FM proposes social security benefits for gig workers

While this year’s Budget focussed on growth and hope for a rejuvenated economy, Finance Minister Nirmala Sitharaman proposed a set of benefits for migrant workers or daily wage earners who were severely hit by the Covid-19 pandemic last year.

In what would be a relief to the unorganised labour force, Sitharaman said for “migrant workers particularly, I propose to launch a portal that will collect relevant information on gig, building, and construction workers, among others. This will help formulate health, housing, skill, insurance, credit, and food schemes for migrant workers.”

She also mentioned the ‘One Nation, One Ration Card’ scheme through which beneficiaries can claim their rations anywhere in the country. Migrant workers in particular benefit from this scheme—those staying away from their families can partially claim their ration where they are stationed, while their family, in their native places, can claim the rest, she noted in her speech on Monday, adding that the ‘One Nation, One Ration Card’ plan is under implementation by 32 states and Union territories, reaching about 69 crore beneficiaries. That’s a total of 86% beneficiaries covered. The remaining four states and Union territories will be integrated in the next few months.

Experts feel the government’s proposals will bring much needed relief for the unorganised workforce in the country. “The pandemic created a massive problem for migrant workers during the lockdown. We should learn from this and make sure that gig workers, and migrant labourers are protected in future. This idea of a portal is a good start and I hope the intent translates into efficient execution,” e-commerce industry veteran and co-founder of Again Drinks, K Vaitheeswaran tells Fortune India.

K. Ganesh, a Bengaluru-based serial entrepreneur, and promoter of BigBasket, Portea Medical, and FreshMenu concurs: “The pandemic has brought into stark focus how vulnerable the unorganised sector workers are who contribute the bulk of our workforce. The strength of the large numbers can be used to create insurance and social security net by having a small per person charge borne by the government or the private sector platforms. First step towards this is the collection of data.”

While presenting the Budget for 2021-22, Sitharaman said that social security benefits will extend to gig and platform workers. Minimum wages will apply to all categories of workers, and they will all be covered by the Employees' State Insurance Corporation. “Women will be allowed to work in all categories and also in the night shifts with adequate protection. At the same time, compliance burden on employers will be reduced with single registration and licensing, and online returns,” she noted.

The Economic Survey 2020-21 pointed out that India is one of the largest countries for flexi-staffing or gig and platform workers. Since the Covid-19 pandemic hit in March, e-commerce companies created massive job opportunities for gig workers such as online delivery executives and cab drivers of taxi-hailing apps Ola and Uber. As Coronavirus cases surged across the country, people began to prefer ordering online, thereby, boosting sales for companies such as Flipkart, Amazon, Swiggy, Zomato, and others.

Pooja Ramchandani, partner, Shardul Amarchand Mangaldas & Co, points out that the Code on Social Security, 2020, lays down the framework for social security benefits to gig and platform workers. “Up until now, there was no such protection under labour laws. The Code contemplates social security schemes which will be formulated by the government for gig and platform workers with regard to life and disability cover; health and maternity benefits; old age protection; and other benefits as may be determined by the government.”

These schemes may be funded by the government wholly or partly in collaboration with the aggregators and beneficiaries. As per the Code, gig and platform workers need to be registered to avail these benefits.

Chaitanya Ramalingegowda, co-founder and director, Wakefit.co, a sleep products startup, points out that the move to build a portal for gig workers and provide them social security will help streamline workforce management across the company and reduce compliance issues for employers.

Besides, the finance minister also said that to promote supply of affordable rental housing for migrant workers, the government proposed to allow tax exemption for notified affordable rental housing projects in the Budget.