Budget 2025: We Need A Safety Net For Gig Workers

Yet, despite their growing significance, gig workers remain outside the ambit of traditional labour protections. The upcoming Union Budget 2025 is expected to introduce a long-overdue social security scheme for these workers, sparking both anticipation and critical scrutiny.

Sadhana Sanjay, research and policy engagement lead at IT for Change, who is an expert on labour well-being and algorithmic management, highlighted the importance of this Budget in addressing the needs of gig workers. 

"The Budget is certainly a good start. To understand more than the provisions in the law, the Budget will help clarify what the nature of the financial contribution is, the burden on the state, aggregators and consumers, and clarify the benefits that gig workers will be entitled to," she said.

The Indian government is planning to introduce a tailored social security policy for gig and platform workers, set to take effect from the next financial year (FY2025-26). The Labour Ministry is working on a framework that ensures fairness without cross-subsidisation. Finance Minister Nirmala Sitharaman is expected to outline the government’s intent on this plan in Budget 2025.

A Patchwork Of Policies

Right now, India lacks a comprehensive national policy for gig worker protections, though a skeletal framework exists. The first initiative was the Code on Social Security that was passed by Parliament in 2020. However, its implementation has been delayed, leaving millions of workers in limbo.

In the absence of central action, state governments have taken the lead. Rajasthan pioneered gig worker protection by enacting the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act in 2023. Soon after, Karnataka introduced a draft law for the same purpose in 2024. 

The fragmented approach highlights the need for a central policy that ensures uniformity while allowing for sector-specific adaptations.

Who Pays?

One of the critical decisions in designing the new policy is how to fund the social security scheme. Two primary approaches are being debated. One suggests that aggregators allocate a fixed percentage of their turnover to a welfare fund. Another approach proposes a per-transaction charge collected by aggregators and deposited into the welfare fund. There are pros and cons in both. 

For the first, challenges exist in accurately defining 'turnover' to prevent underreporting.

Sanjay explained that while this could create a steady revenue stream, “in the turnover model, it would be important for the law to clarify how the turnover of the company is actually being defined, and that accounting loopholes can't be employed to show lower turnover just for this particular purpose.”

However, she cautioned that “in the transaction based model, there is also a risk of the aggregators transferring the financial responsibility to the consumers.”

A balanced approach is essential to prevent financial responsibility from being shifted disproportionately on to consumers or workers. "Aggregators do have a financial responsibility towards their workers, and it can't be shifted solely on to consumers or the state,” said Sanjay.

Defining Social Security

While the exact benefits of the proposed scheme remain unclear, the broad contours suggest the government is considering a mix of mandatory and voluntary protections. Mandatory benefits like health insurance, accident coverage and disability support, may be financed through aggregator contributions. 

Meanwhile, voluntary benefits like pensions and provident funds, may require a nominal contribution from the workers themselves.

Social security is a bucket within a larger conversation about platform workers' rights. It is not known what the exact provisions under the scheme will be. But, Sanjay defines her expectiations.

"We do expect the traditional social security benefits of pension, insurance, protection or redressal for occupational injuries or harm suffered during the course of employment. In the case of women, maternity benefits. These are really critical parts of our welfare architecture that now also need to extend to gig workers."

However, defining a one-size-fits-all policy is impractical, given the diverse nature of gig work. "Different sectors within platform work experience different vulnerabilities. All of these need to be taken into account when drafting the social security scheme," she added.

Expectations From Budget 2025

There is a need for a more comprehensive and nuanced policy approach. "A value-chain approach needs to be taken, to protect all workers in the platform value chain and not let anyone slip through the cracks," said Sanjay, stressing that protections shouldn't be limited to frontline gig workers such as ride-hailing drivers and food delivery personnel, but also include those in subcontracted roles, and digital labourers working in precarious conditions.

Beyond a uniform policy, sector-specific protections are vital. The risks faced by a delivery worker differ significantly from those of a domestic worker or a micro-tasking labourer. A tailored approach is necessary to ensure meaningful protections. This is the speculation and hope from Budget 2025.

As the Budget announcement looms, gig workers across the country remain cautiously optimistic. A well-structured social security scheme could be a historic step toward labour justice in India’s rapidly digitising economy.

Will the policy deliver on its promise, or will it be another half-measure that fails to uplift millions of precarious workers? The answer will probably be found in the fine print of Budget 2025.