- An urban jobs safety net
An urban jobs safety net
According to the World Economic Outlook report of April, 2021 of the International Monetary Fund (IMF) 95 million people have fallen into the ranks of the extreme poor category.
GS-III: Indian Economy (Human Resource, Unemployment, Mobilisation of Resources, Growth and Development, Inclusive growth and issues therein)
Dimensions of the Article:
- Indian Economy and impact of Covid-19 on employment
- NREGA outlay
- Rural-urban livelihood divide
- Himachal Pradesh Case Study
Indian Economy and impact of Covid-19 on employment
- The lockdown enforced to curb the pandemic meant that the economy came to a standstill and the fact that Indian economy was facing a slump in growth figures for several quarters meant that the problem of unemployment became aggravated.
- The Centre for Monitoring Indian Economy data indicates a gradual slowdown in employment recovery from July, with the latest figures indicating a sharp rise in the national unemployment rate from 6.51% in November to 9.06% for December.
- As per the Centre for Monitoring Indian Economy’s estimates, the unemployment rate in India peaked to 23.5% in April 2020 before falling to 6.9% in February 2021.
- The lockdown witnessed a migrant crisis. Thousands of migrants rushed back to their homes in rural India amidst the pandemic.
- The National Rural Employment Guarantee Scheme (NREGA), provided the much-needed employment to the people heading back.
- For labour flocking back to rural India, the employment support came in the form of an increased outlay for the National Rural Employment Guarantee Scheme (NREGA), which witnessed a meteoric rise of 243% person workdays.
- The increase in people enrolling in the NREGA meant that the Rural Development Ministry spent nearly 90% of its increased ₹864000 crore allocation by the month of November 2020, while still being unable to fulfil demands for nearly 13% of the 75 million households that demanded work.
- The guaranteed employment under NREGA proved to be a boon to the rural people, especially during the pandemic.
- Indian cities have witnessed numerous businesses shutting down, relocated, downsizing leaving behind millions of workers without a job. This has left many seeking refuge under the gig economy for employment.
Rural-urban livelihood divide
- As the economy decelerates, the challenge is to minimise livelihood losses.
- Traditionally, governments have addressed this issue from a sectoral viewpoint.
- With contemporary realities, there is a need to approach this from a rural-urban perspective. When there is an economic shock, it is essential to provide people with formal access to a livelihood safety net. The livelihood safety net must have comprehensive coverage.
- Unfortunately, the livelihood safety net exists only in the rural areas through the MGNREGS.
- Urban India does not have such a livelihood program.
- Though the Indian government operates the National Urban Livelihoods Mission the scheme does not have guaranteed wage employment. It is only focused on self-employment through skill up-gradation and credit linkages through banks.
- It was until recently considered that migration in India was essentially a rural to urban phenomenon. This pandemic has demolished that myth.
- Huge migration of labour during the first wave of the pandemic brings to light the rural-urban livelihood security divide.
Himachal Pradesh Case Study
- A few States have experimented with a wage employment-based urban livelihood scheme.
- Himachal Pradesh (H.P.) launched the Mukhya Mantri Shahri Ajeevika Guarantee Yojana (MMSAGY) in 2020.
- It provided 120 days of guaranteed wage employment to every household at minimum wages in FY 2020-21, in urban areas.
- Any adult member of a household, less than 65 years of age, residing in the jurisdiction of the urban local body (ULB) and willing to engage in unskilled work at projects being executed or in sanitation services being provided by the municipality could register under the scheme.
- A job card was issued to the beneficiary within seven days of registration and employment is provided within a fortnight. Otherwise, the beneficiary is eligible to be compensated at a rate of ₹75 per day.
- The government funded the wage component from the grants already available to ULBs under the State and Central Finance Commissions.
- In a year of its operation, a quarter-million man-days, benefiting about 3% of the total urban households in H.P., were generated.
- If the scope of MMSAGY is broadened to include muster-roll based works, other municipal services, etc., it could enhance livelihood opportunities.
-Source: The Hindu