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The Editorial 07 Oct, 2022 - Is it time for the gig economy?

INDIAN ECONOMY POLICY / BILL
07 Oct, 2022

NEWS HIGHLIGHTS

Theme : Indian Economy, Industrial Policy
GS - 3

TABLE OF CONTENT

  1. Context
  2. What is Gig Economy 
  3. Moonlighting
  4. Types of Gig Workers in India
  5. Status of Gig Economy in India
  6. Recommendations by NITI Aayog

Context : Recently, Wipro sacked 300 employees following the discovery that they were working for rival firms on the side, leading to conflict of interest. Infosys has warned staff against moonlighting, saying it could lead to termination.

What is the Gig Economy ?

  • Gig Economy is the evolving economic model wherein the firms hire workers on a part-time flexible basis rather than as full time employees. The Code on Social Security, 2020 defines gig workers as those engaged in livelihoods outside traditional employer-employee relationships.
  • The workers work as freelancers or independent contractors. They generally have flexible and adaptable working hours based on individual preferences.
  • The jobs in gig economy typically require interacting with the users through online platforms e.g., the drivers engaged with cab hailing platforms (Uber, Ola etc.), delivery workers engaged with restaurant aggregators (Zomato, Swiggy etc.), or tutors delivering lectures over online platforms. The workers engaged in such jobs are called Gig Workers.

Moonlighting

  • Moonlighting is the phenomenon of employees working for remuneration with entities other than their (regular) employers.
  • Moonlighting has been a hot topic in recent months.  During the pandemic, those with desk jobs had more time on their hands and thus it was easier to take on a few projects outside of work. In July, Kotak Securities said in a study that at least 60% of 400 employees surveyed said they themselves had, or knew someone who had engaged in moonlighting.
  • Moonlighting is not only becoming popular among regular salaried employees in the corporate sector, but also becoming more prevalent in the gig economy, especially in those jobs at the lower spectrum of wage/ remuneration.

Types of Gig Workers in India :

Gig Workers can be broadly classified into two categories —

(a) Platform gig workers: those whose work is based on online software apps or digital platforms.

(b) Non-platform gig workers: generally casual wage workers and own-account workers in the conventional sectors, working part-time or full time.

  • The Gig workers can also be classified on the basis of skills: high-skilled, medium-skilled and low-skilled workers.

  •  According to the NITI Aayog Report of 2022, at present, about 47% of the gig work is in medium-skilled jobs, about 22% in high-skilled jobs, and about 31% in low-skilled jobs. 

  • Trends show that the concentration of workers in medium skills is gradually declining and that in low skills and high skills is increasing.

Status of Gig Economy in India :

  • According to the NITI Aayog Report, India’s gig workforce currently stands at 77 lakh (2020-21). It is expected to rise to 2.35 crore by 2029-30. By 2029-30, gig workers will form 4.1% of India’s total workforce.
  • A report by Ernst and Young observed that Indian Freelancers hold a 24% share of the global online gig economy.
  • According to a report by ASSOCHAM (Associated Chambers of Commerce and Industry of India), the gig sector has the potential to grow to US$ 455 billion by 2024.
  • Holding multiple freelance jobs is the new norm in the gig economy.

Recommendations by NITI Aayog :

The 2022 report ‘India’s Booming Gig and Platform Economy‘ has analyzed the gig economy from gig workers’ perspective and has made several recommendation:

  • Accelerating Access to Institutional Finance for Gig Workers: FinTech and platform businesses may be leveraged to provide cash flow-based loans to workers.
  • Skill Development for Gig Workers: Platforms can collaborate with the Ministry of Skill Development and Entrepreneurship, and the National Skill Development Corporation (NSDC) to nurture skilled workers and micro-entrepreneurship.
  • Platformization: A Platform India Initiative can be launched on the lines of Start-up India, to increase gig workers’ access to the platforms.
  • Enhancing Social Inclusion in Indian Gig Economy: for example, Platform businesses can create a more enabling environment for women and PwD workers through changes in the work-design and workplace facilities.
  • Extending Social Security: Platforms can offer paid leaves, and access to insurance along with pension and retirement benefits.

FAQs:

Q1. What is the Gig Economy?

Answer : Gig Economy is the evolving economic model wherein the firms hire workers on a part-time flexible basis rather than as full time employees. The Code on Social Security, 2020 defines gig workers as those engaged in livelihoods outside traditional employer-employee relationships.

Q2. What is the classification of a Gig Economy?

Answer : The Gig workers can also be classified on the basis of skills: high-skilled, medium-skilled and low-skilled workers.