The Code on Social Security, 2020, was a genuinely forward-looking reform. By formally recognising gig workers and bringing them within a national social security framework, India moved ahead of countries still debating how gig work should be classified. That deserves credit.
But one part of the framework deserves another look: how platform contributions to the social security fund are calculated.
The law currently pegs contributions to platform turnover. That is the wrong yardstick. If the objective is social security for gig workers, the contribution base should measure gig worker activity, not the size of the platform's top line.
Some analysts defend the turnover link on grounds of proportionality: every platform pays the same percentage, so larger businesses pay more. True, but that is proportionality to revenue, not to the obligation the system exists to fund. Platform turnover and the scale of gig work are simply not the same thing.
A company's turnover includes commissions, subscriptions, advertising, inventory sales and ancillary services. Much of this has no relationship with gig worker participation or earnings.