Karnataka’s Proposed Gig Worker Welfare Fund Levy

April 15, 2025

Karnataka is set to implement a differential levy on app-based platforms to establish a social security scheme for gig and platform workers. This initiative, if approved, could shape policies in other states of India. The proposed framework aims to create a dedicated welfare fund without imposing immediate costs on consumers or workers.

Context of the Initiative

Karnataka, home to major tech hubs like Bengaluru, relies heavily on gig workers for services such as ride-hailing and food delivery. The state government plans to introduce fees on these platforms to fund welfare schemes. This move addresses rising concerns regarding the working conditions of gig workers.

Details of the Levy

The proposed fee structure will vary by service category. Different rates will apply to ride-hailing, food delivery, and logistics platforms. These platforms may be required to contribute a percentage of each transaction towards the welfare fund. The fee will range from 1% to 5% based on the commission paid to gig workers.

Legal Framework and Background

The initiative stems from the Code on Social Security, 2020, which allows for a social security fund for gig workers. However, implementation has been slow at the national level. Karnataka’s proposal could be the first execution of this vision at the state level.

Stakeholder Engagement and Implementation Timeline

The government plans to gather feedback from stakeholders before finalising the policy draft. A month will be given for public suggestions. The government aims to roll out the levy after establishing rules under the new law. This process may take at least six months.

Political Support and Historical Context

The initiative has strong backing from the Congress party, which has long advocated for gig worker rights. The proposal aligns with promises made during the assembly elections. Past discussions with gig workers brought into light the need for better protections and benefits.

Broader Implications

If successful, Karnataka’s move could influence national policy regarding gig workers. Other states may follow suit, thereby reshaping the gig economy landscape in India. The initiative also responds to growing demands from labour rights groups for improved working conditions.

Future Developments

Once the law is in place, the government will develop a system for payment and verification of the welfare fee. A gig workers’ welfare board will be established to oversee the implementation of welfare schemes. This initiative may set a precedent for other states in India.

« Previous Post Next Post »