July 10, 2022

Niti Aayog’s Study Paper on Gig Economy: An Attempt to Institutionalise Precarious Jobs

Arka Rajpandit

THE Modi government’s policy think-tank Niti Aayog has recently come up with a study paper on ‘gig economy’ defining the gig or platform economy as ‘rapidly burgeoning’ and ‘booming’. The policy paper, titled ‘India’s booming gig economy and platform economy: perspective and recommendations on future work’, published on June 27 has recommended steps to provide social security. It is nothing but an attempt to institutionalise the so-called platform or gig economy. 

The study paper estimates that in 2020-21, 77 lakh workers were engaged in gig economy and the total gig work force is expected to expand to 2.35 crore workers by 2029-30. The study paper noted that at present, about 47 per cent of gig workers are in medium-skilled jobs, about 22 per cent in high-skilled and about 31 per cent in low skilled jobs and the trend shows the concentration of workers in medium-skilled jobs is declining and high-skilled ones is increasing. 

To understand the Niti Aayog policy paper, its recommendations and implications on gig workers, it is necessary to have a critical understanding of gig or sharing or platform economy on the premises of Marxist approach. 



In the last decade, we saw the expansion of digital platforms and decentralised indirect and fragile employment relations in global capitalist economy. This process is directly linked to the intensification of work, working day expansion, low remuneration, absence of labour rights and amplification of indirect control over the labour process. 

Replacing stable jobs with outsourcing, temporary contracts, casualised format, etc made working hours and even employment relations more ‘flexible’, fragile, unpredictable and irregular. There are sections of workers whose jobs are completely casualised, such as those who work in the ‘gig economy’ or embodied by corporations such as Uber, Ola, Amazon, and many others. Under capitalism today, investment, innovation, and direct employment relations are no longer profitable for capitalists. Extreme short-termism seeks to reign on the capitalist approach towards employment-management to manage ups and downs, uncertainties in the business/market situations.  

All digital platforms act as mediators or intermediaries connecting participants who then engage in some form of market exchange of goods and services. The continuing advancement in technology of networking has enabled these platforms to develop far-reaching marketplaces and thereby attain leading positions in their respective markets by achieving strong economic scope and scale. There are three main features we see in this digital economy; first one is related to labour. Unlike the standard fixed wage job, in the gig economy the salary depends exclusively on the number of tasks (piece work) performed by the workers. Second is the form of consumption, consumers have a huge variety of options of goods and services through these platforms. Finally the third feature concerns the way in which intermediary company connects producers and consumers via digital platforms.

Capitalist class professes gig as a sharing, flexible one, facilitating movement and also workers’ freedom. But that is just a cover to hide the fact that the main goal is to extract much more from the labour and maximise profits through a more virulent process. Capitalists often advocate that gig offers a new young generation the chance to break from the tradition of the 9am-5pm working day and from the shackles of being employed by a single business. Young workers just want ‘freedom’. These “free” workers are the dynamic driving force behind the on-demand economy, “micro-entrepreneurs” who are pushing capitalism forward with their creativity and ingenuity. 

But, in reality, far from being empowered by the so-called on-demand economy, these workers are to respond to the situation, in the face of severe no-stable-job-available phenomenon. These self-employed piece workers do not represent an aspiring army of entrepreneurs, but are in fact the opposite: the most precarious layer of the working class, still forced to sell their labour, the only commodity they truly own. 

Piece Work and Surplus Value

In ‘Capital’, Marx identifies in piece wage something very similar to what we can find in labour relations in the gig economy. In the chapter on piece wage in Volume 1, Marx explained how this form of salary (payment) was not something strictly new and coexists with other forms of payment. As Marx said, this coexistence always occurred, ‘both forms of wages exist side by side, at the same time”. This idea, however doesn’t contradict the fundamental nature of capitalist salary regime, that is, the forms of salary payment, be it by piece or by time, ‘no way alter their essential nature”. According to Marx, similar to gig, ‘the quality of the labour is here controlled by the work itself, which must be of good average quality if the piece price is to be paid in full’. This means that based on consumer’s evaluation, the goods and services provided may suffer a series of penalties that may lead to even blockages preventing the worker from working for a certain period. Marx further stated piece wage for salary ‘becomes, from this point of view, the most fruitful source of reductions in wages, and of frauds committed by the capitalists’. 

