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Currently, India has around 10 million gig workers, of which nearly 7 million are engaged in last-mile delivery on bikes. Union Budget 2025 is taking a step in formalising the sector. Image for Representation. PTI

In a significant move, Finance Minister Nirmala Sitharaman, in her Union Budget 2025, has brought much-needed relief and recognition to India’s growing gig economy.

With the workforce rapidly expanding, the government’s latest initiative aims to formalise the sector and empower millions of independent workers across the country through social security benefits and facilitating their access to healthcare.

Here’s what the Budget has in store for the gig workers.

India’s gig economy has been expanding at an unprecedented pace, with millions of workers entering the sector in recent years.

According to estimates from TeamLease, over 85 per cent of India’s workforce operates in the informal sector, with a significant portion comprising gig workers.

Currently, India has around 10 million gig workers, of which nearly 7 million are engaged in last-mile delivery on bikes. This is significantly higher than the NITI Aayog estimate of 7.7 million in 2021.

With the boom in quick commerce platforms like Zepto, Blinkit, and Instamart, along with the rapid expansion of cab service platforms like Ola and Uber and food aggregators such as Swiggy and Zomato, the demand for gig workers has jumped massively. Zomato alone had 1.5 million delivery partners fulfilling orders in 2024.

As per NITI Aayog, the gig workforce is projected to triple to 23.5 million by 2029-30. However, given the rapid expansion of the digital economy in India, the actual number could far exceed these estimates.

With their rising numbers, gig workers can potentially play a crucial role in keeping the economy running. According to a white paper by the Forum for Progressive Gig Workers, cited by CNBC, the gig economy market will grow at a 17 per cent compound annual growth rate (CAGR) to reach a gross volume of $455 billion by 2024.

Moreover, it has the potential to contribute 1.25 per cent to India’s GDP by 2030 and generate 90 million jobs in the long run.

However, despite its scale and importance, gig workers are not formally part of a company, meaning they are not entitled to social security benefits like insurance, gratuity, or paid leave like other on-roll employees.

While companies like Swiggy and Zomato provide insurance support for their gig workforce, many freelance and contractual workers who are not affiliated with a major brand remain unprotected. Moreover, many of their jobs require them to spend long hours on the road, often under tight deadlines, making them vulnerable to accidents and financial instability.

This lack of structured benefits and protections remains one of the biggest challenges in the gig economy and the Budget 2025 has something that can prove to be a step in the right direction.

Also read: A pragmatic, pro-middle class budget that will boost consumption and drive demand

In a major step towards improving the welfare of gig workers, Finance Minister Nirmala Sitharaman announced a Social Security Scheme in her Budget 2025 speech.

A key highlight of this initiative is the inclusion of gig workers under the government’s flagship health insurance programme, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY).

This scheme, currently implemented by the National Health Authority (NHA), provides health coverage of Rs 5 lakh per family per year. It is the world’s largest health insurance programme, offering benefits without any waiting period or restrictions on pre-existing health conditions.

The initiative, which is expected to benefit nearly 10 million (1 crore) gig workers, said Sitharaman.

Shefali Goradia, Chairperson of Deloitte South Asia told Times Now that this new measure will bring about “inclusive development”.

“Prioritising sustainable growth, innovation, and green energy solutions and measures such as social security scheme for gig workers, setting up of digital public infrastructure network and moving the further growth in GCCs to Tier II cities show, that the government is willing to walk the talk on democratisation of the economy,” Goradia added.

Also read: Union Budget 2025: Mobiles, EVs, medicines, what is getting cheaper, what is costlier?

Sitharaman further announced that the government will arrange ID cards for the gig workforce on the e-Shram portal.

An online portal, managed by the Labour Ministry, e-Shram serves as a national database for unorganised workers, making it easier for gig workers to register and access government welfare schemes. The introduction of ID cards is expected to further formalise their status, ensuring they receive the benefits they are entitled to.

Madhav Krishna, founder and chief executive of Vahan.ai, of a Bengaluru-based blue-collar recruitment platform, told Live Mint that “the issuance of identity cards will give gig work the status of actual jobs. So far, gig work has been seen as temporary and mainly for side income. Food and grocery delivery platforms, e-commerce companies, and logistics firms will see massive benefits as formalisation kicks in.”

Balasubramanian Anantha Narayanan, senior vice president at recruitment platform Teamlease Services Limited also told the news outlet that, “officially recognising and formalising the gig economy is a step in the right direction."

Additionally, the Finance Minister introduced a dedicated social security scheme for online platform workers, which will be implemented through a public-private partnership (PPP) model. “States will be encouraged to adopt this model and can seek assistance from the India Infrastructure Project Development Fund (IIPDF) scheme to prepare PPP proposals,” Sitharaman stated.

While these initiatives mark a crucial step forward, challenges remain. The Code on Social Security, enacted by Parliament in 2020, lays out a framework for social security measures for gig workers, including accidental cover, health and maternity benefits, pension, and life and disability insurance. However, the code has yet to be implemented. How these new measures will impact the unorganised sector in the long run remains to be seen.

With input from agencies