How The State Is Enabling Capitalists To Violate Labour Rights: A Marxist-Baxi Approach

With the liberalisation of the Indian economy in the 1990s, the government supplied various projects to private and public developers through bids to scale up development and industrialisation. The most common way to find labour quickly, for a short period of time and not for a permanent tenure, was through posting gigs.

However, the Indian economy started taking the shape of a gig economy in the early 2010s with the introduction of ride-hailing apps like Ola and Uber, and food-delivery platforms like Zomato. In the recent years, the trend of entering contractual agreements for a short period of time where work arrangements occupy an ambiguous space between self-employment and standard employment have been labelled 'the gig economy.'

While the gig economy has come to symbolize for some is an opportunity for flexibility, to earn additional income through short term opportunities and thus yields tangible benefits, others however, it has also meant a decline in the quality of employment in terms of pay and employment conditions. In India, according to NITI Aayog's study "estimates that in 2020- 21, 77 lakh (7.7 million) workers were engaged in the gig economy."[1]

Additionally, the International Labour Organisation reports that:
"India is the second-largest gig economy in the world, with around 56% of all gig workers in the Asia-Pacific region."[2] Despite the growing number of employees engaged in this field, the legal statutes provide a lack of protection against being exploited by those who control the means of production. Viewing the concept of a gig economy from a Marxist-Baxi lens reveals the extent to which any possible gig creates surplus value and shows law as a tool of repression rather than liberalisation.

Informal Labourers in India's Gig Economy
The intersectionality of caste and gender with capitalism must be recognised, especially while highlighting the presence of Informal labourers in the economy- house help, construction workers, cab drivers, etc. These labourers are usually from the lower caste, and belong to marginalised communities making it easier for the State to exploit them through statutes and ensure that they can regulate the system.

The employees are usually 'contracted' through middlemen, usually with no documentation or legal protection, making them vulnerable to being at the receiving end of minimal pay and unworkable conditions. This informality within the sector creates a striking vulnerability, more so for women who come from marginalised communities.

While men receive their wages, women are subject to sexism and casteism resulting not only in receiving a lesser wage, but also being subjected to verbal, mental, or physical abuse. The contractual nature of gig work further strips these workers of security, as they lack benefits typically associated with formal employment such as health insurance, paid leave, and retirement benefits.

Despite the growing number of gig employees in the country, the State has done very little to protect them through legal statutes. This can be seen in more recent statutes such as the Industrial Relations Code 2020, The Code on Social Security, 2020, and the Minimum Wages Act read with the Code on Wages 2019, where the common underlying issue is non-recognition to the gig employees.

Under the Industrial Relations Code, gig workers are classified as 'independent contractors', and not employees thus granting them no protection against any unfair dismissal or termination, nor guaranteed enrolment in welfare schemes. The Code on Social Security, albeit recent, doesn't grant employee status to gig worker. However, it does define 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."[3]

Despite providing recognition to this type of employment, the Code has provided very few entitlements to the gig workers. Lastly, the Minimum Wages Act doesn't apply to 'contractors' or 'partners', thus making gig employees ineligible under this statute. This essentially means that they have no financial security or any guaranteed minimum earning nor do they have any means to seek recourse for the same.

The intersection of caste and capitalism in India's gig economy reveals systemic exploitation of marginalized communities through legal erasure and state-sanctioned informality. This informality enables capitalists to evade accountability: wages remain unregulated, safety gear is absent, and displacement is routine, forcing workers into cycles of precarity. The resulting paradox represents a form of exploitation where workers are technically "independent" yet subject to rigid platform control.

This arrangement allows both corporations and the state to outsource responsibility, leaving workers at the mercy of rating systems and fluctuating demand. This mirrors Baxi's critique of Surplus repression, where the state legitimizes capitalist extraction by denying protections to marginalized groups. By refusing to classify gig workers as employees, laws prioritize capitalist flexibility over dignity, embedding caste and gender hierarchies into labour markets.[4] Further imposing Marx's theory on creation of surplus value, the structural inequality becomes extremely apparent.

Viewing the Gig Economy from a Marxist-Baxi Lens: Construction Workers
Construction, in a developing country, such as India is a skill of importance, and intensive industry, hires over 51 million people to help build roads, hospitals, and houses. Despite receiving both, private and public funding, the workers employed are usually underpaid. In construction, the workers are usually migrants and illiterate and in search for a job which pays enough to help them sustain themselves, and their families.

This systemic vulnerability directly facilitates the extraction of surplus value as theorized by Marx, where developers can maximize profits by minimizing labour costs through underpayment and harsh working conditions.

Surplus value, according to Marx, is created through precarious labour while workers remain alienated from the means of production. The labourer produces more in value than he receives in wages, making the difference the profit for the capitalist.

