Suboptimal Outcomes Social Security Boards for Unorganised, Gig and Platform Workers

UPSC Syllabus: Gs Paper 2- Constitution of India

Introduction

The Union Labour Ministry has constituted the National Social Security Boards for Unorganised Workers and Gig and Platform Workers under the Code on Social Security. These Boards aim to strengthen social protection for vulnerable workers through welfare schemes and institutional oversight. However, their centralised composition and representation gaps raise concerns about inclusive decision-making and cooperative federalism. Effective implementation, adequate financing and stakeholder participation are essential to achieve meaningful social security.

Social Security: Meaning, Significance and Constitutional Basis

1. Meaning: Social security protects individuals against economic and social distress arising from old age, unemployment, sickness, disability, work injury, maternity and loss of the breadwinner.
2. Constitutional Basis: Entries 23 and 24 of the Concurrent List cover social security, social insurance, employment and welfare-related matters, enabling both the Centre and States to legislate in relevant areas.
3. Directive Principles of State Policy (DPSP): Article 41 provides for public assistance in cases of unemployment, old age, sickness and disability, subject to the State’s economic capacity. Article 42 promotes humane working conditions and maternity relief, while Article 43 calls for a living wage and decent standard of life.

Gig and Platform Workers: Growing Workforce and Social Security Needs

1. Workforce Size: The NITI Aayog’s June 2022 report estimated 77 lakh gig workers in 2020–21, projecting an increase to 2.35 crore by 2029–30. These figures are estimates and projections.
2. Employment Share: Gig workers constituted 2.6% of the non-agricultural workforce in 2020–21, projected to rise to 6.7% by 2029–30. Their corresponding shares of the total workforce were estimated at 1.5% and 4.1%, respectively.
3. Welfare Measures: The Union Budget 2025–26 announced identity cards, e-Shram registration and healthcare coverage under Pradhan Mantri Jan Arogya Yojana (PM-JAY) for gig workers, with nearly 1 crore workers expected to benefit.
4. Registration: The e-Shram portal had registered 31.82 crore unorganised workers as of 3 August 2026, including workers from different categories. Registration does not necessarily establish actual receipt of social security benefits.

National Social Security Boards: Composition, Functions and Financing

1. Legal Basis: Section 6 of the Code on Social Security provides for the constitution of the National Social Security Board for Unorganised Workers, chaired by the Union Minister for Labour and Employment. The separate Board for Gig and Platform Workers is constituted under the relevant provisions of the Code.
2. Board for Unorganised Sector Workers: The Board has 40 members nominated by the Union Government, including 7 representatives of unorganised sector workers and 7 representatives of employers.
3. Board for Gig and Platform Workers: The Board has 22 members, including 5 representatives each from aggregators and gig and platform workers, besides representatives of relevant institutions, experts and 5 representatives of State Governments.
4. Chairperson: Both Boards are chaired by the Union Minister for Labour and Employment.
5. Functions: The Boards recommend social security schemes, advise the Central Government, monitor central welfare schemes, review State-level recordkeeping and examine expenditure from funds and accounts, besides performing other assigned functions.
6. Nature of Powers: The Boards primarily perform advisory and monitoring functions. Scheme notification and implementation remain dependent on the competent government and designated agencies, limiting the Boards’ direct enforcement role.
7. Social Security Benefits: Section 114 of the Code on Social Security provides for schemes covering life and disability insurance, accident insurance, health and maternity benefits, old-age protection, crèche facilities and other benefits.
8. Financing Framework: Schemes may be financed by the Central Government, State Governments, aggregators, workers or through combined contributions, depending on the scheme. Eligible Corporate Social Responsibility (CSR) funds may also support welfare initiatives.
9. Aggregator Contribution: Section 114 provides for a notified contribution rate of 1%–2% of annual turnover, subject to a ceiling of 5% of the amounts paid or payable to gig and platform workers. Taxes, levies and cesses paid or payable to the Central Government are excluded from annual turnover.

Key Concerns: Centralisation, Representation and Federalism

1. Centralised Governance: The Union Government’s dominant role in constituting and nominating Board members may limit decentralised decision-making and stakeholder participation.
2. Representation Gaps: Concerns arise regarding adequate representation of opposition Central Trade Unions, opposition-governed States and diverse worker groups, potentially weakening inclusive decision-making.
3. Federal Concerns: Since labour is in the Concurrent List, social security requires Centre-State coordination. Centralised decision-making may weaken cooperative federalism despite State Governments’ role in implementation.
4. Stakeholder Influence: Representation alone may not ensure meaningful participation unless workers’ concerns influence scheme design, recommendations and implementation.
5. Parallel State Frameworks: State-level initiatives, including those in Rajasthan, Karnataka, Bihar and Jharkhand, highlight the need to coordinate national and State frameworks. Their legal and implementation status should be distinguished to avoid fragmented protection.

Persistent Social Security Deficit and Implementation Gaps

1. Inadequate Protection: A large section of India’s workforce remains in informal or unorganised employment, facing limited access to predictable income, insurance and welfare benefits.
2. Coverage versus Adequacy: Reported social protection coverage rose from 19% in 2015 to 64.3% in 2025, covering over 94 crore people. However, receipt of at least one benefit does not necessarily ensure comprehensive protection.
3. Financing and Implementation: Effective welfare delivery depends on timely contribution notifications, adequate fund collection, predictable disbursement and transparent expenditure.
4. Portability Challenges: Migrant and platform workers operating across States may face difficulties accessing benefits due to fragmented databases, registration systems and inadequate portability.

Way Forward

1. Inclusive Representation: Ensure meaningful participation of workers, trade unions, employers, aggregators, civil society and State Governments.
2. Cooperative Federalism: Institutionalise Centre-State consultation, coordination mechanisms and clear implementation responsibilities.
3. Sustainable Financing: Operationalise contribution mechanisms, ensure timely fund collection and expenditure, and strengthen financial accountability.
4. Portable Protection: Develop interoperable databases and portable entitlements to enable workers to access benefits irrespective of location or platform.
5. Effective Implementation: Establish measurable targets, transparent monitoring, grievance-redress mechanisms and regular reporting on actual benefit delivery.
6. Institutional Reforms: Strengthen worker participation, accountability and federal cooperation to translate welfare recommendations into tangible outcomes.

Conclusion

The Boards are an important step towards protecting vulnerable workers. However, their success depends on inclusive representation, adequate financing and effective implementation. Cooperative federalism and portable benefits must be strengthened. Social security commitments must translate into accessible and reliable protection.

Question for practice:

Examine the concerns associated with the composition and functioning of the National Social Security Boards for unorganised, gig and platform workers in India.

Source: The Hindu