Evaluate the aggregator-contribution model for funding social security of platform workers. Is it fiscally and economically sustainable?

The Code on Social Security, 2020 requires aggregators to pay 1–2% of annual turnover into a social security fund for gig and platform workers. The payment is capped at 5% of what they pay or owe those workers [1]. The idea that the platform which profits from the labour should pay for it is sound. Whether it lasts depends on how the levy is designed and enforced.

Merits of the model

• Platforms pay, not the state alone: the levy applies to the aggregators listed in the Code's Seventh Schedule, such as ride-sharing and food delivery apps [1].
• 5% cap: this limits the burden on platforms and keeps the business viable.
• Pooled fund and portable ID: contributions go into one Social Security Fund, and the Aadhaar-linked e-Shram ID lets benefits follow a worker across apps [2].
• The fund grows with the sector: the gig workforce is projected to rise from 77 lakh (2020-21) to 2.35 crore by 2029-30 [3].

Limitations

• Rate not yet notified: the Standing Committee on Labour asked for universal coverage backed by firm financial commitments and a timeline [5]. Neither has been set.
• Hard to credit to individual workers: the levy is based on a company's total turnover, so it cannot show how much each app paid for a worker who uses two or three apps.
• Low registration: only 5.09 lakh gig workers were on e-Shram by November 2025 [4]. Money collected may not reach the people it is meant for.
• Risk of paying twice: Rajasthan charges a fee on each transaction [6] and Karnataka charges 1–2% of each worker payout [7]. Social security is a Concurrent List subject, so a platform could pay both the Central levy and a State fee for the same worker.

Fiscal and economic sustainability

• Fiscally, only partly: the revenue base grows as the sector grows. But old-age and maternity benefits are long-term costs, so the fund needs regular actuarial (long-term cost) reviews.
• Economically, it depends on the design: platforms with thin margins may pass the cost on to customers or cut worker pay. PRS notes that a fee based on payouts can treat similar services differently depending on the business model [7].
• Enforcement is possible: Rajasthan charges 12% interest on late payment and can recover unpaid dues as arrears of land revenue [6].

Overall, the model is fair and can grow with the sector, but it is not yet sustainable as designed. Four steps would make it so:

• notify the levy rate soon;
• credit each transaction's contribution to the worker's own account;
• let the National Social Security Board count State fees against the Central levy;
• add contributions from government and workers.

With these, it can provide the social protection that Article 41 and SDG 1.3 call for.