India stands on the cusp of a new workforce revolution. As the country sets its sights on becoming a Developed Nation by 2047, the gig economy is expected to play a major role in shaping the nation’s future. In fact, according to the VV Giri National Labour Institute’s report, “Gig and Platform Workers: Vision 2047,” gig workers are projected to make up 14.89% of India’s non-agricultural workforce by 2047, a sharp rise from 2.6% in 2020-21.

This transformation is driven by several key factors: demographic shifts, the rise of technology, and the growing preference for flexible, project-based employment. In the next two decades, India’s gig workforce is expected to expand significantly, offering millions of workers opportunities to contribute to the economy in dynamic ways.

At the heart of this transformation is the platform economy, digital platforms that enable individuals to find short-term, task-based jobs. These platforms have disrupted traditional work patterns, enabling a global workforce to connect and collaborate in previously impossible ways.

But as businesses increasingly turn to gig workers, they must manage the unique challenges that come with managing a temporary, informal workforce. The report highlights not only the enormous growth potential of gig work but also the regulatory, economic, and social challenges that businesses and gig workers will face in the coming years.

The Gig Economy’s Rise

India’s gig economy is a rapidly expanding sector that is set to become a major contributor to India’s labour market by 2047. The report offers critical projections and data that highlight the transformative potential of gig work in India.

Gig Workforce Growth

As of 2020-21, India had approximately 7.7 million gig workers, constituting 2.6% of the non-agricultural workforce. Fast forward to 2047, and it’s projected that India’s gig workforce will reach 61.6 million, making up 14.89% of the non-agricultural workforce. This growth represents an increase of over sevenfold in the next 17 years, driven by several key factors, including digital platforms, technological advancements, and an increasing shift towards non-traditional work arrangements.

Contributions Of The Gig Economy To GDP

The gig economy is expected to make a significant economic contribution. As highlighted in the report, the total transaction volume of the gig economy in India could reach $250 billion by 2030, contributing 1.25% of GDP. 

The digitalisation of India’s economy will be a primary catalyst for this growth. As more sectors, such as healthcare, education, and consulting, embrace digital platforms to meet their needs, the gig economy will continue to expand its footprint across industries.

Drivers Of Gig Economy Growth

Several factors are driving the gig economy’s rapid rise:

1. Technological Advancements: The expansion of smartphone use, internet penetration, and the development of platform technologies have made gig work more accessible.

2. Digitalisation of Services: Platforms are expanding their reach, offering more gig roles across various sectors such as transportation, food delivery, household services, and personal care.

3. Rise of Remote Work: The COVID-19 pandemic accelerated the adoption of remote work, further cementing the role of gig work in sectors such as IT, design, and writing. Remote work offers flexibility, which is one of the most attractive features of gig employment.

4. Youth and Female Participation: As highlighted in the report, youth and women are embracing the gig economy, driven by the flexibility it offers. This has allowed women to break into traditionally male-dominated sectors like driving and handyman services.

Another interesting observation from the report states that the gig economy is not just confined to the metros; it is spreading across tier-2 and tier-3 cities as well. This regional distribution highlights the inclusive nature of the gig economy and its potential to provide income-generating opportunities across the country.

Challenges And Risks In The Gig Economy

While the gig economy offers substantial growth opportunities, it is not without its challenges. These challenges need to be understood by businesses that rely on gig workers for their operations. The report outlines several key issues that are critical to the future of gig work in India.

1. Informality of Gig Work: Lack of Social Protections

One of the most pressing issues within India’s gig economy is the informality of gig employment. According to the report, 82.5% of gig workers in India are informal employees. For instance, in a traditional employment model, workers are usually eligible for:

• Maternity benefits

• Health insurance

• Pension plans

• Paid sick leave

However, gig workers are typically excluded from such schemes due to their informal status. As a result, many gig workers, especially in sectors like ride-sharing, food delivery, and household services, lack adequate healthcare and sick leave protections. In the post-pandemic era, the absence of health insurance and other protections has become a critical issue, especially for high-risk workers like delivery personnel or drivers.

Without access to social benefits, gig workers are more vulnerable to financial instability in the event of an accident, illness, or economic downturn.

2. Wage Disparities: Income Inequality Among Gig Workers

The wage gap in the gig economy is another significant challenge. The report indicates that women gig workers earn less than their male counterparts. This wage disparity is particularly pronounced in female-dominated sectors such as beauty work, cleaning, and caregiving.

Gender-based wage gaps exist because women are often pushed into lower-paying roles, which typically require less skill or offer fewer opportunities for advancement. This is compounded by gender stereotypes and discrimination, both of which limit the income-earning potential for women in the gig economy. The report notes that women gig workers are less likely to get high-paying jobs than their male counterparts, especially in tech-driven roles like IT development or design. Instead, women are often confined to lower-paying sectors like home-based services and caregiving, where their work is undervalued.

In addition to gender disparities, age-based wage disparities also exist. Youth workers, although an integral part of the gig workforce, often face challenges in securing higher-paying, more stable work. Many young gig workers, especially those in the early stages of their careers, are limited to low-wage tasks, even if they possess relevant qualifications or skills.

3. Vulnerability To Exploitation: Inconsistent Payment And Job Insecurity

Because of the on-demand nature of gig work, workers are often subjected to inconsistent payment schedules, variable job opportunities, and uncertainty regarding workload. The report highlights that many gig workers are paid on a per-task basis, which leads to income fluctuations from week to week.

This lack of stable income can make it challenging for gig workers to meet their basic needs, such as paying for housing, healthcare, and education. Furthermore, many gig workers face challenges in getting paid on time. Some platforms have been criticised for delaying payments or providing inadequate payment structures, which create financial strain for gig workers. This payment instability can lead to discontent among workers, ultimately impacting their motivation and performance.

Moreover, job insecurity is a persistent issue. Gig workers do not have long-term employment contracts, leaving them with little recourse if they are dropped from a platform or face unfair treatment. This instability is often exacerbated by platform-based policies that allow companies to remove workers from the platform without clear justification or warning, further adding to the workers’ vulnerability.

4. Digital Literacy Barriers

Another significant challenge for gig workers, particularly for women and youth, is the issue of digital literacy. The report highlights that women in India are less likely than men to use the internet and less likely to own a mobile phone. This digital divide makes it harder for women to access gig work and limits their opportunities to engage in higher-paying digital gigs.