01 July 2022 18:21:02 IST

A long-time ‘deskie’, Baskar has spent much of his journalism career on the editorial desk. A keen follower of economic and political matters, he likes to view economic issues from a political economy lens as he believes the economic structure of a society is deeply embedded in its political and social ethos. Apart from writing the PolitEco column for BLoC, Baskar writes book reviews and articles on politics, economics and sports for the BL web edition. Reading and watching films are his other interests, though the choice of books and films are rather eclectic.  A keen follower of sports, especially his beloved Tottenham Hotspur FC, Baskar is an avid long-distance runner.  He hopes to learn music some day!

NITI Aayog report turns focus on the world of gig economy

Three major events in recent times tell us how crucial and confounding the issue of jobs has become in the country — the sudden eruption of violent protests against the Agnipath scheme, the Centre’s announcement of filling up 10 lakh vacancies in government jobs in the next one-and-half years, and the NITI Aayog’s report on gig workers. 

The timing of the Centre’s announcement, as well as the deadline for filling up the vacancies, is telling. In barely a year and a half, the country will be readying itself for the 2024 general elections and PM Narendra Modi will be looking to head for the third term in office, so the political significance of this is hard to miss. 

But beyond the political messaging, the Modi government also seems to be admitting that it is the government that has to do the heavy lifting on the jobs creation front and not the private sector. Industry in India, at least the big, organised segment, in the last two years has used the pandemic-induced stress to clean up their balance sheets by cutting down employee costs and paring down debt. 

Given the economic uncertainty, it is unlikely for the industry to create fresh capacity and hire more workers. Also given the capital-intensive nature of Indian industry, the jobs in demand will be highly skilled in nature and few in numbers. This is perhaps why most jobs get created in the amorphous unorganised sector in the country.

By conservative estimates, more than 80 per cent of workers are employed in the unorganised sector and a good number of them are classified as “self-employed,” which means they run small neighbourhood businesses such as tea shops or small kirana stores. 

Economist and Nobel Laureate Abhijit Banerjee a few years ago said that the predominance of the “self-employed” is not a reflection of our entrepreneurial spirit. In his field studies, people running these small businesses admitted to him that they would happily trade these businesses to get a government job. 

For the Modi government, the recent announcement is a reversal of its earlier ‘minimum government, maximum governance’ credo when it came to power eight years ago. There are regular news reports of how post-graduates and even PhDs apply in large numbers for Class IV positions (the lowest in the ladder) in government departments. 

This points toward two things — the lack of credible jobs in the private sector and the lure of the government jobs which offers security, salary and pension benefits. 

The Gig turn 

It is in this context that the recent report of government think-tank NITI Aayog on gig workers assumes great significance. NITI Aayog sees a more than three-fold increase in gig workers — from 77 lakh in 2020-21 to 2.35 crore in 2029-30. Given this phenomenal anticipated rise, it has suggested a number of ways for both the government and private sector to safeguard the welfare of these workers. 

In its report titled, ‘India’s booming and platform economy’, the NITI Aayog has made three important recommendations. One, it seeks universal coverage of platform workers through the Code of Social Security; two, on skilling it has sought regular assessments to bridge the gaps; and three, for onboarding skilled women and persons with disabilities, it wants the government to partner with platform businesses. 

The NITI Aayog has also created a framework RAISE, for making the Code of Social Security 2020 operational. It has also urged the Centre and the States to draw up a “five-pronged” approach for gig workers to access social security when the rules are chalked out. 

But it has so far remained silent on PF and medical benefits for gig workers. So there are many more issues that need to be ironed out.  The report also makes some important observations on the gig economy. It says “currently more than 75 per cent of companies have less than 10 per cent gig headcount, but this proportion is bound to rise, with MNCs turning to flexible hiring options.”

This is a crucial observation of how the dynamics of the labour market will change in the coming years and how even established companies are looking at the “gig model” to keep down costs. More importantly, the era of permanent or even semi-permanent jobs seems to be coming to an end. 

Most jobs in future will be short-term in nature with a high degree of employee turnover. What political and social repercussions this will have remains to be seen. This report coming from a government think-tank is also an important pointer to how the government is viewing the whole jobs situation. 

We seem to be at a curious juncture in the job situation. We have a vast unorganised sector that employs a majority of our workers often at subsistence levels. Then we have a growing gig sector which is generating a lot of unskilled and semi-skilled work albeit of a short-term and casual nature. 

Then we have the manufacturing jobs which are also a mix of permanent and contract jobs. Then there is the much-coveted job in the government sector. But here too not all jobs are of permanent nature. This is of course apart from the vast number of white-collared jobs in the services sector which forms more than 50 per cent of our GDP. 

India has had a peculiar journey from a predominantly agrarian economy to an advanced services-led economy. Unlike East Asian nations such as China and South Korea, India has bypassed the low-skilled, labour-intensive manufacturing stage and leapfrogged into a highly skilled and tech-oriented services sector (IT and ITES).

But there is also a vast agriculture sector, which is officially classified as unorganised, that still employs a vast number of people. The rise of the gig sector has only added another layer of complexity to the vastly segmented Indian labour market. While India contains multitudes, all of it holds enormous importance in the economy to keep pushing forward.