Calls grow for national scheme for guaranteed work in urban India

It has been four days since daily wage worker Phoolchand Ram last found work. Last Thursday, the 61-year-old hoped the day would bring him some work when he set out again at 8am for a spot in Old Delhi, where a few hundred people congregate every morning waiting for potential employment.

But that lucky break never came.

"There are more than 20 people for every one job that is offered," said Mr Ram, who earns about 350 rupees (S$6.20) for a day's work at construction sites and for performing other odd jobs.

"Whether someone gets work or not depends entirely on luck… There's never been a month where I have had more than 10 days of work," he added.

It is the welfare of the urban poor such as Mr Ram that has led to growing calls for a national urban employment guarantee scheme in India. The idea for such a programme was even raised in a report released last month and drafted for the Economic Advisory Council to the Prime Minister.

Referring to lower labour force participation rates (LFPR) in urban areas than in rural India, the State of Inequality in India report called for a scheme offering guaranteed employment to surplus labour in towns and cities. Unemployment rates have been higher in urban than rural India for as many as 10 months since June last year, according to the Centre for Monitoring Indian Economy.

Last month, it was 8.21 per cent for urban India, falling from a high of 10.08 per cent in June last year. India has run a national rural employment guarantee scheme since 2006 which, despite niggling problems in its implementation including corruption, has been widely acknowledged as a social security net for locals in villages, especially during lean agricultural seasons.

While New Delhi has not announced any plans for a countrywide urban employment guarantee programme, the idea has found acceptance in certain states that have launched such schemes.

The north-western state of Rajasthan launched one last month, becoming the sixth state to have such a programme. It provides 100 days of employment to needy families in urban areas.

Dr Amit Basole, who heads the Centre for Sustainable Employment (CSE) at Azim Premji University in Bangalore, told The Straits Times that such a scheme at the national level would not just help people cope with the pandemic's shock but also shield them from further crises.

"A national employment guarantee scheme is necessary in order to be better prepared so that we don't see the kind of migrant crisis that we saw in 2020," Dr Basole said.

The CSE had proposed the creation of a national urban job guarantee programme in 2019, with the provision of 100 days of guaranteed work at 500 rupees a day.

But there are several challenges involved in launching such a scheme, including concerns over any further urban migration that it may provoke and identification of eligible beneficiaries in large cities, which tend to have floating populations of migrant workers.

The need for jobs that meet the aspirations of the large number of educated unemployed people in urban areas is another sticking point. A report on the urban employment scheme in Kerala, in operation for more than 11 years, found it had failed to meet the needs of the educated unemployed with the programme "largely viewed as a last resort welfare programme for the poorest of the poor".

Dr Jos Chathukulam, director of the Centre for Rural Management in Kottayam and one of the authors of the report published in Economic and Political Weekly in April last year, told ST that urban local bodies can employ the educated unemployed for relatively skilled jobs such as town planning surveys or identifying beneficiaries of government welfare schemes.

"But to be able to employ them, they (urban local bodies) need high amount of flexibility and high amount of independence," he added. Such bodies in India are, however, mostly capacity constrained and have restricted autonomy that limits their ability to successfully carry out such a scheme.

Lack of funding is another obstacle. The northern state of Himachal Pradesh launched its version of an urban employment guarantee scheme in May 2020, but slashed its annual outlay to 50 million rupees for 2022-23, down from 1 billion in previous years.

According to the CSE, the estimated budget for a national urban employment scheme for cities with populations under one million would range from 1.7 per cent to 2.7 per cent of gross domestic product (GDP).

Dr Basole, while acknowledging budgetary constraints, said the government's fiscal deficit and debt, which has risen since the pandemic, should not entirely pre-empt the launch of such a programme. He suggested a "phase-in" approach with pilots in smaller towns in poorer districts that, if successful, can be scaled up over a few years. "Spending 1-2 per cent of the GDP, I don't think it's an impossible task for something as important as this," he said.