e-Commerce: The New Boom

India’s gig economy

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Regulation of Gig Economy

Since the pandemic, there is a growing concern about the pay-out and job-securities of the delivery persons and other gig workers of the e-commerce companies.

E-com boom in India

  • E-commerce in India is a nascent industry that is probably less than 13 years old.
  • In this short period, it has captured the collective imagination of the nation.
  • The covid-19 crisis has accelerated its adoption, and even die-hard fans of shopping at a physical store have switched to shopping online.

Various issues faced by the gig workers

  • Harsh working conditions
  • Quality of work and the temporary nature of engagement
  • Absence of a social security net
  • Long hours
  • Delayed pay-outs
  • Pressure to maximize speed of delivery (at the risk of road accidents)

E-coms under scanner

The bigger an industry gets, and the more successful it is perceived to be, the more responsible and thoughtful it needs to be in everything it does.

  • Fairness in employment: Some of the concerns are fair and call for introspection on the part of e-commerce companies.
  • Premature regulation: There is a rising demand for regulation of the gig economy created by them.

Significance of e-commerce sector

Anyone complaining about the quality of jobs being created by the e-commerce industry probably needs to spend some time understanding the history of job creation in India.

An attractive sector for India’s ‘jobs problem’

  • Ample workforce: India is a demographically youthful nation, and every year between 17 and 20 million people look for jobs.
  • Attractive sector: This includes around 5 million people who are abandoning highly exploitative and less remunerative farm jobs every year to find employment in other sectors, mostly in the nearest urban districts.
  • Limited success of service sector: The IT and business process outsourcing industry has less than 200,000 jobs a year during its 25 years of existence. This is just a minuscule 1% of the total number of jobs that need to be created.

Data justifying un-steady flow of income

  • According to CSO, only about 17% of India’s workers are regular wage earners and less than 23% of Indian households have a regular wage earner.
  • In other words, 77% of our households did not have a steady flow of income.
  • Self-employed (46%) and casual labour (33%) together account for nearly 80% of the workforce and claimed to earn less than ₹10,000 per month.
  • These are the realities that cannot be ignored.

E-commerce: A game-changer

  • The new-age platforms have done is nothing short of a miracle both in terms of creating jobs as well as paying a fair wage.
  • It can be well established that it has provided a better remedy for unemployment in India.

Why do e-marketplaces matter?

  • Failure of Skills: Neither skill nor knowledge is enough to ensure one generates income.
  • Technology dependency and free market: Efficient marketplace which are enabled by technology, matters.
  • Common platform: A startup such as the Urban Company is an example of a technology-powered marketplace for common services such as plumbing, carpentry, beauty, and house-cleaning, among others.
  • Single marketplace: They brought consumers and suppliers of services (based on skills) on a common platform and made the whole process of matching demand and supply pretty seamless.

Benefits offered

  • Decent pay: A consumer of a service is willing to pay more for better quality of service if there is a consistent and reliable process of evaluating the capability of service providers.
  • Self-employment: Most of these workers are always self-employed and even with these platforms, they operate in a gig mode which isn’t structurally different.
  • Better livelihood: Youth from rural India had been joining the Ola and Uber platforms in large numbers, many of whom were either unemployed or heavily under-employed.
  • No skill-compulsion: When skilling is voluntary and driven by a free market mechanism, the outcomes are magical.
  • Industrializing the services: These platforms did ‘industrialize’ the services—industrialization allowed effortless consumption and created structured mechanisms to scale services and service capabilities.
  • New consumption pattern: The technology enabled markets resulted in ‘new consumption’ which, in turn, led to creation of more goods and service providers.

Way forward

  • As far as the e-commerce industry is concerned, there are several obvious lessons that can contribute towards its growth, going ahead.
  • Also it is not fair to paint the entire industry as exploitative or be unduly critical of the gig model which is actually a very good model.
  • Many of the gig workers themselves would be reluctant to take up full time and fixed salaried jobs. Pushing for premature regulation could be lethal.
  • And finally, it is unrealistic to expect the e-commerce industry to create jobs that are probably as well paying like the IT industry.

Conclusion

  • Creating high-paying jobs was never easy and will never be easy.
  • Nor is it realistic that everyone, or even a majority of the 20 million, will be employed in high-paying jobs.

 

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Shyam kashyap
Shyam kashyap
2 months ago

good topic , i like it.