Quest for consistent social security across Indian states
This article is authored by Prakash Gupta, lead and Apoorv Kulkarni, head, Centre for Inclusive Mobility housed within OMI Foundation.
A wave of legislation aimed at regulating social security for gig and platform workers is sweeping through Indian states. Following Rajasthan's lead, Karnataka and Jharkhand have recently introduced their own bills, and Kerala is planning similar legislation. As more states join this trend, a significant shift in labour policy is emerging.
The shift in the labour policy can be traced back to the non-implementation of Code on Social Security (CoSS) 2020 over the past four years. This has left a gap in delivery of worker welfare that a few states are now attempting to fill with their own laws. While these initiatives are well intentioned, they come with certain limitations that might lead to suboptimal benefits for workers and constrain job creation in the platform economy.
Labour is a concurrent subject in India, requiring legislation at both the central and state levels to function synchronously and synergistically to ensure effective worker welfare. However, today there is a notable incongruence between them. For instance, consistency in key definitions and interpretations is crucial to maintain a unified approach. CoSS 2020 differentiates between gig workers and platform workers based on their mode of accessing work through digital platforms, whereas state legislations often do not make this distinction. Instead, they use the term platform-based gig workers to define beneficiaries. Such discrepancies can lead to inclusion and exclusion errors, potentially misidentifying beneficiaries at the time of implementation.
The central government is relying on worker registration through eShram, a pan-India portal for delivery of social security. The state legislations on the other hand, require registration on state-specific databases. For workers, managing multiple registrations and keeping them updated would be cumbersome, raising barriers to participation in the platform economy. Additionally, state-specific registration raises concerns about the eligibility of migrant workers and the portability and continuity of benefits as workers move between states or change occupations.
While the CoSS 2020 clearly outlines social security benefits for workers, state regulations lack this specificity, creating uncertainty about the support they will provide. Moreover, state schemes often struggle with issues like inter-state portability and residency requirements, as exemplified by Rajasthan’s Chiranjeevi Yojana, which limits its access to permanent residents. For platform workers, many of whom are migrants, the absence of clear, portable benefits poses significant risks. Without specified benefits, state laws could lead to avoidable delays, costly duplication, and ultimately, suboptimal social security outcomes.
The ambiguity surrounding the benefits, eligibility, and portability under state laws becomes even more problematic when considering the funding mechanisms. States typically are proposing a charge on transactions, akin to a tax or cess. Rajasthan and Jharkhand have adopted this model, while Karnataka is weighing both transaction-linked and turnover-linked levies. The challenge is that without a clear understanding of the benefits to be provided and the number of workers to be covered, levying such charges is precarious. Although these charges are meant to be paid by aggregators, or potentially passed on to consumers - as proposed in Karnataka — the financial burden could ultimately fall on the workers. Increased transaction costs might reduce demand, shrinking workers' earnings. What's more, without clarity around resource requirements, the funds collected through such levies may be underutilised, as has been the case with state welfare funds for building and construction workers. These practical realities ultimately place workers at a disadvantage.
Additionally, once CoSS comes into force, the risk of overlapping charges and duplicated benefits could become a real issue for the workers. Thus, they might end up directly or indirectly paying for social security without receiving proportional benefits. Eventually, such a complex system could defeat the purpose of any social security legislation.
India’s gig and platform workers deserve a social security system that is both comprehensive and accessible. Today, we have an opportunity to build such a system through seamless collaboration among central and state governments, aggregators, and workers. The system must ensure benefits are portable and continuous, without raising barriers or increasing job creation costs. A well-coordinated framework will not only deliver robust support to workers but also set a global standard for effective social security, demonstrating how synergy among stakeholders can drive meaningful change.
This article is authored by Prakash Gupta, lead and Apoorv Kulkarni, head, Centre for Inclusive Mobility housed within OMI Foundation.


