HomeNational NewsIndia's gig economy is growing, how will the entire ecosystem flourish?

India’s gig economy is growing, how will the entire ecosystem flourish?

Four years ago today, in 2019, the Periodic Labor Force Survey report (PLFS) made a disclosure about India’s unemployment rate. In this report, it was said that the unemployment rate in the country would increase by 6.1 percent in 45 years. After this, unemployment increased further during the Corona epidemic, but in this period the gig economy gave employment opportunities to unemployed people.

Its good thing was that in this even such people got work opportunities who were not highly educated. The trend of urban youth towards this economy for employment increased. This gig economy did not disappoint him either. Thousands of people are doing jobs in many online platforms based on technology. Now the situation is that this economy has started growing in the country. There are also favorable conditions for it to spread its foot in India. Those who create employment in the country will learn about this economy here.

What is gig economy?

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The gig economy refers to a labor market characterized by the promotion of short-term contracts or freelance work as opposed to permanent jobs. To put it more simply, the gig economy is a free market system in which temporary positions are usually held and organizations hire freelance workers for short periods of time.

The word “gig” is slang for a job that refers to a job that involves a pre-existing condition. In the year 2021, the consultancy firm BCG had said in its report that in the coming 3-4 years, 90 million jobs would come in the country through the gig economy. According to the firm, its direct benefit will be the GDP of the country. Actually this is not a new concept, with the advent of technology, it has gained momentum. In this, people are kept for short periods of time for work.

Why is it important for India?

The whole world is currently going through a phase of digitalization. It is bringing changes in the societies. At the same time, a new economic revolution is also giving birth, which will especially affect the way people work and find jobs. And the best thing is that in India all conditions are favorable for this economy to flourish. As the large population and rapid expansion of digital technology is making India a leader on the front of this economic transformation.

This emerging economic shift focuses on the gig-platform economy. This is the reason why gig economy can become the reason for providing employment to the less skilled people in India’s large labor force ie labor force. For this, the government just needs to take necessary steps to advance the platform related to this economy.

Digital labor platforms have increased 5 times in the last 10 years. New solutions exist on digital platforms in many industries including transportation, retail, personal care and home care. These platforms provide people with a variety of facilities as well as reliable payment options and help companies reach a larger market.

Even during the pandemic, the gig economy stood firm and continued to provide facilities to the people. At that time, when people could not go out during the lockdown, then access to everyday items to medicines at people’s homes became possible through this gig economy. Today the situation is that the employees of this platform are playing an important role in urban India.

According to a report titled ‘India’s Booming Gig and Platform Economy’ by NITI Aayog for 2020-21, gig workers are expected to grow to 23.5 million by 2029-30, becoming a significant part of the country’s workforce. The gig economy continues to grow as more people are opting for more flexible work schedules.

Government policies can help in developing the entire business ecosystem. Although the government is now starting to use it in different departments. This kind of initiative of the government is working as a motivator in increasing this ecosystem rapidly. If attention is paid to some methods, then the gig economy will flourish in India. Here we will talk about such methods.

Easy on-boarding verification

The verification process is very important for the platform in the gig economy. However, this on-boarding system of verification to be adopted for this seems complicated. In this, the means of checking the background of a person sitting far away is digital or online. This is similar to how you open an online account without going to the bank. In the gig industry, it is necessary to check the background of the people working for any platform ie the employees.

This process of background verification is done online. Only from Aadhaar, driving license you cannot decide that he is not a person with any criminal record. At the same time, the duration of the contract of each employee working on such a platform is different, and the appointed people leave and hold work as per their convenience.

In such a situation, it is not easy to do a thorough background check of any gig worker. Only after thoroughly checking the background of a gig worker, it can be decided whether he is trustworthy or not. For example, in any platform from which people order goods online at home, it is also necessary for the employee of that platform to be trustworthy, because they have direct access to people and their homes.

In such a situation, it is very important to ensure that no gig worker has a criminal background. In such a situation, it is necessary for the verification process to be simple and correct. For complete and accurate verification in one go, the data verification of domestic workers should be done with the integration of Aadhaar and the National Crime Records System. This will also reduce the burden of government machinery engaged in this work.

Rules and Regulations for the Gig Economy

To protect the interests of consumers, gig workers and businesses, which are becoming very sensitive, the government should make rules and policies thoughtfully and honestly. In such policies, steps like zero percent GST can be taken in the initial phase of work. Regulatory charges like GST increase the prices of goods and services as well as the cost of job creation.

Platform owners currently have only a few options for filing GST. For example, the option of presumptive income under section 44AD has been kept for those who are business owners. Under this, those businessmen come whose total annual turnover does not exceed two crore rupees.

44AD is a taxation scheme. In this, the owners of small scale enterprises and businesses do not need to audit their account books to pay taxes to the government. Apart from this, platform workers will have to be identified on the basis of their classification. To promote the gig economy, the process of filing taxes has to be simplified. Supportive taxes and policies are needed to promote the development of this type of economy in the country.

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