After Rajasthan, now Karnataka planning surcharge on online transactions to support gig workers

In a move aimed at bolstering welfare benefits for gig workers, the Karnataka government is contemplating the implementation of a surcharge on online transactions conducted through platforms such as Amazon, Ola, and Zomato.

The gig economy has witnessed a significant surge in Karnataka, with approximately 300,000 gig workers estimated to be operating within the state. This burgeoning workforce has emerged as a considerable voter base, assuming heightened importance in the upcoming Lok Sabha polls slated for early next year.

As per a TOI report, if all goes as planned, Karnataka will become the second state, following in the footsteps of Rajasthan, to introduce a surcharge on online transactions earmarked for the welfare of gig workers. The Congress-led government in Rajasthan has applied a surcharge of up to 2 per cent on transactions, with the generated funds being channeled into a welfare fund overseen by a board encompassing representatives from the workers, industry, and government sectors.


Santosh Lad, the Labour Minister of Karnataka, told ToI that the government is actively considering the option of imposing an additional service tax for the purpose of supporting gig workers' welfare initiatives. State authorities have indicated that a welfare board for transport workers is under contemplation, potentially encompassing the collection of a cess to finance their welfare programs. It is being explored whether the gig workers could also be integrated into this same board.

In the fiscal year 2023-24 budget, Chief Minister Siddaramaiah had outlined plans for a comprehensive welfare scheme that included a Rs 4-lakh accident and life insurance package for workers. In the lead-up to the Karnataka assembly elections, a segment of gig workers had engaged with Rahul Gandhi. This engagement led to the Karnataka Congress manifesto outlining the establishment of a dedicated welfare board for gig workers, complete with an initial allocation of Rs 3,000 crore to kickstart the initiative.