Why are Blinkit workers protesting?

• The recent strike by Zomato-owned Blinkit delivery agents has once again brought to the forefront the issues plaguing the gig economy in the country.
• The strikes began when Blinkit rolled out its new pay-out structure for delivery executives, under which the minimum pay-out per delivery was slashed to Rs 15 per delivery from Rs 25.

Who is a ‘gig worker’?

• Gig workers refer to workers outside of the traditional employer-employee relationship.
• There are two groups of gig workers-platform workers, and non-platform workers.
• When gig workers use online algorithmic matching platforms or apps to connect with customers, they are called platform workers.
• Those who work outside of these platforms are non-platform workers, including construction workers and non-technology-based temporary workers.

What is the Gig Economy?

• A gig economy is a free market system in which organisations hire or contract workers for a short span of time.
• Simply put, the positions are temporary to meet the company’s requirements by having short-term engagements.
• Startups like Ola, Uber, Zomato, and Swiggy have established themselves as the main source of the gig economy in India.

What is the size of the Gig Economy in India?

• A NITI Aayog study on “India’s Booming Gig and Platform Economy” has estimated that 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).
  • 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 workers were engaged in the gig economy.
• The gig workforce is expected to expand to 2.35 crore workers by 2029-30.

What is the Proposed Law for Gig Workers?

• The Ministry of Labour and Employment introduced the Code on Social Security, 2020.
• The Code on Social Security 2020 brings gig workers within the ambit of labour laws for the first time.
• The Code stipulates that Central and State Governments must frame suitable social security schemes for gig workers on matters relating to –
  • Health and maternity benefits, old age security, education, provident funds, accident benefits, life insurance, disability insurance among others.
• The Central Government has also been tasked with establishing a social security fund for gig workers.
  • Gig employers must contribute 1-2% of their annual turnover to this fund, which may be used for the aforementioned schemes.
• The Code also mandates the compulsory registration of all gig workers to avail of benefits under these schemes.
• The Code also envisages the constitution of a National Social Security Board by the Central government to monitor the implementation of such schemes.

Challenges Faced by Gig Workers:

• Despite receiving the assent of the President, the Labour Codes are still awaiting implementation three years on.
  • The Centre has said that this is due to the delay in framing of rules by the States.
• While platform companies have created avenues of employment, it has often been marred by low wages, unequal gender participation, and a lack of possibility for upward mobility within an organisation.
• This has triggered protests from workers at companies like Swiggy, Zomato, Ola, Uber, and Urban Company, among others.
• Gig workers are typically hired by companies on a contractual basis and are not considered their employees.
• As a result, they do not receive some of the benefits that an on-roll employee of the company may have.
  • This means they often do not receive benefits like paid sick and casual leaves, travel and housing allowances, and provident fund savings, among other things.

What Needs to be Done In Order to Improve the Living Standards of Gig Workers?

• Fiscal Incentives –
  • Fiscal incentives such as tax-breaks or startup grants may be provided for businesses that provide livelihood opportunities where women constitute a substantial portion of their workers.
  • This was mentioned by the NITI Aayog in its report “India’s Booming Gig and Platform Economy”.
• Retirement Benefits –
  • The report also recommended firms adopt policies that offer old age or retirement plans and benefits, and other insurance cover for contingencies such as the Covid-19 Pandemic.
  • Such plans and policies may be envisaged under the Code on Social Security, 2020.
  • Businesses should consider providing income support to workers as it would be a “critical step in providing assured minimum earnings and social security from income loss in the wake of uncertainty or irregularity in work”.
  • It also suggests offering paid sick leave to workers apart from insurance cover.