A study commissioned by the Prime Minister’s Economic Advisory Council has recommended an urban job guarantee scheme on the lines of MGNREGA. While the term ‘jobs guarantee’ may seem a misnomer, an in-principle case for an urban safety net can be easily made — more so in the wake of the pandemic experience. The nationwide lockdown in mid-2020 was implemented strictly in urban areas, leading to job losses across a swathe of small-scale industries and services. This led to a dramatic reverse migration. Food transfers under the Pradhan Mantri Garib Kalyan Yojana (topping up entitlements under the National Food Security Act) as well as enhanced MGNREGA works saved the day for the rural population. But the urban poor which has not signed up for PMGKY or Jan Dhan Yojana fell through the cracks — not just casual workers but self-employed vendors, rickshaw drivers, barbers and such others. As an NCAER study on the lockdown impact and welfare delivery during 2020 observes, “Informal salaried and casual wage workers were more likely than cultivators to experience severe income shocks...Since access to safety nets, particularly cash transfers, depended on pre-existing registries, a section of households most affected by the pandemic and the related lockdown were excluded, with the probability of rural residents receiving cash transfers being eight percentage points higher than that for urban residents.” Notwithstanding the best efforts of the Centre and the Reserve Bank of India to provide succour, a section of the urban poor could certainly do with some support in cash and kind — particularly in these inflationary times. Besides cushioning distress, the urban productive sectors need a steady supply of labour in both quantity and quality terms. They cannot afford another reverse migration.

Such a scheme should not be tailored along the lines of a job guarantee like MGNREGA. This is because the urban workforce is more diverse than its rural counterpart. The MGNREGA is essentially an income-support programme for off-season farm workers, whereas the urban workforce can be divided into two broad categories: those living on the margins in cities for years, barely making ends meet; and a more aspirational migrant population which is trying to improve its living standards and is on the lookout for opportunities. The first can be well served by community kitchens and ration supplies, besides a subsistence payout. They need to be enrolled on the government portals for benefits such as pension schemes. However, for the rest of the workforce an investment in skilling is essential — it ties in with India’s ambitions to ramp up competitiveness in manufacturing. The industrial training institutes need to be brought in line with the latest skilling needs by working in concert with industry.

India’s welfarism cannot be restricted to a dole, whether for rural or urban India. It must instill long-term competencies. Keeping this objective in mind, the design of the scheme must be given considerable attention. There are six States that have urban job guarantee schemes — Rajasthan, Himachal Pradesh, Kerala, Odisha, Madhya Pradesh and Tamil Nadu. There are little indications so far of their having gone beyond a dole-based approach.