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Is the gig economy not a repackaged name of the informal economy?

Shubham Bajpai by Shubham Bajpai
15 February 2023
in Economy
gig economy
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Gig economy report: According to a report from NITI Aayog, the gig and platform economy in India currently employs 6.8 million people, with predictions that this number will rise to 23.5 million by 2030. Although the industry faces unfavorable working conditions, the report highlights that people are still choosing to enter the sector. However, the report fails to consider the push factors that may be driving workers towards gig and platform work.

NITI Aayog reports

According to the report the economic perspective has been limited to the idea of job creation and support for businesses, workers’ perspectives are largely missing from the consultation process in India.

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The gig and platform economy have opened up abundant employment opportunities, primarily fueled by technology. The proliferation of smartphones and affordable internet has played a significant role in democratizing these jobs. Additionally, the gig model provides an avenue for workers to acquire new skills while earning, leading to a plethora of opportunities. This is sometimes evidenced by consecutive jobs and double shifts.

The primary objective of gig economy workers is monetary gain, while employers often pay only for completed work. This trend can be attributed to the prevalence of unemployment, which has left a significant population disconnected from government and prestigious private jobs, leading to existential challenges. In response, many people turn to the gig economy, effectively rendering it a parallel to the informal economy.

Also read: Tracing the evolution of NITI Aayog

Gig economy to informal economy

NITI Aayog recommends that state-led interventions be implemented promptly to provide social security benefits and protection to gig workers. It’s worth noting that although the gig economy can fall under both the formal and informal sectors, its contributions to the economy remain unrecorded, thus resembling the latter. Due to the industry’s growing size, it is increasingly becoming synonymous with the informal economy.

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