India's Rajasthan plans online surcharge for gig workers' welfare fund

NEW DELHI, July 25 (Reuters) - The Indian state of Rajasthan has approved a bill to impose a surcharge on online transactions via platforms like Amazon (AMZN.O), Ola (OLAE.NS) and Zomato (ZOMT.NS) to fund welfare benefits for gig workers, the first such scheme in the country.

The number of gig workers has grown sharply in India to an estimated 15 million - emerging as a constituency pursued by political parties ahead of elections in five states in the next few months and general elections early next year.

The Rajasthan state assembly approved late on Monday the platform-based gig workers welfare bill, under which online platforms would collect a surcharge of up to 2% on transactions, according to state officials, and deposit the proceeds in a welfare fund to be run by a board with workers, industry and government representatives.

\“With this Act, the interests of gig workers will be protected,\” Ashok Gehlot, the state chief minister said in a statement, noting that despite huge contributions to the economy, gig workers were not covered under current labour laws.

The bill is likely to benefit over 400,000 gig workers in the state and also has a provision to set up a tribunal with some judicial powers to address gig workers grievances against their aggregator platforms, officials said.

Gig workers welcomed the Rajasthan bill, declaring it a victory for the rights of millions of workers.

\“This historical step will provide a legal guarantee of social security to gig workers,\” said Sheik Salauddin, national general secretary of the Indian Federation of App-based Transport Workers (IFAT), which lobbied for the surcharge.

At the national level, Prime Minister Narendra Modis administration got parliaments approval in 2020 to amend labour laws, including a new Social Security Code, that proposed a social security fund for gig workers through contributions from aggregators.

However, implementation has been deferred after opposition from some companies and unions. Gig workers have subsequently started lobbying with opposition parties.

This month the southern state of Karnataka, ruled by the opposition Congress party, announced free insurance coverage for gig workers.

Gig workers associations have urged the federal government to take steps to ensure minimum wages, fixed working hours and social security benefits at the national level.

\“We hope before elections, the Modi government will take steps to introduce benefits to gig workers,\” said Salauddin.