Nreg for cities a national urban job guarantee is needed efficiently designed it won’t stress the budget

Nreg for cities a national urban job guarantee is needed efficiently designed it won’t stress the budget

Shortly after a report from the Prime Minister’s Economic Advisory Council (PMEAC) that recommended the rollout of an urban employment guarantee programme, Rajasthan launched its own version of the scheme. India is not new to state-level urban jobs programmes as Kerala launched one over a decade ago. The advent of the pandemic built up cross-party support for it and a few other states followed suit. At the Union level, this idea gained momentum last year when the parliamentary standing committee on labour recommended it. Besides Kerala, Tamil Nadu, Odisha, Himachal Pradesh have a shorter experience in the area.

There’s a case for GoI to join in for two key reasons. In India, CMIE jobs data shows that monthly unemployment has fluctuated between 6.56% and 11.84% over a year, with urban employment exceeding rural in 10 of those months. At India’s stage of development, this is relatively high, particularly in urban centres. Second, state-level initiatives are geographically limited and also at a nascent stage. It is difficult to gauge how useful they are for workers from UP, Bihar, Rajasthan and West Bengal – states that were destinations for more than 60% of the 11.4 million returning migrant workers during the first lockdown. As in the case of GoI’s health insurance scheme that was synchronised with similar state-level initiatives, it’s possible to design an overarching national urban employment guarantee programme.

That leaves two key questions, on cost and design. One estimate by researchers at Azim Premji University showed that 100 days of guaranteed work for 20 million workers with wages fixed at Rs 300 a day, and the overall wage bill capped at 50% of the total outlay, would cost GoI Rs 1 lakh crore. For perspective, the latest GoI annual budget is pegged at Rs 39.4 lakh crore. GoI’s existing urban employment schemes can be subsumed into an urban job guarantee scheme to control costs. As for design, it’s prudent to take an intermediate step such as ‘Duet’ (decentralised urban employment and training) proposed by economist Jean Dreze. It envisages using public institutions initially to introduce the scheme. Instead of going all out, it will allow GoI a chance to observe its working in smaller settings as urban governance capacity across India is uneven. But it’s worth sorting out these details because an urban employment guarantee plan can help those most hit by recent economic shocks.