Answer

India’s workforce is predominantly informal, with over 91% (Periodic Labour Force Survey, 2023) engaged in informal or unorganised employment. With the rise of gig work, platform labour, and hybrid employment models, a future-ready, inclusive, and fiscally viable social protection system is a critical policy need.

Evolving nature of informal work

• Emergence of Platform and Gig Work: Nature: App-based work (e.g., Zomato, Uber, Swiggy) offers flexible hours but lacks job security and social protections.
  For example: As per NITI Aayog (2022), India had over 7.7 million gig workers, projected to grow to 23.5 million by 2030.
• Informalization Within Formal Jobs: Even in formal enterprises, many roles (e.g., contract workers, sanitation staff, security guards) are outsourced without benefits, blurring the line between formal and informal work.
• Rising Female Participation in Home-Based Informal Work: Post-pandemic, more women are engaged in home-based micro-enterprises, digital sales, or freelancing.
• Hybrid Informal Employment: Many workers now engage in multiple informal gigs across sectors, often mixing offline and online jobs.
  For example: A person may work as a cab driver during the day and deliver food at night—no formal employer in either.
• Sectoral Diversification: Informal work is no longer confined to construction or agriculture but now spans IT-enabled services, e-commerce, logistics, and content creation.
• Fluid and Precarious Employment Relations: Informal workers today often work with no clear contracts, undefined work hours, and variable incomes, making social protection and labour rights enforcement difficult.

Barriers in Current Social Protection Mechanisms

• Fragmented Welfare Architecture: India’s welfare systems are scattered across multiple boards with overlapping mandates, leading to inefficiency and non-utilisation of funds.
• Piecemeal Policy for Worker Categories: Social security schemes emerge reactively and are often designed only after new forms of work like gig work become widespread.
  For example: While gig workers are being recognised, domestic workers and waste pickers remain excluded from mainstream protections.
• Lack of Awareness and Digital Divide: Many informal workers remain unaware of existing schemes or face difficulty registering due to lack of digital access or literacy.
• Inadequate Implementation of Labour Codes: The Code on Social Security, 2020 remains under-implemented in many states due to administrative delays and lack of clarity in rules.
  For example: As of early 2025, around 20 states fully implemented the Code on Social Security.
• Absence of Universal Social Security Identity: There is no single social security number or portable account for tracking multiple benefits, leading to fragmented service delivery.

Components of a Future-Ready Social Protection Framework

• Universal, Portable Social Security Accounts: Introduce a Universal Social Security Account (USSA) linked to Aadhaar and mobile, portable across employers and geographies.
  For example: A similar mechanism is being piloted under the e-Shram portal for over 30 crore informal workers.
• Mandatory Platform-Based Contribution System: Legally mandate digital platforms to contribute to a welfare fund based on worker activity.
• Sector-Neutral and Worker-Centric Design: Eliminate arbitrary distinctions (e.g., gig vs. domestic work) in defining informal work eligibility.
  For example: All workers, including beedi workers, street vendors, agricultural labourers, should access a unified system.
• Decentralised but Accountable Implementation: Empower States with flexibility under the Code on Social Security, while enforcing auditable standards of welfare board performance.

Fiscally Sustainable Implementation Strategy

• Cross-Subsidisation through Progressive Contributions: High-revenue platforms (like Zomato, Amazon, Flipkart) contribute more to the social security pool; micro and nano enterprises receive graded waivers.
• Efficient Utilisation of Existing Welfare Cess: Automate cess collection and disbursal with clear time-bound usage guidelines to prevent hoarding of welfare funds.
  For example: ₹70,744 crore in unused cess with welfare boards (as per RTI) could immediately support universal health or pension coverage.
• Rationalisation of Schemes: Streamline and merge redundant central and state welfare schemes to reduce overlaps and administrative costs.
  For example: India runs over 400 centrally sponsored schemes—rationalising them under umbrella programs like e-Shram can improve efficiency.
• Leverage Technology to Reduce Leakages: Use Aadhaar-based Direct Benefit Transfer (DBT), UPI-linked wallets, and e-Shram integration to ensure targeted delivery and minimise fraud.
• Corporate Social Responsibility (CSR) Alignment: Incentivise companies to channel a portion of their CSR obligations towards welfare programs for informal workers.
  For example: CSR funds can co-finance training programs or digital access for women gig workers and rural artisans.

India’s informal workforce needs a universal, portable, tech-driven, and fiscally viable social protection system that moves beyond the legacy welfare-board approach. A future-ready framework should anticipate evolving job formats, ensure no worker is left behind, and promote dignity, security, and opportunity for all.

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