Critically evaluate ‘Gig Economy’ in the formal and informal sectors in India. (250 Words] (15)

Critically evaluate ‘Gig Economy’ in the formal and informal sectors in India. (250 Words] (15)

The gig economy—short-term, on-demand jobs—has transformed India’s economy. It offers flexibility and opportunities for individuals and organizations, but it also raises issues that must be considered. Nearly 80 million Indians work in the gig economy, which is rising rapidly.

Formal Sector:

  • Companies use gig workers to cover specialized roles, adjust to changing demands, and expand their talent pool. This flexibility lets organizations adapt quickly to market changes and seize opportunities.
  • The gig economy has also spurred innovation by fostering digital platforms that seamlessly connect individuals and employers. These platforms match abilities and needs efficiently, lowering transaction costs and enhancing production.
  • But formalizing the gig economy raises questions about worker protections and labor standards. Without formal job contracts, gig workers often lack social security, health insurance, and paid time off. This susceptibility might lead to financial insecurity and exploitation.

Informal Sector :

  • The informal sector, which dominates India’s economy, has fully embraced the gig economy. From delivery to house repairs, people provide critical services and generate cash.
  • Many gig economy workers enjoy flexibility, autonomy, and income supplementation. It lets people make money from their skills and time without traditional work.
  • Although promising, the informal gig economy poses issues regarding worker rights and social security. Gig workers sometimes lack minimum salaries, paid time off, health insurance, and other benefits due to the lack of formal employment contracts.
  • Gig workers risk exploitation, unjust remuneration, and risky conditions due to their vulnerability. During low demand or economic downturns, gig employment can also cause income uncertainty and financial instability.

Way forward:

  • Set minimum wage and overtime for gig workers.
  • Require health insurance and accident compensation from social security.
  • Protect gig workers from abuse and unfair practices by enforcing labor laws.
  • Facilitate skills training and growth.
  • Create social safety nets for gig workers during unemployment and illness.

India may benefit from the gig economy while protecting workers’ rights and well-being by taking these steps. A healthy gig economy may boost inclusive economic growth and allow people to use their abilities and secure their livelihoods.

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