Gig workers to get a social security shield, but will moonlighting be a problem?

In Budget 2025, Finance Minister Nirmala Sitharaman announced steps to extend social security cover for gig workers. However, the changing employment structure and the dynamic nature of gig work make it a challenging proposition.

Apr 7, 2025 - 02:11

Gig workers to get a social security shield, but will moonlighting be a problem?

The gig economy is growing rapidly, and the opportunity for gig work is so great that foodtech platforms like Swiggy, Zomato, and Zepto tout themselves among India’s largest employment generators. As of June 2024, Swiggy supported over 4.5 lakh delivery partners per month, its IPO papers showed. Meanwhile, Zomato’s delivery partner count exceeded 3.5 lakh in 2023, it noted in a LinkedIn post.

However, these numbers aren’t as straightforward.

Gig workers, especially those associated with last-mile deliveries, work across platforms. For instance, a worker might deliver groceries in the morning, shift to ecommerce deliveries in the afternoon, and fulfill dinner-time food deliveries. While moonlighting enables them to earn more, it also creates a headache for governments, platforms, and policymakers seeking to access records or make regulations.

Over the last year, states like Rajasthan and Karnataka have implemented reforms to give gig workers some social security, with the latter aiming to collect a 5% cess from platforms to fund welfare measures.

Union Budget 2025 threw a national spotlight on the growing backbone of India’s urban economy. In her Budget speech, Finance Minister Nirmala Sitharaman announced the extension of e-Shram portal registrations to provide identity cards to gig workers. As of February, 70,000 gig workers have already registered on the portal, the Parliamentary Standing Committee on Labour observed.

The Budget also brought 1 crore gig workers under the ambit of the Pradhan Mantri Jan Arogya Yojana, which offers a health cover of Rs 5 lakh per family per year for secondary and tertiary care hospitalisation.

However, the government faces a fundamental challenge: who qualifies as a gig worker?

Easier said than done

According to NITI Aayog, the gig workforce is expected to expand to 2.35 crore workers by 2029-30.

Gig work, by nature, is untethered and attracts a diverse pool of individuals, including students, young professionals, and those looking to make an extra buck on the side. However, while they pull in long hours, the pay isn’t enough to cover the rising cost of living. A recent TeamLease report noted that nearly 78% of gig workers earned less than Rs 2.5 lakh per annum.

Giving workers an identity

The latest reforms can only be implemented with a standardised system to track gig employment. Establishing such a framework would help bring structure to a role defined by its flexibility while ensuring workers receive the benefits they are entitled to.

“I think the easiest way to address this is by linking the entire system with Aadhaar, which is already in progress. This would allow tracking based on Aadhaar usage across different platforms,” Bhagat adds.

This can be facilitated through the e-Shram portal, which was extended to gig workers in Budget 2025. The portal, launched by the Ministry of Labour and Employment in 2021, aims to create a national database of unorganised workers in India to disburse welfare benefits and social security measures.

It primarily works on a self-declaration model. To register, gig workers need to use their unique Aadhaar number verified through OTP.

Platform aggregators are also required to register in the e-Shram portal and then onboard the platform/gig workers associated with them. The workers get issued a Universal Account Number, which they can use for social security schemes such as PM JAY, explains Ashok Varma, Partner, Grant Thornton Bharat.

“An updated UAN with an aggregator required for verification would be a challenge at any point. Therefore, treating aggregators as traditional employers and linking them to platform/gig workers will not work,” he notes.

“The Ministry of Labour and Employment has specified that workers covered under EPFO or the Employees’ State Insurance Corporation are not eligible to register on the e-Shram portal. This distinction ensures that the benefits intended for unorganised workers are not duplicated for those already covered under formal social security schemes,” explains Balasubramanian A, Senior VP and Business Head at TeamLease.

Since gig workers don’t have a stipulated number of minimum working hours, and delivery partners operate across platforms and shift frequently, the scope for misuse is wide.

“Overall, the idea is that even if two out of 100 people misuse the system, it’s not a major issue in terms of implementation. As long as the benefits reach the right people, some misuse is acceptable,” believes Madhav Kasturia, CEO of Zippee, a quick commerce logistics platform.

Other benefits

Along with the gig workers platform, the portal can also accept notification of employment from non-profit organisations working in the gig economy space, suggests Sudheer Gopalakrishna, Director at Satyagopal Foundation, which focuses on uplifting blue-collar workers.

According to a report by Business Standard, the government is contemplating mandating platform aggregators to deduct 2% of a gig worker’s earnings per transaction and deposit the same into an account managed by the Employees’ Provident Fund Organisation. This contribution will be in addition to the worker's regular income.

“Nothing is borne by corporates. If the corporation gets into anything, it will recover directly or indirectly from customers only,” highlights Sandeep Agrawal, Director and Founder of Teamlease Regtech.

However, these measures require transparency from platform operators on the number of active gig workers employed and the compensation details to ensure appropriate contributions from platforms for social security funds.

Edited by Kanishk Singh