The Prime Minister’s Economic Advisory Council (PMEAC) recently came out with two important recommendations — an urban job guarantee scheme along the lines of the MGNREGA and a universal basic income. These recommendations were based on a report titled ‘State of Inequality in India.’
The report devotes a great deal of space to the state of inequality in India and though it has recommended an urban job guarantee scheme and a universal basic income, it provides precious little details on them.
Some of the findings of the study are stark — the top 10 per cent have 30-35 per cent of the total income. The bottom 50 per cent earned 22 per cent of total income.
Between 2017-18 and 2019-20, the income growth of the bottom 50 per cent was 3.9 per cent whereas for the top 10 per cent income growth has been at 8.1 per cent. An even more stark proof of growing inequality is that the top 1 per cent population’s incomes grew by 15 per cent while the bottom 10 per cent saw a one per cent fall.
The report also flags the issue of the low female labour participation rate, arguing that it not only exacerbates the inequality problem but also excludes 50 per cent of the population from economic mobility. It is in this context that the PMEAC recommends a demand-based urban jobs guarantee scheme for at least 100 days a year and a universal basic income.
There has been a growing demand for an MGNREGA-like scheme for the urban sector over the last few years. In the recent past six States have come out with an urban job guarantee scheme — Kerala, Odisha, Rajasthan, Tamil Nadu, Jharkhand and Madhya Pradesh.
APU report
There is one important report brought out by the Centre for Sustainable Employment of Azim Premji University in 2019 titled ’Strengthening Towns through Sustainable Employment: A Job Guarantee Programme for Urban India’, which goes into great detail on the design of such a scheme.
The report gives a detailed list of activities that can be covered under the schemes, the type of workers (skilled, semi-skilled) as well as the mode of funding such a scheme.
This report proposes 100 days of guaranteed work at ₹500 a day. It also suggests 150 days of contiguous training and apprenticeship for a stipend of ₹13,000 a month for educated youth. So the scheme has two components — one for educated youth and the other for unskilled and semi-skilled workers.
The programme, according to the APU report, will cover three types of urban centres — towns with populations up to 50,000; towns with population between 50,000 and 3,00,000; and towns with populations of 3,00,000 and one million.
The jobs on offer are divided into five groups:
- Public works: This includes the construction and maintenance of civic infrastructures such as roads, pavements, cycling paths, and bridges.
- Green jobs: Creation and maintenance of public green bodies such as parks, lakes, ponds and other water bodies.
- Monitoring and surveying jobs: This includes collecting and classifying information regarding the quality of public works.
- Administrative assistance: These jobs include providing administrative help to local municipal offices, public schools, and healthcare centres.
- Care work: This includes assisting municipal staff in child care centres, anganwadis, and providing care for the elderly. These functions have assumed critical importance after the Covid pandemic.
So the jobs provided will employ workers who are skilled, semi-skilled, and unskilled. The jobs dealing with the creation and maintenance of public infrastructures like roads and footpaths will need unskilled and semi-skilled workers whereas jobs dealing with administrative assistance will need skilled jobs who need to be college graduates.
The report also goes into great detail about how the wages should be calculated for each job and how the funds should be deployed. Like the MGNREGA this scheme will also have a Central and State component in the funding. Most importantly the report says the local administrative bodies — panchayats, municipal corporates, and urban local bodies —need to play a crucial role in designing projects, hiring workers and payment of wages.
So the State governments need to devolve both administrative powers as well as funds to them. Rajasthan’s recently announced Indira Gandhi Shehri Rozgar Guarantee Yojana has some features that are in line with this report’s recommendations.
Twists and turns
The Modi government’s attitude towards job guarantee schemes has seen many twists and turns over the last eight years. When the BJP-led NDA came to power in 2014 it was quite lukewarm towards the MGNREGA.
Economist and Academic MR Sharan in his book ‘Last Among Equals: Power Caste and Politics in Bihar’s Villages’ describes how Prime Minister Narendra Modi in the 2015 Budget session of Parliament made a scathing indictment of the scheme saying, “This is a living monument of your (Congress) failure to tackle poverty in 60 years.”
Riding high on the rhetoric of the ‘Gujarat model’, the Modi government was deeply suspicious of the entitlements-based approach to development, viewing that as a relic of the Congress regime.
In fact, a group of academics, based both in India and abroad, even wrote a letter to the Prime Minister then against taking any hasty move in scrapping MGNREGA, arguing that, warts and all, it was still the only safety net available to economically vulnerable Indians.
The surge in demand for MGNREGA work after disruptions such as demonetisation, GST, and the Covid pandemic led to a change in the government’s stance and that its Economic Advisory Council now is recommending an urban version of this scheme is proof of that.
The government could use the Azim Premji University report as a blueprint to design a credible urban jobs guarantee scheme. Given the economic uncertainty that lies ahead and the precarious jobs scene especially in the urban areas, the government should seriously consider bringing out an ‘urban MGNREGA.’
In the run-up to the 2024 general elections, this scheme could even yield political dividends for the Modi government.