Marx taught us labour power is also a commodity whose value can be similarly defined as that of any other commodity, that is, through socially necessary labour-time expended in it. Labour-power is a commodity that can be sold in the market for its exchange value, which in turn is spent on means of subsistence. Surplus value averages out as average rate of profit for an enterprise and, together with other forms of capital, sources capital accumulation in a capitalist society. This is the main driving force of capitalism. Now, a gig worker is paid per task and not by the hour; this leaves room for the platform to extract absolute surplus value. The amount of time it takes for a gig worker to complete a task depends on their productive capacity, this productive capacity is also related to market conditions and other factors. The higher productive capacity the greater the surplus value generated and appropriated by the platform. The gig worker doesn’t benefit from this and has no bargaining power for distribution of surplus value. The gig economy based on notion of flexible working hours, has allowed for the blurring of the concept of a traditional working day, creating an environment for a 24-hour working culture. This is another example of how abnormally higher surplus value is extracted by platforms by extending the working hours with little or no resistance from gig workers. 



Niti Aayog’s study paper and its recommendations are nothing but mere hoodwinks. Camouflaging the workers interests, Niti Aayog wants to enable whole scale introduction of more precarious jobs even in traditional sectors on the lines of global capitalist trend. Like Skill India initiative, Platform India initiative, the idea mooted by Niti Aayog, will further accelerate platformisation of economy, that means it will threaten the still existing employer-employee relationship. In this study paper, Niti Aayog also stated it will explore the possibilities to formalise the gig economy; in fact, such so-called formalisation is in reality the legitimisation of the very precarious nature of jobs, along with continuing increase in productivity of the workers, leading to more brutal appropriation of surplus/profit.  The real intention of the ruling dispensation is to turn the productive workforce of the country into an army of casual, piece wage workers. It is a grossly anti-worker measure designed to more temporarise and casualise the workforce to serve the interests of the employer class. Eventually all jobs in the industrial sector will be sought to be turned ‘seasonal’. The Modi government introduced ‘fixed term employment’ and later on it was adopted in the labour codes aimed at same direction, accelerating decentralisation and degeneration of the working conditions.

Niti Aayog recommended access to institutional credit may be enhanced through financial products designed for platform workers and those interested to set up their own ventures. This is also a farce, rather a deceptive window-dressing; when there is an acute demand shortage in the economy, assurance of cheap interest loan guarantee will not work. And unless demand is generated, simply providing credit to individuals will be of no use; they will take credit for their working capital only when they want to produce more, for which however there has to be demand.

Citing examples of the US, UK and other developed capitalist countries, Niti Aayog recommended providing social security, insurance, pensions and other benefits. It further stated these proposals ‘could be designed and offered in collaboration with the government, as envisaged under the Code on Social Security 2020. This is also a blatant lie peddled by Niti Aayog. As far as Social Security Code is concerned, part-time workers, own account workers and even agricultural workers are also not covered. The study paper kept mum on minimum wage and provident fund benefit for gig workers. The paper is silent on how exactly the government will ensure that these workers have access to PF or medical care, as available to workers under the ESI scheme. There are no enabling provisions in social security code to ensure pension, PF or similar benefits that can be provided to gig workers. All talks of such social security, pension, etc by NITI Aayog are a deceitful camouflage and the main purpose is to legitimise and push through the latest design of such barbarous precarisation of employment relations through gig/platform work mechanism. Capitalist class will always try to impose further low wages and long hours and complete elimination of all rights of the working class.  This nasty game of deceit must be exposed.