Can Urban MNREGA

solve India’s
unemployment crisis?
Supratim Shome.
Introduction
 It’s a well accepted fact that covid 19 pandemic has worsened indian
economy
 India’s GDP Q2 2020:Economic contraction narrows to 7.5% from 23.9% in
Q1(Ref Business Standard)
 Due to fall to 7.5% in July to Sep ,economy in technical recession for the first
time ever.(ref. Scrool.in 6th DEC 2020)
 The CEP surveyed 8500 workers aged between aged 18 to 40 in urban india,
unlike many developed and in some developing countries 52%of urban workers
went without work or pay and received no financial assistance to tide over
the crisis.
 During lock down India's jobless nos crossed 120 million in April 2020(ref
Nikhil lamdar BBC news Mumbai) & UN estimated approx. 260 million pushed
to poverty(ref news18 India)
Urban Employment
 Most us might think that Rural india has witnessed more job loses than urban
India

 One of the key reasons of behind rural India's better economic performance is
MNREGA(ref Sudha Narayan TIF) it increases their income, improved their
food intake, nutrition and health status. And offered opportunity for the
woman
 40,000cr allocation in MNREGA-FM Sitharaman (ref. Hindustan times 17.05.20)
 Given the Success of MNREGA, many questioned that do we need such
schemes in cities??
DUET- A proposal for an urban work programme

 Few economist in 2019 and recently John Dreze an Indian economist; Ranchi
University have come up with an detailed proposal Decentralised Urban
Employment and training-DUET
 MNREGA is scheme that guarantees 100 days of unskilled days of work to rural
residents. Eg: Building roads
 Under this scheme state Govt. would distribute job stamps to approved public
institutions.1 job stamp valid for a day. Govt will provide it.
 Urban populace will receive employment, public institutions will receive labor
supply and funds to improve the infra.
 To reduce the scope corruption he proposed an independent placement
agency that employs workers and verify their stamps
Motivation for the scheme
 1st-unemployement rate in urban India has drastically increased. Informal
workers doesn’t receive salary or benefits like heath insurance. Eg
construction workers, street food vendors, house helps)
 2nd- India in our urban areas and cities needs immediate improvement. Eg: we
witness artificial flood like situation with a little rain in the cities.
 This scheme will provide jobs such as cleaning, painting ,plumbing etc to
improve public infra.
 Estimated India's population 1.8 billion by 2050, 1 billion will live in the cities
 But municipal corporations are unable to coping well with maintain and
develop urban infra(ref niti ayog report 2015)
 According to john dreze this scheme could aid municipal corporation in
developing urban infra in cities and helps them developing capacity building
Issues with the scheme
 MNREGA is a seasonal scheme. That means rural people find emplyment in the
non harvest season but urban areas doesn’t have any seasonality like this.
 Work in Rural areas doesn’t require range of skills, but even work like
whitewashing or plumping in urban areas requires basic skill.
 Placement agencies need to employ skilled and unskilled workers
 Large part of the construction work handled by the contractors but can GOVT
agency replace the contractors??
 If any thing goes wrong contractors can be held accountable for how will it
be in the case of govt. agencies??
 Wage in the informal sector is lower than the designated minimum wage. But
for duet as govt. policy that minimum wage has to be paid
 Due to this shift from rural MNREGA to URBAM MREGA might happen
 That will increase demand and what if demand surpass supply??
Answering the critics
 Experts believes we needn’t worry about these issues. As it is not a very new
one of its kind of scheme.
 Odisha urban wage employment initiative. Himachal Pradesh “Mukhya Manrti
a Jeevika guarantee Programme, latest Jharkhand’s “Mukhya mantra sramik
yojna”, “Kerela ayyankali urban employment guarantee Programme running
for a few years
 So central govt. could study these state scheme to device a national scheme.
 Reduce the migrate from rural to urban MNREGA – calculated equate wages
rate that of rural MNREGA.(purchasing power parity)
 Urban MNREGA cannot be a exact replica of the rural MNREGA
 As it requires skilled workers, so the job of the placement agency is not
employ but to train as well.
 Job stamps should distributed by local govt. bodies with the help of central
govt. not the state govt.
Conclusion

 though the major problem is funding approx. 50,000 cr per year requirement is
their.(TIF ref)
 Still many experts that this scheme has the potential to resolve the issue with
unemployment and urban infra
 The govt. should take initiative and create pilot project in the selected cities
the revel the effectiveness of the scheme.

 Thank you