Unemployment in the last two years in India, apart from the rest of the world, reached its peak during the turmoil created by coronavirus. For Bharat, which is already facing severe unemployment, the Covid-19 pandemic further aggravated the situation.

The statistics of National Sample Survey Organisation confirmed that it was the highest rate of unemployment in the last four decades. As per CMIE (Centre for Monitoring Indian Economy) Survey, monthly unemployment rate was 23.7 per cent in April 2020, turned to 7.9 per cent by December 2021. Urban unemployment was 9.3 per cent and in rural 7.28 per cent. There were about 5.3 crore unemployed youth in the country by end of December 2021.

The MGNREGS (Mahatma Gandhi Rural Employment Guarantee Scheme) came to the rescue of the rural unemployed to some extent during the pandemic, but the urban unemployed didn’t get any such help. A Parliamentary Standing Committee on Labour Affairs had recommended to the Union Government, a MGNREGS-like job scheme for urban poor and unemployed youth to recover from massive job and income loss owing to the corona outbreak.

No forward step

Earlier, employment schemes were undertaken for urban youth, but not implemented to the fullest extent. In the Ninth Five Year Plan, urban wage employment programme, as a part of Swarna Jayanti Rozgar Yojana, was undertaken at a lower level in 1991 for urban youth. It was meant for creation of employment on daily wages for poverty-stricken urban youth living in towns and small cities of less than five lakh population.

SJRY didn’t give expected results, and in its place another scheme, National Urban Livelihoods Mission, was launched in 2013 to reduce poverty and vulnerability of urban poor, by enabling them to access gainful employment and skilled wage employment opportunities.

It aimed at addressing especially issues of urban street vendors by facilitating them to access institutional credit, new market opportunities, social security, skills improvement and access to suitable spaces. But this programme has not found significant enrolment of beneficiaries (especially in States like Jammu and Kashmir) owing to poor publicity and lack of coordination between departments implementing it. Though some of the States have taken the initiative to provide daily wage employment at least for a few days in the year under this programme, the Central government has not taken steps in that direction.

Some economists argued that funding urban employment guarantee schemes would become an issue. However, this is not true. For example, it costs ₹60,000 crore to the exchequer if two crore urban labour is offered 100 days employment @ ₹300 per day wages. It could be reduced to one crore labour if the government feels it is too expensive. So the cost comes to ₹30,000 crore. It is not an unbearable expenditure. There are a lot of benefits to be had. If extended to one crore urban unemployed youth, the benefit will extend to four crore people (assuming a family size of four). Due to money circulation, demand for goods and services increases in urban areas.

Kerala model

Under the Ayyankali Urban Employment Guarantee Scheme launched in 2010, Kerala is providing 100 days employment to the unemployed youth. From the opportunities available under the scheme which do not require skills, 50 per cent of these will be allotted to women. The scheme with jobs like tree plantation, gardening is contributing to environment protection, too.

Under this scheme, works like pruning weeds, removing gross beside roads, planting fruit trees in vacant places and urban road sides, cleaning drainage channels, dispose of plastic waste, etc., are being undertaken. This checks flooding and overflowing during the monsoon season. Inspired by Kerala, Madhya Pradesh, Himachal Pradesh, Jharkhand and Odisha also undertook urban employment guarantee schemes.

The private sector can also be made a partner in the long run. Urban poor youth can be taught to apply for daily basis jobs that the corporates offer. The employment cardholders in urban areas should also be made eligible for work available in villages. This gives a lot of flexibility to migrant workers. Municipalities can be given freedom and power to decide what to do under urban employment guarantee programmes.

Providing 100 days employment a year under this scheme seems to be good, but the question arises as to what about the remaining 265 days. All possible ways and means are to be explored.

The corporate sector needs to be integrated. The Prime Minister’s Street Vendor Atmanirbhar Nidhi joined hands with Swiggy, Zomato to deliver eateries and breakfast directly at the doorstep of customers. As a result, many urban youth are finding employment. The Central/State governments and urban self-governing bodies have to explore innovative ways like this.

The writer is Professor of Finance, Amity Business School, Amity University, Gurugram