Union Budget 2021: Gig workers like e-commerce delivery boys, cab drivers likely to come under security net

The much-awaited nod was given to the implementation of the four labour codes in the Union Budget 2021 announced by the Finance Minister Sitharaman on February 1. It is expected to extend social security benefits such as minimum wages and insurance coverage to gig workers who work with aggregators and marketplaces such as Ola, Uber, Flipkart and Amazon besides construction workers and others.

"Government proposes to conclude a process that began 20 years ago, with the implementation of the 4 labour codes. For the first time globally, social security benefits will extend to gig and platform workers," said FM Sitharaman in her third Budget speech.

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"Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State Insurance Corporation," she added.

The government will also launch a portal that will collect information on gig and construction workers, among others. It will help the government in formulating health, housing insurance credit and food schemes for the migrant workers.

India's Parliament, in the last monsoon session, passed three labour codes - the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. In the monsoon session last year, it also passed the Code on Wages. Together, these four codes merged 44 pre-existing labour laws.

Minimum wages will apply to all categories of workers, and they will all be covered by the Employees State Insurance Corporation

- FM Sitharaman

The Code proposes the creation of a social security fund for extending these benefits to workers in the unorganized sector. The scheme for the social security fund envisages that the platforms and aggregators make contributions to the fund which would be either 1-2 percent of the turnover or 5 percent of the worker’s wages.

Central and the state governments can also contribute to the social security fund. It integrates nine previous regulations relating to social security.

"The move towards providing social security benefits for gig workers will add a much-needed safety net that will help this sector grow in a sustainable way and help the many millions that are a part of it," Kunal Bahl, the founder and chief executive officer of Snapdeal tweeted.