Gig workers’ social security: More extensive proposals in Rajasthan, better insurance cover in Karnataka

Jaipur, July 24, 2023.

In July, Congress-ruled Rajasthan and Karnataka both announced certain measures for gig workers. Said to be the brainchild of Congress leader Rahul Gandhi, who pressed party leaders in both states to implement the idea, the approach of the two governments is different.

While the Ashok Gehlot government in Rajasthan has tabled a Bill extending social security to gig workers, the Karnataka government has announced for gig workers an accident and life insurance cover of Rs 4 lakh for which it will entirely bear the cost of the annual premium. In his Budget speech, Karnataka CM Siddaramaiah said the cover was “social security to the gig workers in the unorganised sector”.

In his Budget speech in February, Gehlot said, “Today, the number of gig workers in the state has increased to 3 to 4 lakh. These big companies do not make any arrangements for social security for these gig workers. To protect such workers from exploitation and to provide support, I propose to bring in the Gig Workers Welfare Act.”

The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill extends to gig workers rights such as registration with the state, access to general and specific social security schemes, and an opportunity to be heard for any grievances. An important component of the draft law is the setting up of a Platform-Based Gig Workers’ Welfare Board. In its election manifesto for Karnataka, the Congress announced a similar welfare board with an allotment of Rs 3,000 crore as seed money for a revolving fund. However, the Siddaramaiah government has not year approved the proposal.

Apart from bureaucrats, the welfare board in Rajasthan will have two representatives each from gig workers and the aggregators, to be nominated by the state government. Other major provisions of the Rajasthan Bill are that it seeks to register all gig workers and aggregators in the state. The government will maintain a database of such workers and generate a unique ID for each of them.

Another important component of the Bill is the “Platform-Based Gig Workers’ Fund and Welfare Fee”. Under this, a social security and welfare fund will be established for gig workers. Besides other sources, the fund will be set up using the welfare fee levied from aggregators “which shall be at such a rate (per cent) of the value of each transaction related to a platform-based gig worker, as may be notified by the state government”.

The Bill also has a provision for penalties. If aggregators fail to pay the welfare fee in time, they will be charged an interest of 12% per annum from the date on which such payment is due. If the aggregators violate any other clause, the Bill empowers the state government to impose a fine of up to Rs 5 lakh for the first contravention and up to Rs 50 lakh for subsequent violations. Unlike Karnataka, the Rajasthan draft law doesn’t yet offer any insurance coverage.