The Economic Advisory Committee to the Prime Minister of India (EAC-PM) had recently recommended the government for setting up an urban employment guarantee scheme in line with the existing rural poverty alleviation program, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Prior to this, in August last year, the Parliamentary Standing Committee on Labour had also suggested in its annual report that the Central Government should consider implementing an employment guarantee scheme for urban workers. The report also highlighted the government’s lack of attention towards the plight of the urban poor compared to that of the rural employment schemes.
With rising income inequality and a loss of jobs, the call for an urban jobs plan has been gathering momentum. Images of millions of migrants returning to their homes in villages from cities during COVID-19 had kept on circulating in the media during the lockdown phase. It was in this context that policy experts had strongly expressed the need for a national programme to address the issue of urban unemployment. But contrary to expectations, through the Union Budget presented this year, India’s Central Government was not able to come up with any policy measures to tackle unemployment issues in urban areas.
It is clear that the Rural Employment Guarantee Scheme was instrumental in addressing unemployment in rural India, especially during the COVID era. Inspired by this, various state governments have already initiated various types of urban employment measures to reduce the unemployment rate in their respective states. With each passing year, more and more state governments are realising the importance of implementing an urban version of MGNREGS. States that have currently implemented such a scheme include Kerala (Ayyankali Urban Employment Guarantee Scheme), Odisha (Urban Wage Employment Initiative), Himachal Pradesh (Chief Minister Shari Ajivika Guarantee Yojana), Madhya Pradesh (Chief Minister Yuva Swabhiman Yojana) and Jharkhand (Chief Minister Shramik Yojana). Even if these are exemplary examples, there is still a need for such a programme at the national level.
According to the National Statistical Office's (NSO) periodic employment survey, India's urban unemployment rate stood at 8.2 percent in January-March 2022. Out of this, the female unemployment rate is 10.1 percent and the male unemployment rate is 7.7 percent. The same report points out that the labour force participation rate (CWS) for those aged 15 and above in urban areas is 47.3 percent. It is in this context of increasing unemployment in India that the enactment of the Bhagat Singh Urban Employment Guarantee Bill becomes relevant.
The annual work plans of the urban local bodies and the annual report of all the activities carried out in the respective urban local bodies will be then examined and submitted to the respective district level programme coordinator for approval. A district level review and monitoring committee chaired by the Assistant Collector will also be constituted to take up the activities of approval of the annual report, for disbursement of necessary funds to the urban local bodies for the implementation and to ensure the full functioning of the scheme.
The District Level Committee will then submit the Annual Action Plans of the Urban Local Bodies and the Annual Report of all the activities undertaken in the respective district to the respective State Level Program Coordinator for review, design, and scrutiny. A State-level Review-Monitoring Committee chaired by the Additional Chief Secretary to Government will also be constituted to provide technical assistance, to ensure quality of project execution, to improve project implementation and take policy decisions.
Due to several factors, including the concentration of industries in limited locations, India is witnessing a huge imbalance in the rural-urban employment sector. Poor and vulnerable workers in the unorganised sector are also suffering due to low income, lack of job security and lack of social security measures from the government. Thus, it is crucial to expand social security schemes and public welfare programmes in urban and rural areas to provide relief and protection to these categories of workers. Short-term measures alone will not be sufficient to combat the adverse economic effects of COVID-19. The government needs to initiate a radical long-term restructuring of the growth strategy by creating jobs and should focus on industries to give more momentum to the growth process. That is why it is imperative that the "Bhagat Singh Urban Employment Guarantee Bill", which is going to be the most prominent of such measures, be legislated as a law.