regulating work requirements and social protection to ensure parity with other modes of work. 
Consequently, access to institutional credit is being enhanced through financial products that are specifically designed for platform workers. In the wake of these initiatives, venture capital funding, grants and loans from banks and other funding agencies should be encouraged for platform businesses at the pre-revenue and early-revenue stages.

What needs to be done in order to improve the living standards of these gig workers?

Two-thirds of gig workers don't have any post-school education and 79 per cent of them seek to learn valuable skills through gig work. Other issues include job security and regular pay as the top aspirations. To support these expectations, FinTech and platform businesses may be leveraged for providing cash flow-based loans to workers as against collateral-based loans, thereby catering to the needs of those new to credit. 

"Unsecured loans to first-time borrowers participating in the platform economy could even be classified as Priority Sector Lending to further this cause. Likewise, special emphasis may be placed on access to formal credit for women and People with Disabilities (PwDs) and could be offered to platform businesses started in small cities, towns, and villages in India," Rathi added.

What is the importance of fintech solutions for Gig workers?

Since thorough vetting poses a significant challenge for gig workers to reach out to the formal financial sector, many fintech companies have now started tapping this market and providing solutions. Industries like shared mobility, staffing, food delivery, etc. have spearheaded this culture in India by and large. Following their lead, several smaller players in the game are now aiming big. While getting a loan can almost be an impossible task for someone without regular pay, fintech solutions are paving the way of financial reclamation for gig workers. As per a report by Morgan Stanley, 50 per cent of all global workers will participate in freelance and gig economy in some capacity by 2027.