The Indian government is set to introduce a 2% transaction-based levy on platform aggregators to finance social security benefits for over 12 million gig workers, marking a significant step toward formalizing protections for this rapidly expanding workforce.
- 2% levy imposed on aggregator transactions, not total turnover.
- Benefit coverage includes insurance, health, and maternity support.
- Scheme launch targeted for 2027 with specific work criteria.
What happened
The Indian government is finalizing plans to impose a 2% levy on gig economy aggregators, but unlike earlier proposals based on total turnover, this charge will be applied per transaction. This adjustment reflects industry feedback and aims to create a more equitable financial burden across different platforms. The move is backed by the newly formed National Social Security Board, which is tasked with overseeing the scheme's design and implementation.
The planned levy will fund social security benefits for more than 12 million gig and platform workers in India. These benefits are expected to cover areas such as life and disability insurance, accident protection, health, and maternity support. The scheme will be financed entirely by aggregators through a dedicated Social Security Fund, with no direct financial contribution from the central government or gig workers themselves.
Why it matters
India’s gig workforce has been growing rapidly, expanding from 7.7 million in 2020-21 to around 12 million in 2025-26, now accounting for over 2% of the total workforce. Projections suggest this figure could rise to 23.5 million by 2029-30, driving a substantial economic contribution. The new levy mechanism reflects a broader push to integrate gig workers into social protection frameworks, which historically have not covered this segment sufficiently.
The shift to a transaction-based levy addresses concerns about inconsistent definitions of turnover across platforms and aims to prevent one group of aggregators from subsidizing another. By tying social security access to minimum work thresholds, the scheme promotes fairness and ensures that benefits reach workers actively engaged in the gig economy, supporting their financial and health security.
What to watch next
The National Social Security Board is expected to finalize the scheme's details in the coming weeks, ahead of a likely rollout in 2027. Key aspects to monitor include the precise criteria gig workers must meet to qualify for benefits and the range of protections included as the program evolves. While insurance and health benefits are prioritized initially, pensions and old-age benefits may be phased in after assessing long-term worker engagement.
Industry stakeholders will closely watch how the levy impacts platform economics and pricing practices. Additionally, the administrative mechanisms for collecting the levy and distributing the benefits will be critical to successful implementation. This initiative could serve as a model for other countries seeking to balance gig economy growth with worker welfare.