78% Of Delivery Gig Workers In India Earn Below Rs 2.5 Lakhs Annually, Survey Reveals
The survey, which spanned over 40 cities and included over 2,000 gig delivery workers from Zomato, Swiggy, Uber, and Amazon, sheds light on the financial challenges faced by these workers
Gig Workers: A recent survey conducted by Borzo (formerly WeFast), a global same-day delivery firm, has revealed that 77.6 per cent of gig delivery workers in India earn less than Rs 2.5 lakh annually. The survey, which spanned over 40 cities and included over 2,000 gig workers from companies such as Zomato, Swiggy, Uber, and Amazon, sheds light on the financial challenges faced by these workers. It also highlights a considerable lack of tax awareness and inadequate financial planning among gig workers in the country.
Financial Challenges and Earnings
The survey highlights that gig delivery workers in India face substantial financial challenges, with the majority earning less than Rs 2.5 lakh annually. This reflects the precarious financial situation many gig workers are in, despite working with some of the biggest names in the gig economy. As the number of gig workers in India is projected to increase, financial instability remains a pressing concern.
Borzo India’s managing director, Eugene Panfilov, said the need for enhanced financial literacy among gig workers. He stated, "As we focus on the gig economy, it’s important to equip gig delivery workers with the knowledge and tools for effective financial planning. The debate surrounding minimum income for gig delivery workers points to the need for targeted education and support."
Lack of Tax Awareness
The survey revealed that a majority of gig workers are unaware of the tax implications of their earnings. About 61 per cent of respondents admitted they were unaware of income tax brackets, while only 39 per cent said they knew their tax obligations. Even more concerning is the fact that only 33.5 per cent of gig workers have filed income tax returns (ITRs). This leaves a staggering 66.5 per cent of gig workers who have never taken this step.
Among those who do file ITRs, 66 per cent file Nil Returns, while 34 per cent submit Self-Assessment Returns. Additionally, the survey showed that 47 per cent of tax-filing gig workers prefer to pay their taxes in regular instalments, while the remaining 53 per cent choose to pay a lump sum.
Interestingly, 42 per cent of non-ITR-filing respondents expressed a willingness to pay taxes if they fall within a taxable income bracket, yet 58 per cent were unwilling to pay taxes even if they owed them.
Limited Investment Habits
When it comes to investment habits, the survey found that the majority of gig workers do not invest in financial instruments such as mutual funds or stocks. A significant 77 per cent of gig workers do not invest in mutual funds, and of those who do, most invest between Rs 500 and Rs 1,000 monthly.
Similarly, 74 per cent of gig workers do not invest in stocks. Among the 26 per cent who do, blue-chip stocks are the preferred choice for nearly half, while others invest in IPOs or penny stocks.
Lack of Long-Term Financial Planning
Long-term financial planning appears to be a low priority for gig workers. Only 24 per cent of respondents reported investing in Public Provident Fund (PPF) accounts. Those who do contribute to PPF accounts typically invest between Rs 1,000 and Rs 3,000 per month. Moreover, 65 per cent of gig workers do not have life insurance, pointing to a lack of preparation for unforeseen circumstances.
Growing Gig Economy
The gig economy in India is rapidly expanding. NITI Aayog estimates that there are currently 7 million gig workers in the country, a figure expected to grow to 25 million by 2030, with an annual growth rate of nearly 12 per cent. While the gig economy presents a unique employment opportunity for millions, the financial struggles of gig workers call for immediate attention.
National Tax Compliance Comparison
The broader picture of tax compliance in India for the financial year 2022-23 shows a similar trend of non-compliance. Out of 74 million individuals who filed income tax returns, around 70 per cent reported zero tax incidence. This indicates that only a small portion of the population, around 1.6 per cent, actually paid income tax during this period.
This growing trend of individuals reporting zero tax incidence further underscores the need for targeted education and support in promoting tax compliance among gig workers, as the gig economy continues to play an increasingly vital role in India's workforce.
Top Headlines
