A prospective extension

The latest CMIE data on unemployment rate show that unemployment in India continued to be high at 7.80 per cent in June 2022, with the urban employment rate being 7.30 per cent. At the same time, for May 2022, the urban employment rate at 8.21 per cent was higher than the overall unemployment rate of 7.12 per cent. Unemployment is definitely a matter of concern for policy makers and MGNREGA has proved to be a savior in rural areas but there is no corresponding safety net for the urban poor who also include the migrants from rural areas. The pandemic further brought into sharp focus the plight of the migrant labourers. Clearly, there needs to be a specific policy intervention for the urban poor to enable them to get gainfully employed.

There have been attempts at coming up with urban employment schemes in the past. In 1997, there was the SGSRY (Swarna Jayanti Shahri Rozgar Yojna) which consisted of both self-employment and wage employment features. In 2013, NULM (National urban livelihood mission) replaced SGSRY. However, none of these has been an employment guarantee scheme. Many states have come to realise the growing stress on the urban poor plagued by high unemployment rates and impact of high inflation as well as the phenomena of low wage rates and poor quality of informal work. Accordingly, states like Kerala, Odisha, Himachal Pradesh, Madhya Pradesh, Jharkhand and Rajasthan have formulated their urban employment guarantee schemes. This is partly the result of the fact that over the last two decades the Indian economy has been characterised by growth without employment. The level of inequalities in urban areas is much higher than rural areas and this is sufficient justification for a national level urban employment guarantee act.

While the need is clear, the scheme will have to be designed with a lot of thought. It cannot just be an extension of MGNREGA, as unemployment in rural areas is of seasonal nature and the kind of public works that are taken up in rural areas are very different from those which can be viable in urban areas. Besides, the Panchayat at the village level is able to implement the MGNREGA scheme but the current capacity of urban local bodies may not be adequate to handle this kind of scheme. It has been suggested by some experts that at the national level it is possible to fund the scheme from the budget where about 20 million urban workers can get employment for 100 days at Rs 300 per day. The Prime Minister advisory committee has also recommended such a scheme to reduce the level of inequality in the urban sector.

Nature of works to be taken up under urban employment programmes would need to be wider and should focus on improving and maintaining the basic urban infrastructure services. Azim Premji University has suggested a model in which apart from building local infrastructure like roads, lanes or drainage they have added monitoring of environmental quality, strengthening municipal capacity through apprenticeships and providing care for children and elderly. These kinds of works can be taken up by the educated youth for whom the Azim Premji University has suggested that the scheme should guarantee 150 days of employment at a monthly stipend of Rs 13,000. Green jobs like construction and maintenance of public green bodies such as parks, lakes, ponds and other water bodies can also be considered. Monitoring and surveying jobs along with providing administrative assistance to local bodies can be useful for the educated unemployed. Universal slum upgrading is an important activity in urban areas where labor can be provided under this scheme. Some experts have also talked about building infrastructure for the informal economy which could include activities like designing vending zones for street vendors or construction of multipurpose livelihood centers for home-based workers.

Jean Dreze' has suggested a DUET (decentralised urban employment and training) model where the state could provide financial resources and infrastructure for conducting formal training and skill development programmes to develop the capacity of workers and eventually that of the urban local body. Jean Dreze' was very much aware of the fact that there was corruption in MGNREGA, particularly in the form of the existence of ghost employees, and to overcome this, he suggested the issuing of job stamps to employers. In urban areas there was a lot of scope for keeping public spaces clean and this could enable jobs for women also. In fact, he advocated that in the urban employment scheme, one-third of the jobs should be reserved for women. He also put forward the concept of worker cooperatives where only those enrolled would be eligible for jobs.

Currently, there is a lot of debate on 'freebies' being promised by political parties to attract voters and several economists and leaders have criticised this populism as it leads to draining of the resources of the nation. However, MGNREGA cannot be viewed as a freebie as it is a very important safety net scheme in the interest of the poor. In a similar vein, the urban employment guarantee scheme would help in taking a lot of urban poor out of poverty. Besides, there are tangible economic benefits like boosting local demand, improving quality of urban infrastructure and services, skilling urban youth and increasing the capacity of the urban local body. The urban scheme has to take the urban local bodies into confidence while designing the structure, as they are the implementing agency and success or failure of the scheme would be dependent upon their performance. One could also think of having wages of workers in the urban guarantee scheme decided in a decentralized manner at the level of the urban local body. As regards the availability of resources, it has been estimated that to provide employment to 50 million people, an expenditure of only 1.7 to 2.7 per cent of GDP would be required per year, which can certainly be made available with proper financial planning and expenditure management.

The example of MGNREGA has demonstrated the usefulness of such an employment guarantee scheme. Though there are some allegations of misuse of funds, and often, land owners complain of this scheme leading to a hike in rural wages, the scheme has by and large delivered results. I have personally used MGNREGA in Bundelkhand area of Uttar Pradesh when this region suffered a drought for three consecutive years. The employment provided by the scheme proved to be of immense value to the rural workers. Then again, the pandemic clearly illustrated the value of this scheme as it provided a huge safety net for the migrant labor which returned in large numbers to the villages.

The recent pandemic has highlighted the reality of the urban poor. Eighty-five per cent of the workforce in the urban areas is employed in the unorganised sector where they get least social benefits. There is, thus, an urgent need to design and implement a comprehensive urban employment guarantee scheme at the urban level on the analogy of MGNREGA but with its own distinctive features.

The writer is an ex-Chief Secretary, Govt of Uttar Pradesh. Views expressed are personal