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Gig Economy Challenges in India



  Sep 09, 2023

Gig Economy and Its Challenges in India


Q: What is the gig economy and why are gig workers in India facing challenges?

A: The gig economy is a work arrangement where individuals take on short-term or freelance jobs, known as “gigs,” instead of traditional long-term employment. This model offers flexibility and is common in sectors like food delivery and ride-sharing. However, a study by the National Council of Applied Economic Research (NCAER) found that food delivery workers in India are earning less in 2022 compared to 2019. The average monthly income has fallen, and workers are working longer hours to compensate. The reduced income is attributed to factors like rising inflation and increased fuel costs, impacting their overall earnings and work-life balance.
 

Q: How are incentives changing for gig workers in India?

A: Incentives for gig workers have decreased over time due to market maturation. Initially, platforms offered higher incentives to attract workers and capture the market. As the gig economy grew and more workers joined, the focus shifted from expansion to profitability. This led to changes in the commissions and incentives being offered to gig workers.
 

Q: What are the implications of gig work on formalization and worker rights?

A: While gig work lacks the security of permanent jobs, it contributes to a certain level of formalization. Many platform workers have task-based written contracts and accident insurance, though they often lack health insurance, paid leave, or pension. While gig work provides a degree of protection compared to informal work, there’s an ongoing debate about ensuring gig workers’ rights while maintaining the flexibility that defines the gig economy.
 

Q: How is the gig economy growing in India?

A: The NITI Aayog report estimated that India had around 7.7 million gig workers in 2020-21, forming 1.5% of the total workforce. This number is projected to grow to 23.5 million by 2029-30, constituting 4.1% of total jobs.
 

Q: What’s the significance of socioeconomic realities in the gig economy?

A: The gig economy’s growth is influenced by socioeconomic factors. While gig work lacks the security of permanent jobs, it has provided a level of dignity that informal work options often don’t offer. Balancing worker rights, benefits, and job security in the gig economy is a challenge that involves considering the socioeconomic context.
 
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