Millions of Indian gig workers are stuck in low-pay jobs, Economic Survey finds
The report argues policy should help shift workers from being forced into gig work out of necessity to choosing it willingly, whether as a primary income source or to supplement other earnings.
India's gig workforce has surged 55% since 2021 to reach 12 million workers, now representing over 2% of the country's labor force, according to the government's latest Economic Survey released Thursday.
But the rapid expansion has exposed deep fault lines in worker protections, with 40% earning below Rs 15,000 monthly. The report notes that workers cannot afford the basic equipment needed to escape low-paying gigs.
"Many cannot move from low- to medium-skilled gigs because they lack tools," the report notes, pointing to bikes, cars, or specialized equipment as barriers. Access to capital remains a critical constraint. Workers cannot upgrade from motorcycle delivery to car-based services without financing.
The survey proposes platforms and employers to co-invest in worker assets and training. This would enable delivery workers to acquire vehicles for ride-hailing, or basic equipment for skilled trades.
India's gig economy is projected to contribute Rs 2.35 lakh crore ($28 billion) to GDP by 2030 and represent 6.7% of the non-agricultural workforce. But without addressing access to productive assets, millions risk being locked into precarious, low-wage work even as the sector expands.
Ecommerce dominates the sector with 3.7 million gig workers—roughly 31% of the total—followed by logistics at 1.5 million.
Improving gig work
Drawing on McKinsey research, the survey categorises workers into four groups: those choosing gig work for primary income, those supplementing regular earnings, those forced into gigs while preferring stable jobs, and those financially strapped and working multiple gigs to survive.
The report argues policy should help shift workers from being forced into gig work out of necessity to choosing it willingly, whether as a primary income source or to supplement other earnings.
The survey also proposes eliminating the cost advantage firms gain by classifying workers as independent contractors instead of employees by establish minimum earnings per task or per hour, including the time workers spend waiting for assignments.
"Taken together, the goal of gig-economy policy should be to reshape the terms so that workers exercise real choice rather than being pushed into gigs due to weak demand, skill mismatch, or the absence of a safety net," the survey said.
The Economic Survey flags platform algorithms as a growing source of risk for gig workers, noting that they control work allocation, performance monitoring, wages and supply-demand matching with little transparency or accountability. This concentration of decision-making power, the Survey argues, can lead to algorithmic bias, unpredictable incomes and worker burnout, while leaving workers with limited avenues for redress in cases such as sudden deactivations.
As the gig economy expands, the Survey stresses the need for clearer rules on algorithmic transparency and worker protections to ensure that digital management systems do not undermine fair pay, job security and economic dignity.
Policy has begun to catch up. The Code on Social Security formally recognises gig and platform workers as a distinct category, extending the possibility of welfare schemes and benefit portability. This is a break from India’s historical treatment of gig workers as informal labor outside the scope of regulation. But recognition alone does not resolve the economic incentives that keep companies relying on contractors rather than employees.
The report also highlights tightening global regulations on platform work. Spain introduced its "ley rider" in 2021, reclassifying food courier workers as employees rather than self-employed contractors and establishing the first rules governing algorithmic management in the workplace.
The European Union followed with its Platform Workers Directive in 2024, designed to correct the employment status of misclassified gig workers, mandate transparency in algorithmic decision-making, and regulate how platforms use data to manage workers.
This year, the International Labour Organization initiated formal discussions on establishing international standards for decent work in the platform economy, focusing specifically on fair wages, working conditions, and social protections.
In the United States, cities including Seattle and New York have implemented their own worker protections, including anti-retaliation measures, deactivation appeals, and minimum wage laws specifically for app-based workers.