A staggering 77.6% of gig delivery workers in India earn less than Rs 2,50,000 annually, according to a recent survey by Borzo (formerly WeFast), a global same-day delivery company. The survey, which covered over 2,000 workers employed by companies like Zomato, Swiggy, Uber, and Amazon across 40 cities, sheds light on the financial challenges faced by these workers and their levels of tax awareness.
“As we focus on the gig economy, it’s important to equip gig delivery workers with the knowledge and tools for effective financial planning. The debate surrounding minimum income for gig delivery workers points to the need for targeted education and support,” says Eugene Panfilov, managing director of Borzo India
The survey report titled ‘Understanding the Financial literacy of gig delivery partners’ took inputs from 2,000 gig workers from Tier I and II cities like Mumbai, Delhi, Bengaluru, Hyderabad, Jaipur, Ahmedabad, Kolkata, Chennai, Pune, Gurgaon, Noida, Lucknow, Indore, Chandigarh, Surat, Udaipur, Amritsar, Vadodara, Thane, Kanpur, Bhopal, Haridwar, Guwahati, Ghaziabad, Faridabad, Kanchipuram, Ludhiana and Tier 3 towns such as Pimpri Chinchwad, Raebareli, Kalyan, Chapra, Palghar, Kashipur, Nashik, Jalandhar, Baghpat, Saharanpur, Mohali, Nadiad, Rohtak.
Gig workers and ITR
The survey revealed a lack of tax awareness among these workers. Nearly 61% of those surveyed admitted they were not aware of income tax brackets, while only 39% claimed to know where they stand. Despite this, only 33.5% of gig workers have filed income tax returns, leaving a large 66.5% who have never taken this step.
Of those who do file income tax returns, a significant majority — 66% — file Zero (Nil) Returns, while 34% submit Self-Assessment Returns. The survey also noted that 47% of those who file ITRs pay their tax in regular instalments, whereas 53% prefer a one-time payment.
Are gig workers willing to pay taxes?
Interestingly, 42% of non-ITR-filing respondents expressed a willingness to pay taxes if they fall into a tax bracket, but a larger 58% are unwilling to pay taxes even if they are supposed to.
What about investments?
The survey also explored the investment habits of gig delivery workers and found that the majority are not investing in financial instruments like mutual funds or stocks. Specifically:
Mutual funds: 77% do not invest in mutual funds, and of the 23% who do, most (71%) invest between Rs 500 and Rs 1,000 monthly.
Stocks: 74% of gig workers do not participate in the stock market. Among the 26% who do, nearly half prefer blue-chip stocks, with others opting for IPOs or penny stocks.
Long-term savings
When it comes to long-term savings, only 24% of gig workers invest in Public Provident Fund (PPF) accounts, suggesting that long-term financial planning is not a priority for most. Those who do invest in PPF generally contribute between Rs 1,000 and Rs 3,000 per month.
Life insurance?
The survey also revealed that 65% of gig workers do not have life insurance, pointing to lack of financial planning for unforeseen circumstances.
Niti Aayog estimates that India has 7 million gig workers, and this number is expected to grow to 25 million by 2030, with an annual growth rate of nearly 12%.
How does this compare to national tax data?
The broader picture of tax compliance in India, as presented in Parliament for the financial year 2022-23, shows that out of 74 million individuals who filed income tax returns, around 70% reported zero tax incidence. This shows that only a small fraction, about 1.6% of the population, actually paid income tax during this period. While there has been a rise in income tax compliance from 2019-20 to 2022-23, the surge in individuals with zero tax incidence has outpaced this growth.
First Published: Aug 23 2024 | 7:30 PM IST
