India’s gig economy has emerged as a dynamic engine of economic growth and job creation. With millions engaged in platform-based work, it reflects the changing nature of employment in a rapidly digitizing world. While this transformation offers vast promise, the current regulatory framework does not account for the nuances of the gig economy, especially with regard to social security benefits. The absence of a unified national framework has left both platforms and workers navigating a fragmented and often confusing landscape. There is a need for a central policy that harmonizies efforts of the government and platforms toward the welfare of gig workers.
The Indian gig economy has expanded at an extraordinary pace. In 2020–21, an estimated 7.7 million workers were engaged in gig and platform-based work. This number is projected to triple to 23.5 million by 2029–30, with the sector’s market size expected to reach $455 billion by 2024. Several forces are driving this expansion. Widespread access to smartphones and affordable internet has enabled seamless digital interactions between platforms, service providers, and customers. A robust startup ecosystem has created significant opportunities for India’s growing labour force. The appeal of autonomy and flexibility has attracted a younger, tech-savvy workforce that prioritizes work-life balance. Moreover, for many, gig work provides either supplementary income or a crucial livelihood in an environment of underemployment and rising living costs.
Despite its scale, the gig economy operates in a regulatory grey zone. Most platforms classify workers as “independent contractors” or “partners,” placing them outside the scope of labor laws that guarantee minimum wages, job security, or access to social security benefits. Recognizing this gap, the central government introduced the Code on Social Security in 2020, which legally acknowledged gig and platform workers as a distinct category for the first time. However, the delayed implementation of this law has left a regulatory vacuum, prompting states to take matters into their own hands.
Rajasthan became the first state to pass the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023, establishing a welfare board and a dedicated social security fund. Karnataka followed with a similar ordinance. While these moves signal progress, they have also created a patchwork of rules. Each state’s approach differs in terms of registration processes, welfare levies, and compliance requirements. For companies operating across India, this means navigating a maze of inconsistent obligations, driving up compliance costs and administrative burdens. Smaller startups are particularly disadvantaged, limiting their ability to scale.
Workers, too, face uncertainty. Benefits provided under state laws are not portable, meaning protections may lapse when workers move across states. For a workforce that is inherently mobile—often migrating in search of opportunities—this lack of portability undermines both security and equity. The result is a system that, while well-intentioned, risks failing the very workers it seeks to protect.
To address these challenges, India must move towards a unified central framework that ensures clarity and consistency nationwide, while still allowing for state-level implementation. Such a framework would begin with establishing clear legal definitions of gig and platform workers to remove ambiguity and prevent misclassification. Social security benefits must be made portable through a national registry linked to Aadhaar, ensuring that entitlements such as health insurance and pensions follow workers seamlessly across states and platforms. To maintain coverage for all, including those working with smaller or newer platforms, a central welfare fund should be created, with joint contributions from the government, platforms, and workers.
Equally important is simplifying compliance for businesses. A single-window digital system for registration, reporting, and contributions would ease administrative burdens, reduce costs, and encourage innovation, especially among smaller startups. Alongside this, gig workers must have a voice in shaping policies that affect them. Institutional mechanisms such as welfare boards or digital councils would ensure that their perspectives are incorporated, balancing the need for flexibility with the necessity of protection. Finally, implementation should be phased, with states acting as partners within a common national framework so that emerging best practices can be adapted without sacrificing uniformity.
India’s gig economy stands at a pivotal moment. Its growth trajectory is undeniable, but without an inclusive and harmonized policy framework, the sector risks deepening inequalities and leaving millions of workers vulnerable. A national strategy that combines consistency with flexibility, and innovation with protection, is essential. By aligning worker welfare with economic dynamism, India has the opportunity to set global benchmarks for a fair, equitable, and sustainable gig economy, one that not only drives growth but also safeguards the dignity and security of its workforce.
*The Author is a leading policy professional at MSL Group