CHENNAI: India’s southern state of Tamil Nadu will offer a subsidy of 20,000 rupees ($230) to select gig workers to buy e-scooters, a minister said on Friday, as more young people sign up with online platforms to deliver food and groceries.

Gig workers, or those outside traditional employer-employee relationships, are set to play a key role in the world’s fifth-biggest economy, spurred partly by high unemployment after COVID-19 pandemic curbs fuelled growth in the sector.

Tamil Nadu is also introducing an insurance scheme for nearly 150,000 gig workers to compensate for accidental deaths and disability, its finance minister, Thangam Thenarasu, said while unveiling the budget.

“A new scheme will be launched …. to provide a subsidy of 20,000 rupees each to 2,000 internet-based service workers to buy a new e-scooter,“ the minister said, adding that workers registered with a state welfare body would be eligible.

Further details of the scheme will be revealed later, Labour Secretary Veera Raghava Rao told Reuters.

The prices of electric scooter maker Ola’s products start at 79,999 rupees, while those of rival Ather sell from 99,999 rupees.

The state will also set up lounges for the use of such workers in large cities, such as Chennai, its capital – where summer temperatures often exceed 40 degrees Celsius (104 degrees F) – and Coimbatore, a textile hub.

The head of the Tamil Nadu Food and Allied Products Delivery Workers Union, K.C. Gopikumar, welcomed the subsidy and welfare efforts but urged the government to extend them to more workers as well as give them better conditions, such as paid leave.

Swiggy and Zomato, two of India’s biggest delivery providers, did not immediately respond to requests for comment.