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We need an urban jobs guarantee scheme

| Updated on: Apr 28, 2019

Title: State of Working India 2019 <br> Published by: Azim Premji University

It would address high urban unemployment and lack of public goods, besides being superior to mere income support

India is facing a crisis of both quantity and quality of employment. Despite lack of recent official statistics, it seems clear, both from private data sources such as the Centre for Monitoring the Indian Economy (CMIE) as well as the leaked Periodic Labour Force Survey (PLFS) report of the National Sample Survey Organisation (NSSO), that the rate of open unemployment has steadily risen over the past few years.

As per the PLFS 2017-2018, open unemployment stands at a historic high of 6.1 per cent, and unemployment among educated youth has reached 20 per cent. Unemployment in urban areas at 7.8 per cent is higher than the unemployment rate in rural areas (5.3 per cent). In addition, Indian towns and cities continue to be plagued by the prevalence of low-wage, poor quality, informal work.

Need for urban renewal

PLFS data show that despite a rise in the prevalence of regular-salaried work, just over 50 per cent of the urban workforce remains either self-employed or in casual wage work. At the same time that our towns and cities are facing a crisis of jobs, there is also a crisis of the quality of life due to ecological stress and lack of adequate public services.

As malls, motorcycles, and mobiles proliferate, our streets are in disrepair, water-bodies are rapidly being degraded, green spaces are disappearing, the quality of air is deteriorating, and common spaces are shrinking.

Thus, we see a dramatic divergence between the quality of private and public goods. Centrally funded programmes like the Smart Cities Mission and Jawaharlal Nehru National Urban Renewal Mission (JNNURM) have disproportionately focussed on development of bigger towns and cities. Hence, it is important to re-focus our attention to improving the livelihoods and ecology of urban areas beyond India’s major cities.

However, Urban Local Bodies (ULBs), which are largely responsible for developing and administering our towns and cities, find themselves unable to carry out their core tasks adequately due to lack of financial as well as human resources.

Most ULBs in India are severely understaffed and are unable to hire more workers since they are financially restrained (ASICS 2017). A centrally funded programme that covers the wages of different kinds of workers will allow the ULBs to fulfil tasks they are mandated to perform but are failing to, because of a shortage of financial and human capacity.

Further, the present staff of most ULBs are not fully suitable for performing the tasks related to the renewal of urban commons and monitoring urban environment. This programme can generate a new set of ‘green jobs’ that can strengthen the capacity of ULBs as well as promote sustainable urban development.

Creating jobs, improving the capacity of urban local governance, and supplying quality public goods and services require serious public investment. But if made to an adequate extent, such investment has the potential to pay for itself many times over.

Not only does it directly improve welfare by raising incomes and creating assets, there are many positive spillover effects too, such as:

It increases demand by raising incomes directly, and indirectly in the informal sector, by improving the fallback position of workers.

It provides a better trained workforce to the private sector by allowing educated young workers to acquire skills and improve their employability.

The work undertaken will create assets that improve the town’s ecology and quality of public services, which have a direct impact on productivity and quality of life.

It creates a shared sense of public goods in which every resident has a stake.

While cities and towns do not yet have an equivalent of MGNREGA, India has a history of urban employment schemes. One of the most prominent Central programmes in this regard was the Swarna Jayanti Shahari Rozgar Yojana (SJSRY) launched in 1997 which provided employment to the unemployed and underemployed urban poor through self-employment and wage employment.

The Urban Wage Employment Programme component of SJSRY covered those living below the poverty line in ULBs with less than five lakh population. The SJSRY was replaced by the National Urban Livelihoods Mission (NULM) in 2013.

This programme, and its subsequent version, laid more emphasis on self-employment and entrepreneurship than on wage employment. However, unlike MGNREGA, India’s past urban employment schemes were not demand-driven and only a set of identified beneficiaries could avail their benefits. More recently, the idea of an urban job guarantee has been gaining prominence in political and policy debates in India.

Core element

According to news reports, an employment guarantee programme for urban areas has emerged as a core element of a possible Common Minimum Programme from the opposition parties for the 2019 General Election.

Further, the newly elected government in Madhya Pradesh recently announced a 100-day urban job guarantee scheme, the Yuva Swabhiman Yojana, which provides urban youth with varying educational qualifications with a wide set of jobs.

Since 2010, Kerala has also been running a programme called the Ayyankali Urban Employment Guarantee Scheme (AUEGS) which guarantees 100 days of wage-employment to an urban household for manual work. We are also witnessing a growing popularity of employment guarantee programmes across the world.

For example, in the US, employment guarantee is a core component of the ‘Green New Deal’, a set of policy proposals for addressing climate change and economic inequality, supported by several presidential candidates.It provides for a ‘Green Job Guarantee’ which enshrines ‘a legal right that obligates the federal government to provide a job for anyone who asks for one and to pay them a liveable wage’.

Further, an employment guarantee programme also strengthens the ‘Right to Life’ enshrined under Article 21 of the Constitution of India. As the Supreme Court of India has held in multiple cases, the ‘Right to Life’ is not restricted to mere existence but also includes the ‘right to livelihood’ and the ‘right to live with human dignity.’

In the last two decades several rights-based legislation have been introduced to further these constitutional ideals.

In particular, the MGNREGA is a legislative realisation of the ‘Right to Life’ through a ‘Right to Work’. A legally enforceable ‘Right to Work’ in urban areas appears to be a natural extension.

Better than UBI

Finally, we note that the idea of a minimum or basic guaranteed income has gained traction in policy circles across developing and developed countries. The specifics differ from proposal to proposal but the key aspect is an unconditional cash transfer to some identified group of beneficiaries.

While the modalities of an income guarantee are worth debating, we believe that an employment guarantee has three key advantages over the former:

Employment guarantee schemes are generally self-targeting and demand-driven. In a country like India with scarce income data, an employment guarantee programme circumvents the complicated process of identifying beneficiaries.

Employment guarantee , such as the one proposed here, enables people to contribute productively to the creation of useful public goods and services.

An employment guarantee has the potential to foster active citizenry. It enhances engagement in democratic decision-making through public meetings and public hearings. On the one hand, it would increase people’s political capacities in community building and on the other it strengthens local accountability.

Extracts from ‘State of Working India 2019’, with permission from Azim Premji University, Bengaluru

Published on April 28, 2019
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