Policy Update
Vishal Kumar
Background
The global labour market has undergone a fundamental transformation since the 2008 global financial crisis. Traditional employment relationships have increasingly given way to flexible platform-mediated forms of work collectively referred to as the gig economy. In India, this transition has been driven by rapid urbanisation, widespread smartphone adoption and the expansion of the digital economy. Gig work refers to income-generating activities performed outside conventional employer-employee relationships. It includes platform-based work facilitated through digital applications such as Swiggy, Zomato and Uber as well as non-platform gig work, including casual wage labour and freelance services.
The gig economy has expanded rapidly over the past decade. According to NITI Aayog, approximately 7.7 million workers were engaged in the gig economy in 2020-21. This number is projected to increase to 23.5 million by 2029-30. This threefold increase is expected to intensify concerns over income security, social protection and labour rights, highlighting the urgency of establishing a comprehensive and enforceable social security framework for gig workers.
Although the COVID-19 pandemic accelerated the growth of platform-based work, it also exposed the limited social protection available to gig workers. Unlike workers in the formal sector, most gig workers are classified as independent contractors rather than employees. Consequently, they remain largely excluded from statutory benefits such as health insurance, pensions and unemployment protection. This regulatory gap has generated increasing legal and policy debates across the world. In India, gig workers have approached the Supreme Court seeking recognition as unorganised workers entitled to statutory social security benefits.
Functioning
The regulatory framework for extending social security to gig workers in India is anchored in the Code on Social Security (CoSS), 2020. This legislation represents the first formal recognition of gig and platform workers under Indian labour law. The framework is operationalised through four interrelated components that collectively govern the financing, registration, institutional oversight and delivery of social security benefits for gig and platform workers. These components are discussed below:
- The Aggregator Model: Digital platforms are required to contribute between 1% and 2% of their annual turnover to a dedicated Social Security Fund, subject to a ceiling of 5% of the total amount payable to gig and platform workers. Unlike several European countries, where platform workers are increasingly being integrated into employer-funded social insurance systems following worker reclassification, India’s approach relies on a dedicated welfare fund financed through mandatory platform contributions. While this model is better suited to the flexible nature of platform work, questions remain over whether the prescribed contribution rates will generate sufficient and sustainable resources to provide comprehensive social protection as the gig workforce continues to expand.
- Registration and Unique ID: The proposed framework relies on Aadhaar-based self-registration through the e-Shram portal. Registered workers are issued a unique identification number that remains valid across multiple digital platforms.
- State-Level Legislation: Several states have enacted independent legislative measures in response to the delayed operationalisation of the CoSS. The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023, was the first to establish a dedicated Welfare Board and introduce a transaction-based welfare cess. Similarly, the Karnataka Platform-Based Gig Workers Bill, 2025, proposes mandatory notice periods before termination and greater transparency in algorithmic management.
- Scope of Benefits: The proposed social security framework covers life and disability insurance, health and maternity benefits and old-age protection. It also provides the foundation for extending additional welfare measures to gig and platform workers as implementation progresses.
Performance
The implementation of social security measures for gig workers remains at an early stage despite the establishment of a legislative framework. The CoSS, 2020, was officially notified in November 2025. However, several implementation mechanisms, including contribution rates and the operationalisation of the Social Security Fund, are yet to be finalised. Consequently, progress has varied across states and platforms. The current performance can be assessed through the following indicators:
Worker Registration: Registration of gig and platform workers has expanded through the e-Shram portal and state-level initiatives, creating the administrative foundation for extending future social security benefits. Nevertheless, registration remains substantially below the estimated size of India’s gig workforce, indicating that a large proportion of workers remain outside formal welfare databases. Operationalisation of Welfare Boards: Progress in establishing institutional mechanisms has been uneven. Rajasthan has constituted a Platform-Based Gig Workers Welfare Board under its 2023 legislation to oversee worker registration, administer the welfare fund and recommend social security measures. At the national level, however, the Social Security Fund envisaged under the CoSS, 2020, is yet to become fully operational, limiting the delivery of statutory benefits.
Platform Compliance: Compliance among major digital platforms remains at an early stage. While several companies have initiated worker registration and engaged with emerging regulatory requirements, the absence of notified contribution rates and uniform implementation rules has resulted in inconsistent compliance across platforms. Many obligations continue to await detailed operational guidelines.
Financial Disclosures: Large information technology and service companies have begun recognising statutory liabilities arising from the evolving regulatory framework. Tata Consultancy Services (TCS) reported a statutory charge of ₹2,128 crore in late 2025, while Infosys recognised exceptional items amounting to ₹1,289 crore in anticipation of liabilities associated with the revised wage provisions.
Voluntary Welfare Initiatives: Several platforms introduced welfare measures before mandatory social security provisions came into effect. Ola established the ₹20 crore Drive the Driver fund, while Swiggy and Flipkart introduced accident and medical insurance for selected categories of gig workers. Although these initiatives provide limited protection, they remain voluntary and vary considerably across platforms.
Early Implementation Experience: Rajasthan’s experience illustrates both the potential and the practical challenges of extending social security to gig workers. While the state has created a dedicated legal framework, welfare board and funding mechanism, implementation has been slowed by administrative bottlenecks, delays in collecting platform contributions, difficulties in registering platforms operating across multiple states and the gradual rollout of welfare benefits.
