The Political Economy of Gig Pensions

Since 1991, the limited gains attained by working people in terms of social security, including pensions, have been whittled down by the joint actions of the Indian government and big business. Even government employees and teachers have been forcibly transitioned to the defined contribution-based National Pension System (NPS), where both the employee and the government make monthly contributions toward a retirement corpus whose terminal value is market-linked, from the defined benefit Old Pension Scheme (OPS).

A small number of private sector employees are part of the Employees Provident Fund, with regular monthly contributions from both employee and employer. Most workers in the private sector do not have access to either OPS or NPS with an employer contribution.

Therefore, when the Finance Bill 2025 of the Union government announced expanded investment options under NPS and opened the door for “platform-based participation”, it looked like an ideological shift in the Indian government’s approach to social security. However, this shift actually implied that the Indian government no longer provided even a modicum of social security. Instead, it now facilitates access to financial instruments which tend, at best, to have ambiguous consequences for post-retirement social security.

Barely a week later, Zomato and HDFC Pension announced a partnership to enrol “delivery partners” (since gig employers reclassify employees as partners to sidestep labour laws, which are themselves atrophying) into NPS. Over 30,000 workers reportedly registered within 72 hours. The collaboration was hailed as a milestone in “financial inclusion”, proof that even the most precarious workers could now plan for retirement. Yet beneath this celebratory language lies a deeper question: what kind of inclusion is this, and who does it leave behind?

For the gig workforce, which is denied formal labour contracts, insurance, or pension benefits, this initiative is a de facto acknowledgment that gig work is possibly work. India’s platform workers operate in a grey zone, visible to buyers in the gig economy but invisible by design to labour law. By purportedly integrating them into an established financial framework like NPS, the government and the corporate sector seem to be, at the very least, recognising their existence, but on what terms?

Gig workers are being seen as retail financial investors, with the “agency” to rationally undertake risky decisions on the basis of cost-benefit analysis, and not as workers who are rightfully entitled to defined benefit pensions and related social security measures.

The digital portability of NPS accounts, it is touted, allows workers to contribute from anywhere, across platforms and cities. This, it is claimed, is a crucial feature for a highly mobile and unorganised workforce, especially in the light of some private employers siphoning away employees’ retirement funds.

Drawing on the insights of behavioural economics, it is pointed out that automatic or app-linked deductions can nudge savings among those who otherwise live hand to mouth. For many delivery workers, it is avowed, even a small corpus could purportedly mean the difference between subsistence and destitution in old age.

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If such defined contribution pension schemes are assumed to provide reliable social security, then the NPS expansion and Zomato–HDFC initiative may be seen as filling a gap. Actually, this initiative is an outcome of Hobson's choice for policy. Since the entire trajectory of policy since 1991 has been about denuding the bargaining power of workers through various forms of informalisation, including gigification as one type of precarity, the social instability that this has given rise to requires a policy response, even if it is for the sake of maintaining appearances. That policy response recognises that formalisation through de-gigification is not desirable for capital and is, therefore, politically infeasible.

Instead, the rising reality of gig work is formally accorded acceptance and some policy gesture is proffered. This is at best a gesture, for a number of reasons. Among other things, it reflects a shrinking vision of social security, one that celebrates token financial participation, where the retirement corpus of gig workers is subject to uncertainty while eroding the principle of public responsibility for social security.

The first concern is that of a lack of universality. The new scheme targets a narrow, digitally visible stratum: delivery and ride-hailing workers (“partners”) attached to formal platforms. But India’s informal sector extends well beyond the gig economy. Domestic workers, sanitation workers, construction labourers, waste-pickers and street vendors, the precariat and petty producers more generally, remain untouched, even in terms of the policy gesture. Without platforms to mediate their participation (which unwittingly makes gig workers more visible in the social media sphere), the precariat and the petty producers are effectively written out of this new “inclusive” policy gesture.

The second concern is its purported voluntary nature, but without any responsibility from the gig employer and the government. Neither the gig employer nor the government contributes to the retirement corpus, which is expected to fund workers’ pensions in the future; the burden lies solely on the gig worker.

This transforms social security from a right into a risky choice. For most gig workers currently earning ₹400 to ₹600 a day, the prospects of consistent contributions into their retirement corpus are at best unrealistic. This policy gesture, unsurprisingly, formally presupposes stability in the lives of gig workers whose labour processes have been designed by the duo of government and capital, centrally around instability.

The third concern is the uncertainty, the incalculable risk, associated with linking a retirement corpus to private financial securities. The 2025 Finance Bill’s concurrent reform, allowing 100% equity exposure in NPS, deepens the financialisation of welfare and increases the supply of funds that financial firms can subject to their “prudential” asset allocation activities.

Gig workers with negligible savings are now encouraged (actually beguiled) to invest their meagre savings in ways that may go very awry, and this after deducting the remuneration of fund managers. In effect, the downside of the financial asset markets is being transferred from the state and gig employers to the gig workers.

The rhetoric of empowerment and collaboration between capital and government masks a quiet process of de facto undermining of social security. This undermining is through privatisation, but this is sought to be obscured through rewriting the social contract between the government and the working people in actuarial language that is calibrated to the taste of capital. After all, if the share of profits in aggregate income is given, then pension payments of any sort amount to a redistribution within the working and retired components of the working people.

Universal social security can only be based on modest increases of direct taxation, and that too only of wealth and inheritance of wealth of billionaires. This can be supplemented by obligatory contributions by employers to a fund administered by the government with a guaranteed floor rate of return, as is the case under the OPS.

The Rajasthan’s Gig Workers Act (2023) already offers some pointers in this regard about gig employer contributions that can be built upon and extended throughout the country.

If the proceeds of this fund are used, directly and indirectly, for enterprise investment in sensibly chosen public projects, then the resulting positive multiplier effect on aggregate income, investment and profits will yield enough tax revenue to make a universal system of social security, including a defined benefit pension for all, eminently feasible. Trade union representation on the board administering such a fund and its committees must be made mandatory so that social security is reliably based on meaningful participation.

Universal social security presupposes a dialectic between growth and redistribution that is fertilised by modest taxation of the uppermost echelons of capital. Until that happens through the exercise of authentic political agency by the working people, initiatives like the Zomato-HDFC venture will remain trifling gestures in a wider architecture of neglect.

Shirin Akhter is Associate Professor at Zakir Husain Delhi College, University of Delhi. C Saratchand is Professor, Department of Economics, Satyawati College, University of Delhi. The views are personal.