The very existence of the power dynamic between the employer and the employee poses a threat to the fair treatment of the employee. They are hired through contractors or middlemen, which gives them a temporary status of gig worker, not that of 'employee', hence providing no guarantee of being paid the minimum wage as per the statute.

While the workers are paid minimal wages and are forced to work in excruciating circumstances, the developers reap the fruit of the labour intense work. This is the surplus value which is covered through high rents and sale prices, and through under paying and under valuing the workers.

It's important to highlight Marx's theory on alienation which "describes the separation and estrangement of people from their work, their wider world, their human nature, and their selves."[5] Their labour turns into an abstract commodity that developers and middlemen control. They lack legal status and are excluded from decision-making, while having to work under harsh conditions, for meagre wages.

This brings us to Baxi's argument on law as a tool of repression in a capitalist society. As seen above, the Legislature has passed various Legal codes and statutes to refer to while dealing with cases relating to employment. However, we can also see a glaring hole in the protection of gig and contracted employees. The informal sector of India is extremely vulnerable, and has been getting poorer whereas "India's top 1% income share is among the very highest in the world."[6]

Baxi argues that surplus repression, essentially when law not only maintains basic order but goes beyond that to institutionalize and legitimize excessive exploitation of certain classes and communities. This happens through legal exclusions, loopholes, and the non-recognition of vulnerable workers. In various statutes, the Legislature has failed to give recognition to gig employees which has constantly prevented them from availing the benefits other employees have access to.

Additionally, as they don't qualify as employees, female gig workers are not protected under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 either. The law has not only helped the rich accumulate their wealth by exploiting their workers, it has also helped the employers evade responsibility and accountability, which goes against the idea of working for a welfare state.

Upendra Baxi's idea of "surplus repression" shows how the state intentionally creates gig workers' legal precarity in order to further capitalist goals, in addition to failing to protect them. The state gives the appearance of progress while permitting ongoing exploitation by acknowledging gig workers in new statutes without providing them with legal rights.

Platforms can dodge culpability, take advantage of cheap workers, and pass off exploitation as entrepreneurship thanks to this recognition-without-protection system. By legitimising this structure, the law normalizes the exclusion of working-class, Dalit, and Adivasi workers. By doing thus, it serves as a tool of systemic violence and solidifies gender, caste, and class hierarchies.

Conclusion
From the perspective of both Marxism and Baxi, we may observe how the legal system purposefully keeps labour in precarity while permitting capital accumulation through legalised surplus repression. By acknowledging gig workers' existence but denying them substantive rights, the law is strategically excluding them, normalising exploitation under the pretence of flexibility and entrepreneurship.

This exploitation creates a hierarchy of precarity that reflects India's current socioeconomic stratifications by disproportionately affecting people at the intersections of marginalisation, such as women, lower-caste communities, and those who are economically weak. In the context of India's high wealth inequality, where the advantages predominantly fall to the top 1%, the excess value extracted from these labourers becomes even more obscene.

India ought to put in place a sector-specific legal framework that recognises the special characteristics of platform work while guaranteeing fundamental labour rights. This might ensure income stability by requiring platforms to make proportionate social security contributions based on hours worked. Minimum wage requirements must be established by sectoral wage boards that represent gig workers.

In order to guarantee that marginalised workers receive equitable treatment, grievance redressal procedures, and access to equal economic opportunities, additional legal requirements should also address systematic caste and gender discrimination in gig employment. Without addressing these legal gaps, India's growing gig economy risks becoming a mechanism for institutionalising precarity under the guise of technological innovation and flexibility.

End Notes:
  • Niti Aayog, India's Booming Gig and Platform Economy, 2024
  • International Labour Organisation, Expansion of the Gig and Platform Economy of India, 2024
  • Code on Social Security, S2 (35)
  • Shampa Roy-Mukherjee and Michael Harrison, 'The Shifting Boundaries of Capitalism and the Conflict of Surplus Value Appropriation within the Gig Economy' [2020] Conflict and Shifting Boundaries in the Gig Economy: An Interdisciplinary Analysis 45.
  • K Santiagu, 'Issue 3 Www.jetir.org(ISSN-2349-5162)' (2024) 11 JETIR2403414 Journal of Emerging Technologies and Innovative Research
    https://www.jetir.org/papers/JETIR2403414.pdf
  • Nitin Kumar Bharti and others, 'INCOME and WEALTH INEQUALITY in INDIA, 1922-2023: THE RISE of the BILLIONAIRE RAJ' (World Inequality Lab 2024)
    https://wid.world/www-site/uploads/2024/03/WorldInequalityLab_WP2024_09_Income-and-Wealth-Inequality-in-India-1922-2023_Final.pdf

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