Implementation Gaps: Despite these developments, a 2025 risk assessment found that several provisions of the CoSS, including contribution rates, financing arrangements and benefit delivery mechanisms, had yet to become operational. Institutional capacity constraints, uneven platform compliance and regulatory uncertainty continue to impede theeffective extension of social security protections.
Impact
The emerging social security architecture is expected to strengthen labour protection and promote the gradual formalisation of gig work in India. However, its effects are likely to vary across different categories of gig workers depending on the nature of platform work, income security and access to welfare mechanisms. Its impact can be examined through four broad dimensions, namely labour formalisation, social inclusion, financial empowerment, and improvements in working conditions:
Gender and Social Inclusion: The CoSS promotes gender-neutral remuneration and consent-based provisions for night shifts. It also encourages inclusive welfare measures that could improve labour force participation for women engaged in home-based gig work.
Formalisation and Dignity of Labour: The statutory recognition of gig workers represents an important step towards extending labour protection to a previously unregulated workforce. It also reinforces the state’s responsibility to provide minimum social security safeguards. Financial Inclusion: The creation of formal employment records may improve gig workers’ access to institutional credit and cash flow-based lending. This could reduce their dependence on informal sources of finance.
Work-Life Balance: Proposed reforms under state legislation, particularly the Karnataka Platform-Based Gig Workers Bill, seek to improve transparency in remuneration and establish safeguards against arbitrary termination. These measures have the potential to improve working conditions and reduce the physical and mental strain experienced by gig workers.
Emerging Issues
The transition towards a regulated gig economy has exposed several structural and implementation challenges. These issues continue to constrain the effective extension of social security to gig workers. While recent reforms have established an important legislative foundation, several regulatory, technological and institutional gaps continue to limit their effectiveness. The principal challenges are discussed below:
Misclassification and Arbitrage: The Code on Social Security recognises gig workers as a distinct category but does not classify them as employees. While this approach preserves labour market flexibility, it leaves unresolved questions regarding collective bargaining, trade union rights and employment protection.
Algorithmic Oppression: Platform management continues to rely heavily on algorithmic decision-making with limited transparency. Digital platforms determine work allocation, remuneration and performance evaluation with minimal human oversight. Existing social security measures also provide limited safeguards against arbitrary account suspension and inadequate grievance redressal.
The 10-Minute Delivery Trap: Ultra-fast delivery models have intensified occupational health and safety concerns. Strict delivery timelines expose workers to road accidents, air pollution and physical fatigue. These risks remain inadequately addressed within the current regulatory framework.
The “Dual Compliance” Burden: The coexistence of central and state-level regulatory frameworks has created compliance challenges for digital platforms. Differences in implementation and reporting requirements may increase administrative costs and regulatory uncertainty. Gender Invisibility: Policy discussions continue to focus primarily on location-based delivery workers. Consequently, the concerns of home-based and digitally mediated gig workers, many of whom are women, receive comparatively limited policy attention.
Way Forward
A comprehensive policy approach is required to strengthen social protection while preserving the flexibility of gig work. The following measures can improve the effectiveness and sustainability of India’s emerging social security framework.
- RAISE Framework: NITI Aayog’s RAISE framework provides a comprehensive roadmap for policy reform. It emphasises Recognising diverse forms of gig work, Allowing innovative financing mechanisms, Incorporating platform interests, Supporting subscription-based welfare models and Ensuring universal accessibility.
- Single-Window Governance: India should establish a unified system for compliance and benefit delivery. Integrating the Central Board, Employees’ State Insurance Corporation (ESIC) and State Welfare Boards would improve administrative coordination and reduce compliance burdens.
- Portable and Adaptive Benefits: Social security benefits should be made portable across digital platforms and states. Such a framework would enable workers to accumulate benefits irrespective of changes in platform affiliation or place of work.
- Transparency in AI: Governments should require digital platforms to adopt transparent and accountable algorithmic management practices. Greater transparency would reduce the risk of discriminatory outcomes and strengthen procedural fairness.
- Universal Social Security: The ultimate goal should be a universal safety net that provides a “decent standard of life” as envisioned in the Directive Principles of the Indian Constitution. Such a framework would ensure minimum social protection for all workers regardless of their employment arrangement.
India can strengthen the sustainability of its digital labour market by prioritising effective implementation alongside legislative reform. Greater emphasis on enforcement, institutional coordination and worker protection would promote inclusive and equitable growth within the gig economy. References
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About the Contributor: Vishal Kumar is a Research & Editorial Intern at IMPRI. He is currently pursuing a master’s degree in Political Science at the University of Jammu, Jammu and Kashmir. His research interests include Political Economy, Public Policy, governance and political Philosophy.
Acknowledgement: The author would like to extend his gratitude to the reviewers and IMPRI for their guidance throughout the process.
Reviewed by: Paridhi Passi and Tanvi Nerurkar
Disclaimer: This article is intended for academic purposes only. The views expressed are those of the author and do not necessarily reflect the views of IMPRI or any government institution.
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