Union Budget 2026: Economic Survey Sounds Alarm on Gig Economy. The Budget 2026 Must Respond

The Economic Survey’s treatment of India’s gig economy is unusually candid. While it celebrates the sector’s rapid expansion—projecting that gig and platform work could contribute Rs. 2.35 lakh crore to GDP by 2030—it also acknowledges the fragility underpinning this growth. Income volatility, lack of social security, limited access to credit, and regulatory gaps are identified as structural risks, not transitional shortcomings.

According to the Survey, India’s gig workforce has grown from 77 lakh in FY2021 to around 1.2 crore in FY2025, driven by smartphone penetration, digital payments, and the rapid scale-up of digital platforms. This is no longer a marginal segment of the labour market. Gig workers are now central to urban employment, service delivery, and consumption.

The question the Survey implicitly raises—and leaves unanswered—is whether the Union Budget will treat this workforce merely as a statistical success or recognise it as a policy responsibility.

Labour Law Insufficient in Protecting Workers 

The Survey frames the gig economy as both opportunity and warning. On the one hand, it is presented as a key source of job creation at a time when formal employment growth remains uneven. On the other, it is built on work arrangements that shift risk almost entirely onto workers. Earnings fluctuate daily, a single illness or injury can wipe out incomes, and most workers operate outside formal insurance and credit systems.

What the Survey does not provide is a clear fiscal or regulatory roadmap to address these vulnerabilities. That omission effectively passes the burden to the Union Budget. If gig work is indeed here to stay, as the Survey suggests, then the Budget must confront a basic policy question: what does economic security look like for a workforce that exists outside the traditional employer–employee relationship?

Dedicated Social Security Fund for Gig Workers 

Unlike conventional employment reforms, protecting gig workers cannot be achieved through labour law alone. It requires sustained budgetary commitment.

Three policy imperatives follow directly from the Survey’s findings.First, social security must be backed by funding. The Survey’s acknowledgment of income insecurity strengthens the case for a dedicated social security fund for gig and platform workers, government co-contributions to insurance, health cover, and old-age security, and explicit budgetary provisioning. 

Without fiscal allocations, social security remains an aspirational promise rather than an enforceable right.

Second, credit inclusion requires state intervention. 

The Survey flags credit exclusion as a major constraint for gig workers, many of whom lack formal payslips, stable incomes, or employer guarantees. The Budget could address this through tailored credit guarantee schemes, the integration of platform earnings data into formal lending assessments, and incentives for banks and NBFCs to design income-flexible financial products. Absent such measures, gig workers remain productive yet financially invisible.

Third, platform accountability cannot be cost-free. While the Survey hints at the need for stronger regulation of digital platforms, regulation without enforcement capacity is hollow. 

The Budget’s role here is indirect but crucial—funding labour departments’ digital monitoring capabilities, supporting grievance redress mechanisms, and signalling that platforms, not just workers, must share the cost of adjustment. If platforms capture value, they must also bear risk.

Precarity Beneath the Numbers

The Survey underlines the precarious income levels prevalent in the sector. About 40 per cent of gig workers report monthly earnings below Rs. 15,000, raising concerns about job quality even as platforms expand across e-commerce, logistics, transportation, BFSI, and IT services.

Platform-driven work arrangements add another layer of stress. The Survey notes that algorithms increasingly control work allocation, performance monitoring, wages, and supply-demand matching—raising concerns about algorithmic bias, opaque decision-making, and burnout.

Beyond earnings, there are fears of displacement. Limited skilling and the threat of job losses due to technological advances such as artificial intelligence and machine learning further compound worker vulnerability, particularly among low- and medium-skilled gig workers.

Recognition Without Protection

The Survey also points to emerging policy responses. India’s new labour framework has begun to formally acknowledge gig and platform workers. The Labour Codes recognise this workforce, expanding the scope of social security, welfare funds, and benefit portability. Under the Code on Social Security, a gig worker is defined as a person earning from work arrangements outside a traditional employer–employee relationship.

However, the Survey cautions that formal recognition alone is insufficient. Classified as freelancers or independent contractors, most gig workers continue to lack employment benefits such as paid leave, minimum hours, health coverage, and income stability—resulting in poor job security and persistently low earnings.

According to estimates cited by NITI Aayog, high-skilled gig workers could account for 27.5 per cent of the workforce by 2030, while low-skilled workers may make up 33.8 per cent. 

Policy, the Survey argues, should aim to ensure that gig work becomes a choice rather than a necessity, enabling workers to move into better-paying and more secure forms of employment over time.

Learning from Global Regulation of Gig Economy

At this stage it is crucial to look at the international regulatory approaches. Spain’s ‘rider law’, which reclassified food delivery workers as employees, and the European Union’s Platform Workers’ Directive (2024), aimed at correcting misclassification and regulating algorithmic decision-making, are viable examples. 

Cities such as Seattle and New York have already introduced minimum wages, deactivation appeal mechanisms, and anti-retaliation protections for app-based workers.

As India’s gig economy expands, the Survey argues that strengthening social security coverage—including provident fund access, insurance, and maternity benefits—is essential. It also calls for algorithmic transparency and worker-friendly practices, urging a reshaping of the social contract so that the benefits of platform growth are shared more equitably.

“The goal of gig economy policy,” the Survey states, “should be to reshape the terms so that workers exercise real choice rather than being pushed into gigs due to weak demand, skill mismatch, or the absence of a safety net.”

The Economic Survey has made the diagnosis. The Union Budget will determine whether the state is willing to act on it.