CIVIL SERVICES CLUB

Current Affairs 100

CSFC - 2023
Civil Services Foundation Course

Urban Employment Guarantee Scheme (UEGS)

Relevance: For Prelims: Government Schemes of States; For Mains: GS-3-

Indian Economy and issues relating to Planning, Mobilization of Resources,
Growth, Development and Employment.

Why in news?

 Recently, Rajasthan Government in its annual financial statement

(Budget) 2022-23 has announced Indira Gandhi Urban Employment
Guarantee Scheme for employment in urban areas.
 With each passing year, a growing number of Indian state governments
are considering an urban version of MGNREGA. Kerala (AUEGS or
Ayyankali Urban Employment Guarantee Scheme), Odisha (UNNATI or
Urban Wage Employment Initiative), Madhya Pradesh (Mukhyamantri
Yuva Swabhiman Yojana), Himachal’s Mukhya Mantri Shahri Ajeevika
Guarantee Yojna (MMSAGY)and Jharkhand (Mukhyamantri Shramik
Yojana) are a few examples.

History of UEGS in brief

 Swarna Jayanti Shahari Rozgar Yojana (SJSRY) launched in 1997

provided employment to the unemployed and underemployed urban
poor through self-employment and wage employment.
 The SJSRY was replaced by the National Urban Livelihoods Mission
(NULM) in 2013. This programme, and its subsequent version, laid

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more emphasis on self-employment and entrepreneurship than on wage

employment.
 Yuva Swabhiman Yojana: The Madhya Pradesh government announced
a 100-day urban job guarantee scheme, the Yuva Swabhiman Yojana,
which provides urban youth with varying educational qualifications
with a wide set of job.
 Ayyankali Urban Employment Guarantee Scheme (AUEGS): Since 2010,
Kerala has been running a programme called the Ayyankali Urban
Employment Guarantee Scheme (AUEGS) which guarantees 100 days of
wage-employment to an urban household for manual work.
 Green New Deal: In the United States of America, ‘Green New Deal’
proposals provide for a ‘Green Job Guarantee’ which enshrines ‘a legal
right that obligates the federal government to provide a job for anyone
who asks for one and to pay them a liveable wage’.

Need for a UEGS

 According to Periodic Labour Force Survey (PLFS) report of the National

Sample Survey Office (NSSO), the unemployment problem is aggravated
in India especially in cities and towns. Economic impact of the
lockdown has been largely an urban India impact.
 Nutcracker scenario for a host of businesses: on one hand there is
demand destruction on a massive scale, and on the other, lack of
enough labour to restart production/operations.
 Unemployment in urban areas at 7 per cent is higher than the
unemployment rate in rural areas (4 per cent), as per PLFS report
(2019-20).
 Indian towns and cities continue to be plagued by the prevalence of low-
wage, poor quality, informal work. PLFS data show that despite a rise in
the prevalence of regular-salaried work, over 50 per cent of the urban
workforce remains either self-employed or in casual wage work.

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 In the context of the present employment crises, it is worthwhile

considering to introduce an employment guarantee programme in
urban areas. The scheme, which is similar to MGNREGS, would provide
minimum livelihood security to the poorest of the poor in the urban
areas.
 Centrally funded programmes like the Smart Cities Mission and
Jawaharlal Nehru National Urban Renewal Mission (JNNURM) have
disproportionately focused on development of bigger towns and cities.
New programs need to help in the development of small cities and
towns.

How can a UEGS be designed?

 It should have a broader scope than the Mahatma Gandhi National

Rural Employment Guarantee Act because it is an urban programme.
 This would create opportunities for people with a wide range of skills
and education levels to work in a variety of jobs.
 It would not be at the expense of MGNREGA, but rather would work in
tandem with it.
 It could include a new set of “green jobs” such as urban commons
creation, restoration/rejuvenation, and maintenance.
o Green spaces and parks, forested or wooded areas, degraded or
waste land, and water bodies are examples of such places.
 It could also include a set of jobs that address the “care deficit” in cities.
 The urban working class could benefit from child care, as well as care
for the elderly and disabled, for example, Time Bank in Switzerland.
 Wages could be distributed at the local ULB in a decentralised manner.
 Another novel feature is the creation of a skilling and apprenticeship
programme for unemployed young people with a college diploma.

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Advantages of having a UEGS

 Employment guarantee schemes are generally self-targeting and

demand-driven. In a country like India with scarce income data, an
employment guarantee programme circumvents the complicated
process of identifying beneficiaries.
 An employment guarantee has the potential to foster active citizenry. It
enhances engagement in democratic decision-making through public
meetings and public hearings.
 On one hand, it would increase people’s political capacities in
community building and on the other it will strengthen local
accountability.
 The programme can generate a new set of ‘green jobs’ that can
strengthen the capacity of ULBs as well as promote sustainable urban
development.
 Such a programme would give urban residents a statutory right to work
and thereby ensure the right to life and livelihood guaranteed under
Article 21 of the Constitution.
 It increases demand by raising incomes directly, and indirectly in the
informal sector, by improving the fallback position of workers.
 Check migration to large cities from small and medium towns.
 Such programme can bring in much-needed public investment in towns
to improve the quality of urban infrastructure and services
 It would enable people to contribute productively to the creation of
useful public goods and services.

Challenges

 The basic premise of a healthy rural to urban economic transformation

is to transfer workers from low-skill and low-productivity professions to
high-skill jobs. It would be extremely difficult for an urban employment
guarantee scheme to ensure this.

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 Increase Migration from Rural to Urban areas: A potential problem with

an employment guarantee programme for urban areas is that it may
increase migration from rural areas.
 Crowding out private sector employment can have other repercussions
too, such as the Jharkhand scheme.
 While such programmes and schemes are intended to be temporary
relief measures, they have a tendency to become quite addictive. Any
future government is unlikely to repeal such a programme once it has
been implemented, even if it hurts the state exchequer.
 Fund: Successful implementation of scheme require huge fund. This
may create extra burden on state and centre, especially amidst the
serious cash crunch with the Central as well as State Governments.
 Different from MGNREGA: Urban unemployment is different from rural.
In urban area unemployment is primarily among skilled and semi-
skilled.

Way Forward

 Passage of a National Urban Employment Guarantee Act — This Act will

legally bind the state to provide a fixed number of days of work for all
eligible people who apply under the programme, lay down the structure
for administering the programme, and provide accountability
mechanisms for its operation.
 Creation of a Ministry of Employment –such a Ministry will be
responsible for all matters related to employment generation including
the administration of MGNREGA.
 Establishing functionaries for administering the programme — The
Central and state governments have to hire, through an open process, a
set of dedicated staff who are responsible for administering this
programme.

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 Right to timely grievance redressal: proactive transparency and

accountability structures such as mandatory periodic social audits and
public hearing through a designated independent unit, as well as a
mandatory grievance redressal architecture.

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