The government has fast-tracked its plan to provide social security for gig economy workers and those in the unorganised sectors, anticipating a significant increase in their numbers as unemployment soars due to the Covid-19 crisis.
Senior officials ET spoke with said the labour ministry is firming up a scheme that will provide minimum social security, including pension, provident fund, health insurance and unemployment benefits (conditional) to these workers.
An ordinance to this effect will be brought in soon, they said. The move is likely to benefit millions of people, including taxi drivers associated with taxi hailing apps, delivery persons working for ecommerce firms, day-to-day helpers available through platforms like Urban Company (earlier known as Urban Clap), besides rickshaw pullers and roadside vendors.
These segments account for nearly 90% of the country’s 500 million workforce and do not fall under traditional employer-employee relations.
The need for a dedicated scheme for gig workers was first proposed by the labour ministry in the social security code which was tabled in Parliament last year. The code is currently pending with the standing committee on labour.
Sources told ET that the government will soon move a cabinet note to bring an ordinance to implement the code. “The scheme is being finalised and a cabinet note will be moved soon,” one of the officials aware of the discussions said.
The government has held several rounds of discussions since the second week of March with existing social security providers, like the Employees Provident Fund Organisation and the Employees’ State Insurance Corporation, sources said.
While the financial details of the scheme are being worked out, it is expected that the kitty will be built from contribution by workers and the government, besides the employer, wherever applicable.
The government could also raise funds through imposition of some cess while subsuming the existing cess fund of Rs 52,000 crore under the Building and Other Construction Workers’ Act of the labour ministry under the umbrella Social Security Fund envisioned under the Labour Code.
In January, industry body Assocham had projected that the gig economy in India would grow at a CAGR of 17% to hit gross volume of about $455 billion by 2023.
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