“Define the concept of ‘gig’ economy and discuss its impact on labour market and workers’ social security net.” (2024)
The word “gig” comes from musicians’ one-off engagements. The gig economy is a labour market in which work is organised as short-term, task-based engagements, usually mediated by digital platforms, with workers treated as independent contractors rather than employees. India’s Code on Social Security, 2020 defines a gig worker as one who earns outside a traditional employer–employee relationship, and a platform worker as one who does so through an online platform.
The concept
- Core features: pay per task, algorithmic allocation and rating, flexible hours, worker-owned tools (bike, phone, car), and reputation scores in place of credentials.
- Types: location-based work (ride-hailing, delivery, home services) and web-based crowd or freelance work. The ILO (World Employment and Social Outlook, 2021) found that digital labour platforms grew about fivefold between 2010 and 2020.
- Theoretical lens: Nick Srnicek (Platform Capitalism, 2016) calls such firms “lean platforms” that own few assets and outsource costs. Arne L. Kalleberg (“Precarious Work, Insecure Workers”, 2009) places gig work in a wider shift toward precarious employment.
Impact on the labour market
Opportunities
- Absorption: low entry barriers draw in youth, migrants and those between jobs. NITI Aayog (2022) estimated 77 lakh gig workers in 2020-21, projected to reach 2.35 crore (4.1% of the total workforce) by 2029-30.
- Flexibility: students, part-timers and some women gain supplementary income.
Disruptions
- Segmentation: John Atkinson’s flexible firm (1984) split a secure core from a numerically flexible periphery. Platforms make the periphery the main workforce.
- Disguised employment: workers are controlled like employees but classified as partners. Alex Rosenblat (Uberland, 2018) shows how algorithms set pay, direct effort and deactivate workers without explanation.
- Educated underemployment: the India Employment Report 2024 found the educated share of the unemployed rose from 54.2% (2000) to 65.7% (2022). Many graduates now ride delivery bikes, a status inconsistency that deepens frustration.
- Weakened bargaining: dispersed workers lack a shop floor. Yet new unions are forming: platform workers struck nationwide on 31 December 2025 against ten-minute delivery targets.
Impact on the social security net
India’s social security was built around the employer (EPF, ESI, gratuity), so gig workers fell through it. Guy Standing (The Precariat, 2011) calls this the loss of labour-related securities. Recent law patches the net:
- Code on Social Security, 2020 (in force 21 November 2025): aggregators contribute 1–2% of annual turnover, capped at 5% of payouts, to a welfare fund. The Social Security (Central) Rules, notified in May 2026, require 90 days’ work with one platform or 120 days across platforms in a year for eligibility.
- Union Budget 2025-26 promised identity cards, e-Shram registration and PM-JAY health cover for about one crore gig workers.
- State laws: Rajasthan (2023), Karnataka, Jharkhand and Bihar (2025) and Telangana (2026) set up welfare boards funded by transaction levies.
Limits
- These measures give welfare, not rights: no minimum earnings, no employee status, no protection against deactivation.
- Day thresholds may exclude intermittent and multi-app workers, the most precarious.
- Registration on e-Shram, now past 31 crore workers, records workers without naming an employer.
Conclusion
The gig economy converts employment into commerce, supervision into code and fixed costs into workers’ risks. India now recognises gig workers in law, but the protection is thin and portable only on paper. In Karl Polanyi’s terms (The Great Transformation, 1944), the counter-movement has begun; it will be complete only when platform work carries earnings floors and enforceable rights, not just welfare.