Introduction: Why Gig-Worker Welfare Matters
In recent years, India’s gig economy,powered by online marketplaces, delivery apps, and e-commerce platforms,has transformed the way millions of Indians work. Gig workers, including delivery persons, drivers, warehouse staff, and other platform-based workers, have become a backbone of sectors such as e-commerce, food delivery, and logistics. But despite their importance, many of these workers have historically lacked basic social security: health insurance, accident cover, retirement benefits, and formal protections that full-time employees often take for granted.
Recognising this gap, the government has recently moved to bring gig and platform workers under a formal social security framework. As part of that effort, major aggregator companies,Amazon, Flipkart, Swiggy, and Zomato,are now being asked to contribute to a dedicated welfare fund for these workers.
What the New Arrangement Means: Key Features
• Formal Recognition of “Gig/Platform Workers”
Under the new Code on Social Security, 2020 (CoSS), the terms “gig worker,” “platform worker,” and “aggregator” have been formally defined for the first time.
This recognition validates the work and contributions of those who operate outside traditional employer-employee relationships — a long-awaited step.
• Mandatory Contributions to a Social Security Fund
Amazon, Flipkart, Swiggy, Zomato and other aggregator platforms will have to contribute 1–2% of their annual turnover into the welfare fund.
However, this contribution is also capped at 5% of the amount payable to gig workers,a limitation intended to balance the firms’ obligations.
• Benefits for Gig Workers
Once registered under this framework (linked via Aadhaar and a Universal Account Number), gig workers will be eligible for a range of social security benefits,including:
- Health insurance
- Accident insurance
- Disability cover
- Old-age support / pension or provident fund benefits
- Maternity benefits (for those eligible)
- Other welfare measures as prescribed by the social security board
Accidents occurring even during commuting (between home and workplace) are to be treated as employment-related accidents,thereby making gig workers eligible for compensations.
• Portability Across States & Registration on National Database
Gig workers will be registered on a national database with Aadhaar-linked account numbers, ensuring that their benefits are portable,especially important for workers who move across states for work.
• A Dedicated National Social Security Board
The new law envisages a National Social Security Board that will help design and monitor appropriate welfare schemes for unorganised, gig, and platform workers,acknowledging that one-size-fits-all may not work across different kinds of gig work.
Why This Is a Significant Step Forward
• A Lifeline for Millions
Estimates suggest that the number of gig workers,across e-commerce, food delivery, logistics — is large and growing rapidly. Under this framework, many of those workers (who earlier had practically no social protection) will now have access to basic security: health cover, pension/retirement support, accident/disability protection. This could provide a much-needed safety net for low-income and vulnerable workers.
• Legitimising Gig Work & Reducing Invisibility
For long, gig work has existed in a grey zone,neither traditional employment nor casual self-employment with protections. The new definition and framework mean that gig work gains formal recognition, helping reduce workers’ “invisibility” in labour policies and enabling better data, regulation, and oversight.
• Potential for Cross-State Mobility & Fair Treatment
Because benefits are linked via a national database and Aadhaar-based registration,not tied to a specific employer — workers can retain benefits even if they switch platforms or move across states. This flexibility is vital for a country like India, where many gig workers migrate for work.
Challenges and Concerns: What Remains to Be Addressed
While the new scheme is promising, several issues remain that could limit its effectiveness:
- Implementation and enforcement: It remains to be seen how quickly and thoroughly platforms will register all gig workers, and whether contributions will be made transparently and on time.
- Adequacy of benefits: The welfare fund must provide meaningful coverage,adequate health and accident insurance, reasonable pension/retirement support, and timely access to benefits. Tokenistic coverage may not solve deep structural vulnerabilities.
- Grievance redressal and worker rights: Many gig workers have complained of arbitrary suspensions, lack of grievance mechanisms, and lack of clarity or redress when issues arise. A welfare fund helps, but only alongside effective mechanisms for fair treatment, transparency and accountability. For example, a recent study carried out by a workers’ union in Hyderabad found many workers reported blocked IDs, lack of grievance systems, and no health or accident insurance prior to reforms.
- Cost pass-through and consumer burden: Some analysts argue that added costs for platforms (due to contribution obligations) may get passed on to consumers,potentially affecting demand, prices, and the sustainability of certain gig-based services.
- Need for regulatory oversight and transparency: For the system to work fairly, there must be strong oversight,audits, transparency in fund flows, representation of workers in the governing boards.
Broader Significance: What It Means for India’s Future of Work
The move by Amazon, Flipkart, Swiggy, Zomato and other platforms to contribute to a welfare fund marks a watershed in how India treats gig workers. It signals a shift: from seeing gig work as informal, “on-demand” labour with no long-term responsibilities,to recognizing it as legitimate, worthy of labour protections and social security.
For millions of gig workers who juggle uncertain incomes, lack of benefits, and socio-economic vulnerability, this could translate into real dignity, stability, and a safety net against accidents, health emergencies, old age,conditions typically reserved for traditional employees.
At a time when gig economy is booming,driven by e-commerce, food delivery, logistics, quick commerce, etc.,such reforms could define the future of work in India. They could also influence how other developing economies treat gig workers, offering a possible template for balancing flexibility with social security.
Conclusion
The decision to make Amazon, Flipkart, Swiggy, Zomato and other aggregators contribute to a national welfare fund for gig workers is more than just a policy tweak,it represents a paradigm shift in acknowledging, valuing, and protecting the backbone of India’s gig economy.
If implemented well,with transparency, accountability and genuine coverage,this could help secure the livelihoods of millions, ensure social security, and bring dignity to work that has long been invisible. But the success of the initiative will depend heavily on real-world execution: prompt registration, effective fund management, fair grievance handling, and commitment from both companies and the government.
For gig workers, this could mark the beginning of a more stable, secure, and respected working life,not just a “side hustle,” but a legitimate livelihood with rights and protections.