Section 2(8) of the Electricity Act, 2003 defines a captive generating plant as “a power plant set up by any person to generate electricity primarily for his own use and includes a power plant set up by any co-operative society or association of persons for generating electricity for use of members of such co-operative society or association”. The captive power generators can use the electricity for themselves and can also contribute to the power grid. Traditionally, captive power plants are used by energy-intensive industries/businesses such as steel plants and aluminum smelters to meet their own energy requirements and provide an uninterrupted power supply. However, since the advancements in renewable energy production technology sources such as wind and solar energy and the availability of windmills and mobile/rooftop solar panels, even individuals or cooperative societies fall under the ambit of captive power generators.
The captive power policy in India came into existence when the power generation capacity lagged the peak demand, and the existing infrastructure was insufficient to fill this gap. By allowing industries to generate power for themselves, the policy not only allowed for additional investments and an increase in the power generation capacity but also took the load away from the limited government resources. Further, it allowed for private investments in research and development for new and improved technology and innovation in the sector. Today, India is a power-surplus country and a net exporter of electricity. It exports to neighbouring Bangladesh, Nepal and Bhutan.
Similarly, the Department of Telecom (DoT) grants spectrum usage licenses to Indian Railways and Defense establishments for their captive usage. The Railway Radiocommunication Systems between Train and Trackside (RSTT) uses spectrum to establish their own communication and signaling systems for enhanced traffic control, passenger safety and improved security of railway operations. Similarly, defense establishments need an independent, secure, and robust network for communication, surveillance, radar systems, and navigation. These networks are away from any commercial use.
Gig Economy
As per the Cambridge dictionary, Gig refers to a single performance done by a musician, or a group of musicians, or a comedian. In contemporary business, its used for on-demand work with little or no formal contracts. Technological advancements have spurred gig work through the development of platforms which connect seekers and providers of varied services. The Code on Social Security, Ministry of Law and Justice, Government of India, 2020, defines;
- A gig worker as a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship.
- Platform work as an employment form in which organizations or individuals use an online platform to access other organizations or individuals to solve specific problems or to provide specific services in exchange for payment.
According to the 2022 report by the National Institute for Transforming India (NITI) Aayog, titled “India’s Booming Gig & Platform Economy: Perspectives and Recommendations on the Future of Work”, India has over 7.7 million gig workers, with around 3.3 million associated with technology platforms for work. In India, some of the largest gig work platforms are Uber and Ola for ride-hailing services, Zomato and Swiggy for food and grocery delivery, Amazon and Flipkart for e-commerce, and Urban company for various services ranging from electricians to masseurs. Gig work and gig workers are expected to grow rapidly in the coming decade, and according to estimates, gig workers are likely to triple in size by 2030, and those associated with technology platforms will quadruple.
As per the 2021 report “Unlocking the Potential of the Gig Economy in India” by BCG and Michael & Susan Dell Foundation, India has one of the largest workforces in the world, with approximately 500 million people. Of this, nearly 210 million are engaged in farm and allied activities, whereas the remaining are in non-farm sectors such as construction and real estate, manufacturing and utilities, retail, transportation and logistics, among others. Almost 90 per cent of the total workforce is in the informal sector, and they lack access to social security benefits. As of 2020-21, gig workers comprised 2.62 per cent of the total non-farm workforce, which is projected to increase to 6.68 per cent by the end of the decade. Since gig work is not a traditional employer-employee relationship, gig workers are also out of the purview of any social security benefits from the associated platforms.
The lack of social security for gig workers has received attention from policymakers at both the Union and State levels. However, much remains on paper. The penetration and density of insurance in India lags behind its BRICS peers and is much below the global average. Realising the scale and impact of the gig economy on the workforce, can the Insurance and Regulatory Development Authority of India (IRDAI) borrow from its ministerial peers like the Ministry of Power and the Ministry of Telecom and propose a policy of “captive insurance licenses” for technology platforms offering gig work? These platforms can each work as independent insurers for their partners only to begin with. The insurance services can work on the principles of mutual and cooperative insurers, where even the gig workers as stakeholders will be engaged in policy design and fund management. The existing platform technology can accelerate the uptake of such services and substantially reduce the onboarding and operational costs. The technology can also facilitate quick decision-making with transparency and thus reduce moral hazard and fraud. The application/platform can further be used to emphasize the worker’s well-being rather than only focusing on the cure.
The NITI Aayog report quoted above proposes a RAISE framework;
- Recognise the varied nature of platform work to equitable schemes
- Allow augmentation of social security through innovative financing
- Incorporate, while designing schemes, the specific interests of platforms, factoring the impact on job creation, platform businesses and workers
- Support workers to subscribe to government schemes and welfare programmes through widespread awareness campaigns
- Ensure benefits are readily accessible to platform workers
With the insurance protection gap among the highest in Asia, Indians are vulnerable to health and economic shocks, and the IRDAI can borrow from the RAISE framework by allowing social security benefits through captive insurance licenses to platform companies and the gig workers associated with them.
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