Page 26 - Banking Finance September 2025

ARTICLE

as a separate category within India's labour framework. The in shaping a more equitable, inclusive, and sustainable fu-
Code mandates aggregator platforms to contribute 1-2% of ture for the gig workforce.
their annual turnover to a welfare fund, intended to sup-
port gig workers through social security schemes. Proposed Rise of Rural GIG work: With the government's Digital In-
benefits include healthcare, maternity, disability, and pen- dia initiative and expanding rural connectivity, there is po-
sion coverage, aiming to provide a safety net for this vul- tential for gig work models to enter semi-urban and rural
nerable workforce. However, the Code's implementation is economies - especially in areas like agritech services, rural
still pending, and its actual impact will depend on effective BPOs, digital teaching, and health advisory.
execution, platform compliance, and state cooperation.
GIG Economy and Banking
Meanwhile, some platforms have taken voluntary steps to The gig economy's rapid growth in India presents both op-
support their workers. For instance, Swiggy offers accident portunities and challenges for the banking sector. Gig work-
insurance to its delivery partners, and Urban Company pro-
ers, often lacking formal income proofs, face barriers in
vides upskilling and training programs for service profession-
als. While these efforts are commendable, they remain lim- accessing credit, insurance, and savings tools. To bridge this
ited in scope and highlight the need for formal, universal gap, banks must adopt innovative approaches-leveraging
protections under the Code. alternative data like platform earnings and digital transac-
tions to assess creditworthiness. Customized products such
as micro-loans, flexible savings accounts, and bundled insur-
To sustain gig economy growth, India must implement the
ance schemes can enhance financial inclusion. Partnerships
Social Security Code, create an universal protection fund,
mandate contracts and minimum wages, introduce rating between banks and gig platforms can also enable seamless
systems for platforms, and ensure access to credit and in- access to financial services, ensuring that this emerging
surance. Strong grievance redressal mechanisms and regu- workforce is financially secure and empowered to contrib-
latory oversight are essential to balance innovation with ute to India's broader economic growth.
worker protection.
Conclusion
The Road Ahead The gig economy in India represents a transformative shift
Technology and AI Integration: The integration of Artifi- in the employment landscape, offering flexible work
cial Intelligence (AI), automation, and data analytics is en- opportunities that resonate strongly with the country's
hancing the efficiency of gig platforms by enabling real-time youthful population, entrepreneurial spirit, and rapid digi-
task matching, route optimization, and personalized ser- talization. It has enabled millions to earn livelihoods through
vices. This improves customer satisfaction and helps gig platforms offering services in transport, delivery, freelancing,
workers align better with suitable tasks, potentially increas- and more. For many, it provides autonomy, skill develop-
ing earnings. While technology boosts platform productiv- ment, and income diversification. However, this model also
ity, it must be balanced with transparent practices and safe- exposes workers to challenges such as lack of job security,
guards to protect the rights and autonomy of gig workers. unpredictable incomes, absence of benefits, and algorith-
mic control.
Formalization and Unionization: As India's gig economy
continues to grow, it is likely to move toward greater for- To truly unlock the potential of the gig economy, India must
malization and worker organization. Gig workers, often op- adopt a balanced and inclusive policy framework that pro-
erating without job security or benefits, are beginning to motes innovation while ensuring worker protection. This
recognize the need for collective representation. This could includes implementing the Social Security Code, mandating
lead to the formation of unions or cooperatives that advo- fair contracts, extending access to financial services, and
cate for fair pay, transparent algorithms, grievance redressal establishing robust grievance mechanisms. Formal recogni-
systems, and improved working conditions. Such organiza- tion of gig workers' rights and voices through unions or co-
tions would give gig workers a unified voice in negotiating operatives can further empower them. A future-ready, dig-
with digital platforms and policymakers. As awareness in- nified, and equitable gig economy is essential for long-term
creases, these worker-led movements could play a vital role economic and social sustainability.

24 | 2025 | SEPTEMBER | BANKING FINANCE