Labour Min To Soon Seek Nod For Gig Workers’ Pension Scheme

SUMMARY

The contributions will be deducted from the income of gig workers as a percentage of every transaction

Gig workers will have the option to either withdraw interest on the deposits as pension or divide the accumulated funds into equal installments over a period

This follows FM Sitharaman announcing plans for a social security scheme for gig workers in her budget speech last week

Nearly a week after finance minister Nirmala Sitharaman announced a social security scheme for gig workers in her budget speech, the labour ministry has pushed the pedal on formulating such a proposal.

As per news agency PTI, the labour ministry plans to “soon” seek the Union Cabinet’s nod for a pension scheme for 1 Cr gig workers in the country employed with online aggregation platforms.

The report, citing a source, said that the ministry is working on devising a mechanism to deduct the contribution for the pension scheme from the income of these workers on a per-transaction basis. As per the report, the social security contributions will be deducted as a percentage of every transaction by the online platforms, just like the collection of goods and services tax (GST).

Under the proposed scheme, gig workers will reportedly be provided two options at the time of retirement when the pension is fixed – either withdraw interest on the deposits as pension or divide the accumulated funds into equal installments over a stipulated period.

The report added that the government is yet to decide the quantum of the income to be contributed for the social security scheme. Notably, gig workers will be able to avail the scheme even if they work for two or more platforms simultaneously.

In her budget speech last week, FM Sitharaman said that the government will issue identity cards and facilitate the registration of gig workers on the e-Shram portal. She added that the gig workers will also be provided healthcare benefits under the PM Jan Arogya Yojana.

The move is expected to formalise the gig economy and bring more such workers under the ambit of social welfare schemes run by various government agencies.

Notably, the e-Shram portal was launched in August 2021 to register workers in unorganised sectors by issuing them with a Universal Account Number (UAN). The move was envisaged with creating a comprehensive national database of unorganised workers.

As of January 2025, more than 30.58 Cr unorganised workers are registered on the e-Shram portal.

While aggregator platforms such as Zomato and Swiggy internally run various social security schemes for their employees, the formal institution of the government scheme will put the onus of collection of contributions on these online platforms. While the planned initiative is expected to add compliance mandates for these companies, it will also help bring social security cover for more than 1 Cr gig workers in the country.

The developments come at a time when online platforms continue to come under fire over the working conditions of their gig workers. Ride-hailing companies Ola and Uber and logistics startup Porter scored zero points on the ‘Fairwork India Ratings 2024’. The report noted that none of the digital players paid minimum wages enough to allow workers to afford a “decent standard of living”.