India can reap its demographic dividend by investing in the care and gig economies

Distinguished academics, researchers and colleagues,

As the ILO’s association goes back with the Indian Society of Labour Economics conference, it is my pleasure to be here with you today.

This year’s conference is particularly timely, given its themes of gig and platform work, care economy, and labour market, which have been integral to the ILO’s work in India in the last few years. While for most countries, the last few years have been characterized by labour market contractions due to the pandemic and some economies even entering into a recession, the Indian economy has managed to surpass expectations in its recovery and is likely to remain the fastest-growing among G20 economies in 2024. However, rapid economic growth has not translated into productive employment and decent work opportunities for the vast majority of India’s labour force. The country is still characterized by high informality, with nearly 90 per cent of the labour force being informal.

The share of employment in agriculture has increased from 4 per cent in 2018-19 to 45 per cent in 2022-23, while only 20 per cent of employed are engaged in wage employment, and approximately 9 per cent are in formal wage employment. These are a lot of numbers, but what do they mean?

It means that employment is predominantly of poor-quality, is self-employment and casual employment, sometimes with multiple intersections. As a consequence, wages are also stagnant and or declining, making work even more precarious for a large swathe of workers.

The ILO’s 350th Governing Body session, during a Meeting of Experts on wage policies, endorsed decent wages being central to economic and social development and to advance social justice and highlighted their essential role in reducing poverty and inequality and ensuring a decent and dignified life. India has the demographic dividend on its side, as the share of the working-age population increased from 59 per cent in 2011 to 63 per cent in 2021, and nearly 7-8 million young workers are added to the labour force each year.

The ILO’s latest research supports that employed youths are more likely to be engaged in more vulnerable occupations or in the informal sector. Higher education has also been directly proportional to higher unemployment. This requires the pressing need to rethink growth strategies at the macro-level to make growth more employment-intensive and engage India’s large young workforce in productive employment to realise the demographic dividend.

The emergence of digital labour and the platform economy has been one of the most important developments in the world of work in the 21st century. This has opened up new markets for businesses, created new employment and income opportunities, and afforded flexibility and low barriers to entry for workers, while consumers have benefitted from cheaper and more convenient goods and services, particularly in underserved areas.

The high internet penetration in India and the digital literacy of the youth, which has earned them the moniker of the “internet generation,” make the gig and platform economy a vital employment-generating ecosystem for the country. NITI Aayog estimates that the number of gig and platform workers is likely to increase from 7 million in 2020 to more than 20 million in 2030. Growth of this sector raises several new challenges related to the rights and status of workers on these platforms – such as precarity of earnings, lack of social security benefits, and poor working conditions – linked to the informal nature of work on these platforms. When we consider bringing decent work into the gig economy, two aspects need to be considered.

The existing social security frameworks need to be reoriented to include new forms of employment, such as gig and platform workers. The digital public infrastructure that has accelerated the growth of the platform economy can be leveraged to provide innovative approaches to extend social protection to gig workers. The contractual relationship between the platform owner and worker contributes to job insecurity, wage irregularity and uncertain employment status, placing undue stress on workers.

Platform growth needs to be managed with worker well-being for the gig economy to become a sustainable and viable employment generator. The issue is of critical importance for the ILO, as the 113th and 114th sessions of the International Labour Conference in 2025 and 2026 will include a standard-setting discussion on promoting decent work in the gig and platform economy.

Closer home in South Asia, we are about to launch a new report that has synthesised the labour market dynamics for gig and platform work since the pandemic in India, Bangladesh, and Sri Lanka and suggests opportunities for Employers and Business Members’ Organizations to contribute to a fair working environment that caters to the diverse needs of the platform economy.

There is a growing demand for care services globally, due to the care crisis with ageing populations and unmet care needs, which was further exacerbated by the pandemic. A majority of these services, especially in countries like India, are carried out by domestic workers. ILO estimates that nearly three-quarters of the 75.6 million care workers globally are women, making the intersection of domestic work and care work critical to the achievement of gender equality. Earlier this month, to mark International Women’s Day, the ILO released a new policy brief urging governments, employers' organizations, and workers' organizations to ensure access to labour rights and social protection for domestic workers.

Globally, there are labour shortages, and countries across the board are looking to improve their low female labour force participation rates, which are contingent on existing quality care services. The importance of investment in the care sector cannot be stressed enough as women spend 4.1 times more time on unpaid care work than men, in Asia and the Pacific. Despite witnessing an increase in recent years, the female labour force participation is much lower than their male counterparts.

This is a confluence of both supply and demand side factors, adverse social norms, the burden of domestic and childcare responsibilities, lack of demand for women’s work. In this regard, the importance of building a comprehensive care economy cannot be overemphasised. Not only will this reduce the burden of unpaid childcare, elderly care and domestic work, but also create employment opportunities for women.

The care economy is growing as the demand for childcare and care for the elderly is increasing in all regions. However, care work across the world remains characterised by a lack of benefits and protections, and low wages or non-compensation altogether. To this effect, the ILO has also been supporting NITI Aayog to formulate policy recommendations to help strengthen the care economy through increased availability of and access to quality care infrastructure, reducing the burden of women’s care responsibilities through flexible work arrangements and better work-life balance policies at the workplace, availability of well-trained and qualified care workforce, and better income-earning opportunities and working conditions for care workers.

As I mentioned at the beginning, the ISLE conference this year touches upon areas of critical concern for the ILO and the global economy at large. I look forward to the sessions lined up that will give better insight on navigating the challenges confronting us and help capitalize on the opportunities that build a more just work of work for all.