Karnataka Govt Hits Big Techs Amazon, Flipkart, Ola & Uber with 5% Cess to Empower Gig Workers

The Karnataka government has decided to collect a 5% cess from companies like Amazon, Flipkart, Ola, and Uber to support gig workers. This means that these companies will have to pay 5% extra on the total amount they give to gig workers, and this money will go into a special fund for their welfare. The state government will also contribute additional funds to support these workers.

Why Is This Happening?

Gig workers like delivery partners, cab drivers, and others working for online platforms don't always have job security, health benefits, or accident insurance. To fix this, Karnataka wants to set up a gig workers' welfare board that will look after their rights and provide them with financial and social security.

What Does the Karnataka Government Say?

Chief Minister Siddaramaiah confirmed this decision after meeting Rahul Gandhi in Delhi, as per reports. The meeting happened because there were some disagreements within the Karnataka government about the bill. However, after discussions, they decided to move forward with the plan.

In his Twitter post, CM Siddaramaiah stated, "In our meeting with Shri Rahul RahulGandhi
Today, we reaffirmed our commitment to the promises made during the Bharat Jodo Yatra and the elections - especially to lakhs of gig workers who form the backbone of our digital economy.

We have decided to establish a Gig Workers' Welfare Board in Karnataka to ensure their rights, dignity, and social security. A 5% cess will be collected from companies like Amazon, Flipkart, Ola, Uber, and others that employ gig workers. The remaining funds required to implement welfare schemes will be provided by the state government. We will soon bring comprehensive legislation before the cabinet to ensure fair wages, safety, and long-term social protections for gig workers.

This is not just policy - it is a moral duty. Karnataka is proud to lead the way in building a more inclusive and equitable future for all workers."

Labour Minister Santosh Lad explained that the Gig Workers' Bill proposes a 1-2% cess on every transaction involving gig workers. However, the government has now decided on a 5% cess on payouts to gig workers. This is based on the Social Security Code, 2020, which allows such a tax to support workers' life insurance, health benefits, and accident coverage as per reports.

Opposition from Tech Companies

Not everyone is happy with this decision. Industry bodies like NASSCOM and IAMAI have raised concerns, saying that this cess could hurt businesses and make it harder for startups to grow in Karnataka. Some government officials also feared that it might impact investment in the state.

What Gig Workers Are Saying?

Many gig workers support this decision, as they believe it will give them better job security and fair wages. The Karnataka government will now finalise the details of the bill and present it to the state cabinet for approval. If everything goes as planned, this could become a major milestone for gig workers across India, ensuring better financial and social security for them in the long run.