Calls grow for national scheme for guaranteed work in urban India

Unemployment rates have been higher in urban than rural India for as many as 10 months since June last year. PHOTO: REUTERS

NEW DELHI - It has been four days since daily wage worker Phoolchand Ram last found work. Last Thursday (June 2), 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 workers congregate every morning waiting for potential employers.

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. Their existence has become more precarious than ever before because of the pandemic's economic rout and mounting inflation in recent months.

"Such a scheme is necessary," Mr Ram said. If not for the government-run shelter where he eats and sleeps for free, he would have to "go hungry and die or beg for survival".

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. In 2019-20, the urban LFPR stood at 49.3 per cent, compared with 55.5 in rural areas.

Unemployment rates have been higher in urban than rural India for as many as 10 months since June last year, according to data from 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 2021. The rates for rural India, on the other hand, were 6.62 per cent and 8.75 per cent respectively for those months.

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 Indian villages, especially during lean agricultural seasons.

While the central government 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, including some that have introduced them since the pandemic.

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

The 25th Parliamentary Standing Committee on Labour, in a report last August, said there was an "imperative need" for such a scheme in urban areas and noted that "unlike employment generation programmes in rural areas, the plight of urban poor has not got much attention of the government".

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.

India has run a national rural employment guarantee scheme since 2006, which has been widely acknowledged as a social security net for villagers. PHOTO: REUTERS

A survey of 3,000 slum households in Bangalore by the university last November found that job and income losses persisted well past the 2020 lockdown. As many as 10 per cent of the men and 15 per cent of the women surveyed were out of work even as late as October 2021.

"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 proposed the creation of a national urban employment guarantee programme as early as in 2019, with the provision of 100 days of guaranteed work at 500 rupees a day.

It had suggested a range of work that may be undertaken, including public works such as building and maintenance of roads as well as the creation and monitoring of urban commons like water bodies.

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.

Dr Basole said the CSE is studying the urban job guarantee scheme in Tamil Nadu and noted that analyses of how other state-level schemes fare will help shape discussions around a national scheme.

"I think in the next few months to a year, we will have a good understanding of how the state-level programmes are working, which can really inform a national programme," he added.

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 assessing the urban employment scheme in Kerala, which has been operational 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.

Labourers work at a cement brick factory in Bangalore on May 24, 2022. PHOTO: AFP

Lack of funding for such programmes by states has been another obstacle. The northern Indian 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.

This despite evidence that the scheme had benefited marginalised sections of the society, according to an analysis by Ms Krishna Priya Choragudi, a doctoral student at the Indian Institute of Technology Delhi. Women constitute the majority of applicants, and nearly half of the workers belong to marginalised caste and tribal communities.

This makes for key socio-economic progress in a country where female LFPR is significantly lower than for men. In 2017-18 the female LFPR was just 23.3 per cent, meaning over three out of four women over the age of 15 in India were neither working nor seeking work. This figure improved to 30 per cent in 2019-20.

"An urban employment guarantee is a promise for assured wage payment," Ms Choragudi told ST. "That's clearly attractive to all kinds of workers, and especially women workers, who are generally more prone to exploitative practices in the private market."

The fact that some workers did not receive any work, even a year after applying, or that they had to wait one to two months to receive their full wages, was not a deterrent. "A lot of women said that even if wages are delayed, there is a guarantee that they are going to get it," added Ms Choragudi.

According to the CSE, the estimated budget for a national urban employment scheme for cities with populations less than 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.

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