Urban Employment Guarantee Scheme

WHY IN THE NEWS?

 Recently, the Rajasthan Government has announced the Indira Gandhi Shahri Rozgar Guarantee Yojana, an urban employment guarantee scheme to augment the employment rate, in the aftermath effect of the global Pandemic scenario.

STATUS OF THE SCHEME

• Urban employment scheme such as Swarna Jayanti Shahari Rozgar Yojana (SJSRY)was launched in 1997 and was replaced by National Urban Livelihoods Mission (NULM) in
• However, these were not employment guarantee
• It was the state of Kerala which came up with the urban version of MGNREGA called “Ayyankali Urban Employment Guarantee Scheme” where the practice is further followed by Odisha, Himachal Pradesh, Madhya Pradesh, Jharkhand, and Rajasthan at the

NEED OF THIS PROGRAMME

1. High unemployment: Urban areas are facing an unemployment rate of around 7% as per the Periodic Labour Force Survey.
2. Jobless growth: The nation is witnessing a clear economic growth, but employment rates are not increasing
3. Widening inequality: Deepening inequality among various sections of the economy disrupting social
4. Soaring inflation: Rising inflation hurts the poor in cities more than in rural
5. Inadequate Working conditions: Poor work quality, as well as lack of essential infrastructure facilities, are a cause of

BODIES RECOMMENDED -URBAN EMPLOYMENT GUARANTEE SCHEME

• Prime Minister Economic Advisory Council: Recommended the need for an employment guarantee scheme in urban areas on account of rising inequality and wealth concentration as per their “State of Inequality in India “Report.
• Parliamentary Standing Committee on Finance: Highlighted the essentiality of an urban employment guarantee scheme citing growing
• Standing committee on Labour Ministry: Stated the need of having an urban-specific scheme on account of the pandemic

MODALITIES TO BE FOLLOWED

1. Understand the ecosystem: It is not wise to replicate completely the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 as the Urban ecosystem is different from the rural
2. Prioritization of cities: Choose Tier 2, or Tier 3 cities as they are less developed and prevalence of high unemployment as compared to Tier 1 which is better in terms of infrastructure
3. No space for ambiguity: There should be a clear clarity on who should provide employment whether the Government or the Private sector or a mix of
4. Coupon Methods: Provide coupons to Schools, Hospitals where they can en-cash and provide employment to the needy ones in urban
5. Eligibility Criteria: Ascertain eligibility in terms of locals, migrants, economic conditions, and domicile basis and prioritize the needy ones, especially Women.
6. Skilled /Unskilled: Decide the type of employment planning for the scheme and provide training according to the
7. Days and wages: It should be decided according to the prevailing conditions to meet the cost of living which may vary from state to

IMPLICATIONS OF THE SCHEME

1. Burden on Public Exchequer: A substantial budget allocation is needed which exacerbates the financial strain of the
2. Vote Bank Politics: Due to political pressure, the government could not end the scheme in spite of its Once started, the schemes cannot be repealed in the Indian economic situation.
3. Violation of fundamental rights: The schemes cannot be imposed on private employment providers as it curbs their freedom of profession under Article
4. Disparity in wage rate: It may further widen the inequality in the
5. Disguised & Underemployment: Providing unskilled jobs may result in the under utilization of human
6. Encourage Migration: People may start migrating to those states which are offering high wage It results in the proliferation of slums and the widening of income inequality in society.

WAY FORWARD

1. Temporary measure: Employment guarantee schemes to be initiated as a one-time practice and they should be stopped once the situation improves.
2. Skilling, upskilling, and reskilling should be the
3. Infuse capital: Prime investment from the government could boost the private sector to provide additional employments which may kick start the
4. Promote self-employment through Stand-up India, Startup India schemes can initiate more
5. State-specific programs: National-level schemes are not financially State-specific programs can customize schemes according to their specific problems.
6. Integration of data: Collection and collaboration of information about workers, skills sets, and employers will satisfy demand and supply equilibrium.
7. Strengthen existing schemes: Pension funds, National Food Security Act 2013, Divyangjan Swavalamban Scheme,etc., to safeguard the interest of needy ones.
8. Better targeting of beneficiaries: To avoid misuse and ensure the betterment of public service

CONCLUSION

Initiating Urban Guarantee schemes have a multitude of effects on the Indian Economy. The scheme could help in reaping the maximum demographic dividend by building required skill sets and reducing the widening inequality in the future.