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India’s cities run on the backs of gig workers, the delivery riders weaving through traffic with steaming food orders, the cab drivers working twelve-hour shifts, the cleaners and technicians moving from one home service booking to the next. Their work keeps urban life convenient, fast, and inexpensive. But behind the convenience is a workforce that has spent years operating in a space where rights, protections, and safeguards don’t match the scale of the labor they provide. 

As the sector balloons, the struggle to give gig workers something close to a social safety net has turned into one of the most complex policy fights in the country. The latest flashpoint is Telangana, which has attempted to build its own welfare architecture only to discover that its effort sits in the crosshairs of a much larger national framework still finding its way. 

A State Trying to Move Faster Than the National Law

When the Telangana government unveiled its Gig and Platform Workers (Registration, Social Security & Welfare) Act, 2025, it wasn’t just proposing another administrative reform. It was stepping into a policy vacuum that the central government has struggled to fill for years. 

The bill lays out a full ecosystem: a state-run welfare board, mandatory registration of workers and platforms, rules for data sharing, algorithmic transparency, grievance redressal systems, and, most importantly, a dedicated welfare fund. This fund is meant to cover everything from accident support to social security schemes. 

To pay for it, Telangana introduced its most debated provision a 1–2% cess on payouts that gig platforms make to workers. The idea is simple: every order, every ride, every booking contributes a tiny amount to a pool that eventually returns to the people doing the work. In principle, the model is clean. 

In practice, it steps directly into the path of the central government’s Social Security Code, which already proposes its own cess on gig and platform aggregators for a national fund. The central cess targets platform turnover, while Telangana targets. Per-worker payouts — but both draw money from the same companies for similar reasons. 

That overlap has forced Telangana to slow down and reassess, even as the need for protections grows more urgent by the day.

 The Bureaucratic Collision Course

The policy clash isn’t academic. If both cesses operate simultaneously, platforms could end up paying twice: once into a national pool they have no control over, and once into a state pool with its own rules. Some legal experts argue that this dual levy touches the limits of fiscal jurisdiction, pushing the bill into constitutional grey zones. 

Faced with this, the state now has only a few options:  

  • Strip out or revise its cess clause
  • Redesign the welfare fund’s financing model  
  • or send the bill for Presidential assent, acknowledging the conflict with central legislation

None of these paths is smooth, and all of them guarantee delay. For gig workers, delay has become a familiar refrain years of promises, committees, drafts, codes, and frameworks, all while riders are injured on the job, cars are damaged during trips, and incomes fluctuate wildly with no safety mechanism to absorb the shocks. 

Workers Want Protection: But Not Half-Measures

While many gig workers have welcomed Telangana’s initiative, they’re also the first to point out. What’s missing? The bill stops short of setting a minimum fare, whether per kilometre or per trip. This means that even if a welfare fund exists, the day-to-day vulnerability around earnings stays untouched. 

The draft also omits guaranteed health, life, or accident insurance protections that are standard in most formal jobs but remain a luxury for those working informally. Several unions have called this the bill’s Achilles’ heel. They argue that a welfare fund without core protections will still leave families exposed to medical emergencies and sudden income losses. 

There are also concerns about transparency. Platforms often give workers only partial visibility into how fares are calculated. Riders frequently start a trip with no clear idea of how much they’ll take home after the platform’s commission, dynamic pricing rules, or penalties. The bill attempts to chip away at this by requiring some algorithmic disclosure, but workers say it doesn’t go far enough to change their real experience on the ground. 

Despite these criticisms, unions agree on one thing: Telangana’s effort is miles ahead of the status quo. The fear now is that the bill will be held hostage by the cess dispute, that the biggest breakthrough in gig worker welfare could stall over an administrative technicality. 

A Federal Puzzle With Human Stakes

 What’s playing out in Telangana is not just a state-versus-centre power struggle. It’s a reflection of how India’s federal structure handles new forms of work. Labour is a subject where both the centre and the states can legislate, but when both try to build the same type of welfare mechanism, overlap and conflict are almost inevitable. 

Other states are watching closely. Rajasthan had earlier passed a welfare law for gig workers, and Karnataka explored similar models, but neither has faced the kind of direct clash. Telangana is dealing with it now. If the central cess becomes the only workable path, states may lose the freedom to craft welfare programs tailored to their own economies. 

Platforms, meanwhile, are concerned about the cost structure. They argue that multiple levies, even small ones, could force price changes that eventually fall on customers or workers themselves. Workers argue that platforms often use this reasoning to resist regulation of any kind. 

Caught in the middle of these debates are the people who do the work: the rider who cracked his rib avoiding a reckless motorist, the driver who supports a family on unpredictable daily earnings, and the cleaner who spends her weekends trying to make up for cancelled weekday bookings. They don’t analyse cess structures or constitutional boundaries. They simply want to know whether someone will help them if something goes wrong. 

Right now, there is no clear answer. 

The Road Ahead: Promise Without Certainty

If Telangana manages to resolve the cess conflict, the bill could become a model for other states. It could mark the start of a more grounded, practical approach to gig worker welfare, one that acknowledges that gig work is not a temporary trend but a permanent part of India’s economy. 

But if the conflict lingers, or if the bill is rewritten to dilute its funding strength, workers may end up with another partial reform that promises protections but delivers only paperwork. 

The real test is not whether a law is passed. It’s whether the protections reach the rider who meets an accident at midnight or the driver whose app suddenly blocks his account without explanation. Until that happens, the gap between policy ambition and worker reality will remain wide, and India’s gig workforce will continue carrying the weight of an economy that relies on their labor but still hasn’t figured out how to protect them.

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