India’s Gig Economy Is Expanding. How The Entire Ecosystem Can Flourish
The gig economy could lead to job creation for the low-skilled workers in India's massive labour force and the government must implement the essential measures to promote the expansion of platforms
The pace of digitalisation has spread throughout the world, reshaping societies and sparking a new economic revolution that will significantly impact how people work and find jobs. Thanks to its advantages — a favourable population structure and quick spread of digital technologies—India is at the vanguard of this economic transformation. This emerging paradigm shift is centered on the gig-platform economy.
Over the past 10 years, digital labour platforms have increased fivefold. Innovative solutions are available on digital platforms in various industries, including transportation, retail, personal care, and home care. They provide people with various skill sets promising pay options and give companies access to a larger market. Even throughout the pandemic, the gig economy has shown resilience, with platform employees playing an essential role in urban India. As per a report by NITI Aayog titled 'India's Booming Gig and Platform Economy' for 2020–21, gig workers are predicted to grow to 23.5 million by 2029–30, becoming a significant portion of the Indian workforce.
The gig economy is expanding continuously as more people opt for more flexible work schedules. The government policies can help the entire ecosystem to grow. They are now beginning to use this talent from different departments, acting as a catalyst to build this ecosystem much faster.
Here’s a look at some ways to uplift the gig economy in India:
Easy On-Boarding Verification
Verification process for the platforms is a must in the gig economy. However, the on-boarding system seems to be rather complex. Thus, it becomes essential to do background checks on everyone involved in this industry. The length of each person's contract varies, and the people hired constantly change based on their availability. Only a thorough background investigation can determine whether a potential gig worker is reliable. Thus, a one-time verification process lessens the burden on government machinery on system's integration for data verification of domestic workers via Aadhaar and national crime records.
Rules And Regulations For Gig Economy
To protect the interests of consumers, gig workers, and businesses as they are becoming more cost sensitive. Thus, the government must create all the well-intentioned regulations and policies that include a GST reduction to zero per cent in the initial years of their working journey. These imposed regulatory expenses raise the price of goods and services as well as the cost of creating jobs.
Platform owners now have few alternatives for filing GST. For instance, the presumptive income option under Section 44AD is intended for people who own businesses. Moreover, platform workers would have to be recognised for their classification. The procedure of filing taxes would be simplified as a result. Therefore, there is a need for supportive taxes and policies to promote the platform economy's development.
Numerous intricate laws govern how GST input tax credits should be claimed, and everyone who owns an asset utilised for a dual purpose (taxable, exempt, or private usage) should be aware of them. Over the asset's ownership, these regulations call for annual adjustments.
Financial Inclusion
Gig workers have unique financial requirements. For this expanding population, many of the conventional banking procedures are ineffective. Gig workers require more expedient deposit options, portable tax planning, retirement benefits, and different methods of determining loan worthiness. The usual systems are already being circumvented by gig workers in order to speed up payment delivery. The majority of gig workers exclusively use banking to make cash withdrawals. In addition, financial inclusion calls for raising workers’ credit limits and simplifying and improving their access to the banking system.
For instance, gig workers who are indulged in blue collar work prefer cash on delivery. Since income determination for banking loans is difficult, they don’t file ITR, hence, no income statement. Their cost of debt is too high as they borrow it from private players, which hampers financial inclusion.
Ensuring Platform-Based Upskilling And Training Programmes
Due to the growth of the gig economy in India, there are more options for gig workers to find work due to established platforms. These platforms must have a feature that enables skill development and employment for gig workers through chances for upskilling, job discovery, and digital credentials. In order to enable upskilling through micro-credentials, it must serve as a portal for information on the short-term courses provided by public and private training facilities. The portal might be useful for both job providers and gig workers. Furthermore, a report from CIIE.CO claims that upskilling can aid gig workers in adjusting to market demands, expanding within the gig economy.
The gig economy could lead to job creation for the low-skilled workers in India's massive labour force. The government must implement the essential measures to promote the expansion of platforms and the gig economy. Moreover, protection of interests is also required in order to provide gig workers with fair working conditions and social security benefits, with the government funding utilised in proper manner. Thus, the funds required to strike the ideal balance will need financial investment from all the stakeholders.
Final Takeaway!
The fast adoption of novel digital technology has brought a paradigm shift in corporate procedures and service delivery. Industry 5.0-related and gig economy-related new technologies are already changing the nature of employment and are predicted to create a wide range of new opportunities. Due to the rising popularity of smartphones, the affordable cost of internet access, and other programmes implemented as part of the Digital India campaign, digital platforms have flourished in India. The multiple platforms that make up the gig economy provide cutting-edge solutions across numerous industries. This evolving situation necessitates evaluating the gig and platform sector's capacity to generate employment and developing policy measures that can reenergise efforts from various stakeholders to encourage growth and decent work.
The author is the founder and CEO of socio-techno start-up, Gigzeu.
[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal.]
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