Pension Scheme for Gig Workers in India

The Government of India is set to introduce a pension scheme for gig workers. This initiative aims to enhance the financial security of individuals working in the gig economy. The scheme will require platform aggregators to contribute 2% of a worker’s earnings from each transaction towards their pension. This move follows recent announcements regarding health coverage for gig workers.

Overview of the Pension Scheme

The proposed pension scheme is designed to benefit gig workers employed by major platform aggregators like Swiggy, Zomato, and Uber. Employers will contribute 2% of the income earned by workers during transactions. This contribution is in addition to the workers’ earnings and will be deposited into the Employees’ Provident Fund Organisation (EPFO) account of the worker.

Registration Process

Gig workers must register on the E-Shram portal to participate in the scheme. They need to declare the platforms they work with. After verification, workers will receive a Universal Account Number (UAN) under the EPFO. This process is crucial for ensuring that workers can access their pension benefits.

Stakeholder Involvement

The government is engaging with various stakeholders, including state labour ministers and gig workers’ unions. Discussions focus on the implementation of the scheme and the responsibilities of platform aggregators. Effective collaboration is essential for the scheme’s success.

Current Gig Worker Statistics

As of 2025, there are approximately 10 million gig workers in India. About 3.5 million of these workers are engaged with online platforms. Eleven aggregators have reported this number based on recent activity. About the scale of gig employment is vital for tailoring the pension scheme effectively.

Challenges and Recommendations

For the pension scheme to be effective, data-sharing between aggregator companies and the government is necessary. Shaik Salauddin from the Indian Federation of App-Based Transport Workers emphasises that without mandatory data-sharing, many workers may not access their benefits. Registration alone may not suffice for full participation in the scheme.

Future Prospects

The pension scheme is expected to be revealed in the coming weeks. It is part of a broader effort to improve the welfare of gig workers in India. The government aims to provide a safety net for this growing workforce, which has become increasingly important in the modern economy.

Questions for UPSC:

1. Discuss the implications of the gig economy on traditional employment structures in India.
2. Critically examine the role of technology in shaping the working conditions of gig workers.
3. Explain the significance of social security measures for informal workers in India. How do they impact economic stability?
4. What are the challenges faced by gig workers in accessing government benefits? Discuss with suitable examples.

Answer Hints:

1. Discuss the implications of the gig economy on traditional employment structures in India.

1. The gig economy offers flexibility and autonomy to workers, contrasting with the rigidity of traditional jobs.
2. It often lacks job security and benefits, leading to increased financial vulnerability for workers.
3. Traditional employment models are challenged as companies adapt to gig models for cost-saving and efficiency.
4. There is a shift in labor market dynamics, with a growing preference for short-term contracts over permanent positions.
5. The gig economy can lead to a dual labor market, creating disparities between gig workers and traditional employees.

2. Critically examine the role of technology in shaping the working conditions of gig workers.

1. Technology facilitates job matching, allowing gig workers to find opportunities easily through apps and platforms.
2. It can lead to surveillance and performance monitoring, impacting workers’ autonomy and job satisfaction.
3. Access to technology is uneven, creating a digital divide that affects worker participation in the gig economy.
4. Platforms use algorithms to determine pay and task allocation, which can lead to exploitation and unfair practices.
5. Technological advancements can improve efficiency but may also displace traditional jobs, creating further instability.

3. Explain the significance of social security measures for informal workers in India. How do they impact economic stability?

1. Social security measures provide a safety net, reducing poverty and enhancing the well-being of informal workers.
2. They promote financial inclusion, allowing workers to access essential services like healthcare and pensions.
3. Such measures can stabilize the economy by increasing consumer spending power among informal workers.
4. They help formalize the informal sector, encouraging compliance with labor laws and regulations.
5. Social security can mitigate economic shocks, improving resilience during crises like pandemics or economic downturns.

4. What are the challenges faced by gig workers in accessing government benefits? Discuss with suitable examples.

1. Registration barriers, such as the need for a UAN, can hinder access to benefits for many gig workers.
2. Lack of data-sharing between aggregators and the government complicates the verification process for benefits eligibility.
3. Many gig workers are unaware of available benefits due to inadequate outreach and communication from authorities.
4. Complexity in the application process for benefits can discourage workers from pursuing them.
5. Examples include difficulties faced by delivery workers in registering for health coverage under government schemes.