An Indian Duet For Urban Jobs

A ready-to-implement urban employment guarantee plan, by NREGA architect Jean Drèze.
Workers and day laborers gather outside shuttered stores in New Delhi, on Aug. 31, 2020. (Photographer: Anindito Mukherjee/Bloomberg)
Workers and day laborers gather outside shuttered stores in New Delhi, on Aug. 31, 2020. (Photographer: Anindito Mukherjee/Bloomberg)

An urban employment drive would be a useful form of economic stimulus in the post-lockdown period, and help to revive public services.

It is touching to observe the bewilderment that followed the recent release of India’s provisional gross domestic product estimates for the first quarter of 2020-21. After all, we already knew from a series of household surveys that economic activity had dipped during that period. If there are mass unemployment, poverty, and hunger, chances are that the economy is not doing so well.

A recent survey of 8,500 urban workers, conducted by the Centre for Economic Performance at the London School of Economics, is particularly enlightening. More than half of the respondents had not earned any income in April and May. The average income decline was close to 50%, rising to 82% among migrant workers. Further, income declines were larger for those who were poorer to start with, leading to a sharp increase in inequality among urban workers. The share of the top income quartile rose from 64% prior to the lockdown to a staggering 84% during the lockdown, leaving just 16% of total income for three-quarters of the reference population.

Hopefully, things have improved for urban workers in the last few weeks. Perhaps some locals even benefited, in the destination areas of migrant workers, from the labour shortage created by reverse migration. The general level of economic activity, however, is still way below normal, especially where periodic lockdowns continue. Entire occupation groups have been thrown out of work for months and are not going to recover any time soon. Think of snack-vendors, bus conductors, cinema-hall attendants, sex workers, band performers, and of course migrant workers. Most of them must be desperately looking for fallback occupations.

This situation has given a new lease of life to the idea of an urban employment guarantee law, similar to the National Rural Employment Guarantee Act. An urban counterpart of NREGA would provide the sort of fallback employment option that so many people need at this time, and some people need at all times. But framing an urban employment guarantee law requires more experience with public works in urban areas than we have today. Remember, NREGA built on decades of experience with drought relief works in rural areas.

Thinking Out Of The Box

It is possible, however, to envisage an urban employment scheme that would help to generate the required experience along with providing immediate relief to urban workers. Some states have already tried to launch this sort of scheme. Kerala took the lead 10 years ago with the Ayyankali Urban Employment Guarantee Scheme, which generated 27 lakh person-days of employment in 2019-20, compared with 8 crore person-days for NREGA in Kerala. This year several states, including Himachal Pradesh, Jharkhand, and Odisha, have also launched schemes that pass for some sort of urban employment guarantee. Because of the budget crunch, however, these are largely symbolic schemes with tiny budgets as things stand.

Here is another option – let’s call it a Decentralised Urban Employment and Training or DUET scheme. The basic idea is as follows. The government would issue ‘job stamps’ and distribute them to approved public institutions – schools, colleges, hostels, shelters, jails, museums, municipalities, government departments, health centres, transport corporations, neighbourhood associations, urban local bodies, and so on. These institutions would be free to convert each job stamp into one person-day of work within a specified period, as long as they arrange the work. The wages would be paid by the government directly into the workers’ account on the presentation of job stamps, duly certified by the employer. To avoid collusion, employees would be assigned to employers by an independent placement agency. Some of the work could be organised on a part-time basis—say four hours per day—to make it easier for women to participate.

This approach would have many advantages.

  • First, activating a multiplicity of approved employers would help to generate a fair amount of employment.
  • Second, the approved employers would have a stake in ensuring that the work is productive.
  • Third, the scheme would require little staff of its own since existing institutions are the employers.
  • Fourth, workers would have a secure entitlement to the minimum wage, and possibly other benefits.
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How Would It Work?

What sort of work could DUET involve? There is plenty to do. To start with, India’s public institutions as well as public spaces (parks, ponds, roads, drains, walls, playgrounds, bus stands, railway stations, what have you) have a chronic problem of poor maintenance. As public premises reopen after months of lockdown, extra work will be needed to restore them – cleaning, sanitising, white-washing, weeding, repairing, painting, plumbing, and so on. This is an excellent time for an urban employment drive. Looking beyond maintenance, there are vast possibilities of productive work in fields like public health, environmental improvement, and perhaps even home care. An imaginative list of possible public works in urban areas is available in a recent proposal for urban employment guarantee prepared by the Centre for Sustainable Employment at Azim Premji University.

The training component of the scheme—the T in the DUET—would mainly take the form of on-the-job training, as unskilled workers team up with skilled workers. The placement agency, aside from assigning workers to employers, could also play a useful role in skill formation and certification. In principle, a municipality could have multiple placement agencies, some of them organised as workers’ cooperatives. Further support for DUET could be sought from institutions and schemes like the Industrial Training Institutes and the National Urban Livelihood Mission.

Some countries already have DUET-like employment-subsidy schemes, for instance, the ‘service voucher schemes’ found in several European countries. The main difference is that SVS vouchers are normally used by households rather than public institutions, mainly for domestic services such as cleaning, cooking, and ironing. Still, this is an encouraging precedent – the best SVS schemes are widely used and very popular.

Right now, there is very little room in state budgets for ambitious initiatives.

But DUET could be initiated as an emergency, centrally-sponsored scheme, and owned by state governments as and when circumstances permit. Aside from assisting the unemployed, this would be a useful form of economic stimulus in the post-lockdown period, and help to revive public services. Last but not least, DUET would be a useful step towards employment guarantee in urban areas.

Jean Drèze is Visiting Professor at the Department of Economics, Ranchi University.

The views expressed here are those of the author and do not necessarily represent the views of BloombergQuint.

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