Date: 18/05/2023

Relevance: GS-2: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation.

Key Phrases: Rajasthan Platform-Based Gig Workers Social Security and Welfare Fund, Code on Social Security, Tripartite Institution, Gig Economy, acknowledge the presence of informal workers, Time Constraints of Gig and Platform Workers, Uncertainty in Filling the Labour Rights Gap.

Why in News?

• The Chief Minister of Rajasthan announced earlier this year that the State would set up India’s first welfare fund called the Rajasthan Platform-Based Gig Workers Social Security and Welfare Fund.
• This is the first real instance of a regulatory move to unburden gig and platform workers’ vulnerabilities since the Code on Social Security was passed in 2020.
• The code came amid the COVID-19 pandemic when platform workers became the backbone of metropolitan logistics, acting to serve customers, and working with and for State governments in their food relief schemes.

Many States are yet to act:

• In 2023, many State governments are yet to pass rules that govern how they will implement the Code on Social Security.
• This has raised concerns over how fast gig and platform workers can gain benefits in a scenario where they are seen as “independent contractors”, though they are made to follow rules that constitute an employment relationship.
• Rajasthan stands out as a first mover making haste, with the State facing Assembly elections next year.

Tripartite Institution for Workers:

• The Rajasthan Platform-based Gig Workers Welfare Board is a tripartite institution comprising representatives from the bureaucracy, employers/clients, and workers’ unions/associations.
• This board serves as a familiar institution that can serve the needs of a technology-mediated workforce.

Challenges of Delivering Benefits to Informal Workers:

• The absence of formal employment contracts for informal workers makes it difficult to deliver benefits to them.
• The state struggles to locate informal workers to provide them with benefits, and employers often deny their existence.
• Building a tripartite relationship between the state, employers/clients, and workers' unions/associations is crucial in addressing this issue and ensuring that employers acknowledge the presence of informal workers.

Role of Tripartite Relationship:

• The tripartite relationship enables quick communication in moments of failure where workers or employers do not get their due and enables better communication between the parties.
• In sectors with more informal workers, the tripartite relationship has to be built to force employers to acknowledge that they have informal workers, for workers to collectivize and bring a common voice to their concerns, and for the state to liaise and mediate this relationship.

Tied down in the specifics:

• Limitations:
  • The Rajasthan Platform-based Gig Workers Welfare Board faces challenges in implementing comprehensive schemes due to restrictions imposed by the Code on Social Security.
  • The board is constrained in its ability to design and establish specific programs, as it can only choose from a narrow range of offerings mandated by the state labor ministries.
• Limited Scope of State and Central Government Programs:
  • Key protection schemes, including life and disability cover, health and maternity benefits, old age protection, and education, are to be initiated and funded by the central government under the Code on Social Security.
  • The central government has the authority to determine the states eligible for these schemes, their duration, and the eligibility criteria for gig and platform workers.
  • The limited scope of central schemes may pose challenges, particularly if funding becomes insufficient or unavailable.
• Funding Mechanism and Financial Challenges:
  • The Code mandates platforms to contribute 1%-2% of their revenue towards the new schemes, resolving the issue of financial responsibility for gig and platform worker protections.
  • The Construction Worker Board follows a similar funding approach by collecting a percentage of project costs from real estate companies and builders.
  • Implementing a revenue-based funding mechanism in the platform economy context is complex, given the revenue-negative nature of many platform companies relying on debt or equity funding.
• Unanswered Questions and Financial Allocation:
  • Unresolved questions surround the financial aspects of the Board, including the allocation of ₹200 crore funding and its source.
  • The specific method of charging platforms for their financial responsibilities is yet to be determined, creating uncertainties in the implementation of the welfare board.

The challenge ahead:

• Criticisms of the Construction Board:
  • It is seen as lacking in benefits that adequately compensate for the time, money, and resources required for worker registration and accessing benefits.
• Time Constraints of Gig and Platform Workers:
  • Gig and platform workers often operate under time-poor conditions.
  • Their work is characterized by piece-meal wages tied to hourly or daily commitments on platforms.
  • This poses a challenge to the effectiveness of a Gig and Platform Worker Board and collective efforts among gig and platform workers.
• Uncertainty in Filling the Labour Rights Gap:
  • It remains unclear whether the Rajasthan or any other State Board will address the labour rights gap for platform and gig workers.
  • The existing Code on Social Security does not sufficiently address the labour rights of gig and platform workers.
  • Its focus is primarily on providing protection against vulnerable aspects of their work.
• Limited Scope of Labour Rights in the Code:
  • The Code on Social Security lacks provisions on how to handle the labour rights of gig and platform workers.
  • It primarily aims to safeguard them from vulnerable aspects of their work.

Conclusion:

• The establishment of the Rajasthan Platform-Based Gig Workers Welfare Board represents a significant milestone for gig and platform workers and the unions advocating for their rights.
• While the board's effectiveness remains to be seen, its early implementation sets it apart from the general perception that states would delay the adoption of the new Codes until after the 2024 general elections.
• This move in Rajasthan provides hope for gig workers and highlights the importance of addressing the vulnerabilities faced by this growing workforce.

Source: The Hindu

Mains Question:

Q. How can the establishment of the Rajasthan Platform-Based Gig Workers Welfare Board serve as a precedent for other Indian states to address the challenges faced by gig and platform workers, and what are the key measures that need to be taken by these states to ensure the successful implementation of similar welfare schemes?