Gig workers have welcomed a new law in India’s largest state Rajasthan to impose a tax on revenue earned by digital platforms that operate in the state, including global giants Uber and Amazon, even as industry groups have warned it will eventually hurt customers and derail business in the state.

Late at night on Monday, Rajasthan passed a law imposing up to two percent tax on revenue earned by digital platforms that operate in the state. The tax would go towards the welfare and social security of an estimated two million platform-based gig workers in the state, a first in the country and coming at a time when national elections are less than a year away.

The move, orchestrated by the Indian National Congress which is in power in the state, has been welcomed by associations representing gig workers, who have over the past few years frequently organised to demand improved wages and social security benefits. The new rules are expected to kick in within the next two to three months.

Shaik Salauddin, founder and state president of the Telangana Gig and Platform Workers Union (TGPWU) and national general secretary of the Indian Federation of App-Based Transport Workers (IFAT), said gig workers “celebrate” the move and spearheaded the consultations with the government of Rajasthan on the bill’s provisions.

“We here at IFAT celebrate this day along with all our brothers and sisters who walked and contributed to this complex and difficult journey where a multibillion-dollar corporation has refused to recognise us, speak to us, and ignored our presence in the labour market,” Salauddin said in a statement.

‘Excellent’ move
India has an estimated 7.7 million platform-based gig workers, and according to state-run think-tank NITI Aayog, the number is expected to rise to 23 million by 2030. But the majority of gig workers don’t have social security benefits because they are employed in the country’s informal or unorganised sector.

The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023 establishes a welfare fund for gig workers which will be funded through this new tax that will be applied to each transaction on the platform. The tax shall not be more than two percent or less than one percent, as per the act, and will be applied to company’s revenue on that transaction and not to the customers.

The fund will be used towards financing schemes meant for the welfare of platform-based gig workers.

Under the act, a government-run database of all gig workers will keep track of their employment status and time of engagement with one or more aggregators. In addition, there will be a centralised tracking and management system to manage all financial transactions taking place on the aggregator’s platform.

Financial transactions of app aggregators will be mapped through this tracking system using application programming interfaces (APIs) shared by the companies. These will be shared in real time, explained Nikhil Dey, member of the Suchna Evum Rozgar Adhikaar Abhiyan that spearheaded the drafting of the bill.

The act also establishes a welfare board where the representatives of gig workers’ unions will be part of all decision-making on how the money is to be spent, for the first time in the country. Together with representatives of companies, the state and gig workers unions, the board will draw up welfare schemes and benefits.

Janaki Srinivasan of the Fairwork project was one of the observers of the deliberations on the law that took place in Rajasthan’s capital Jaipur earlier this month and called the new law an “excellent” move. Fairwork is a gig economy research project at the Oxford Internet Institute that evaluates the working conditions of gig workers on digital platforms.

Comparing Rajasthan’s legislation with other global measures to regulate the platforms industry, she told The Reporters’ Collective that “groups all over the world are seeking multiple entry points to reform the app-based jobs sector but the combinations used to draft [these rules] are fairly unique”.

The registration system under the Rajasthan act will be the first step towards having a clear and fair picture of the exact number of gig workers employed in the sector as it automatically registers all such workers, said Balaji Parthasarathy, principal investigator for the Fairwork project.

‘Counterproductive’
IndiaTech, an industry association representing Indian startups, investors and app aggregators, said that the Rajasthan act will lead to duplication of some of the efforts already being undertaken by app aggregators.

“The food delivery platforms already provide accident and health insurance free of charge to gig workers. For instance, accident insurance coverage by food ordering and delivery platforms such as Zomato and Swiggy may already be up to one million rupees ($12,195) and the premium expense is borne by these platforms themselves,” Rameesh Kailasam of IndiaTech told The Reporters’ Collective. (Dey, who was one of the drafters of the bill, said the welfare board in the state will ensure there is no duplication of schemes.)

Kailasam added that the tax on each transaction could put a burden on consumers eventually.

“A two percent levy on consumers is an added cost that will make this economy even more pricier and may lead to fall in demand and orders, which may become counterproductive for gig workers’ welfare,” he said.

Questions sent by The Reporters’ Collective to Uber India and the Indian food delivery platforms Zomato and Swiggy remained unanswered – as did questions sent to India’s Ministry of Labour and Employment.

Source: al Jazeera 

BDST: 0957 HRS, JULY 27, 2023
SMS