India’s Gig Economy Growth
India’s gig economy has expanded rapidly in recent years. By FY 2024–25, gig workers numbered about 12 million, up from 7.7 million in 2020–21. This sector now comprises over 2% of the total workforce. Growth is driven by digital connectivity, urbanisation, and a shift towards flexible work. This change marks a structural shift in India’s labour market.
Defining Gig Workers
Gig workers are individuals earning income without formal employment benefits. They include cab drivers, food delivery personnel, home cleaners, and other service providers working through digital platforms. Unlike traditional informal workers, gig workers operate in a semi-structured system where tasks and payments are documented. This formalisation brings transparency and some recognition to their work.
Shift from Informal to Semi-Formal Work
Earlier, many workers in trades like carpentry or domestic help were entirely informal. Payments were cash-based and wages negotiable. Digital platforms now fix rates by category and skill, improving fairness. Work is logged and payments are made through formal channels. This shift helps convert unorganised labour into measurable employment, making gig workers visible to the formal economy.
Financial Inclusion and Credit Access
Digitised income records enable gig workers to access formal credit for the first time. Previously, they depended on informal lenders, leading to exploitation. However, conventional credit scoring models do not fit gig workers well. Their irregular incomes and thin credit files exclude many from loans. New credit models are needed to reflect gig work realities.
Innovations in Lending and Credit Scoring
Alternative scoring models use platform data such as earnings consistency and completed gigs to judge creditworthiness. Embedded finance through gig platforms offers micro-loans and salary advances. Digital lending uses behavioural data for better loan underwriting. India’s Account Aggregator framework facilitates secure data sharing, improving credit visibility and enabling gig-friendly financial products.
Future Projections and Challenges
By 2029–30, India’s gig workforce may reach 23.5 million, about 6.7% of the non-agricultural workforce. It could contribute 1.25% to GDP and generate up to 90 million jobs long term. Growth is seen in white-collar freelancing and women’s participation. Challenges remain – income volatility, lack of social security, and safety concerns. Progress in labour rights and digital inclusion is essential for equitable benefits.
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