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Home / Opinion / Views /  Wanted: A job guarantee scheme for cities

Sanjiv Mehta, who heads Hindustan Unilever, a consumer products company that serves a vast cross-section of Indians and keeps a close ear to the ground, has suggested it’s time for the government to launch an urban job guarantee along the lines of India’s rural employment scheme. While calling for an extension of the latter’s outlay, which was enlarged to help village-dwellers tide over the covid crisis, Mehta drew attention to the plight of our urban poor. The livelihoods of large numbers in our cities depend on service sectors that have been battered by the pandemic. Restaurants, hotels, tourism-reliant businesses and proximity-based services were hit so severely that few could sustain their payrolls, while the impact was no less harsh on labour employed by builders and others. The exodus witnessed in 2020 from urban centres to the interiors after an all-India lockdown was a visible sign of acute distress, but we also have evidence that services have seen only a patchy recovery, city jobs still remain scarce and scarred incomes are yet to heal. That millions have fallen on hard times is undeniable. They need relief.

Consider the earnings compression suffered by those who led hardscrabble lives anyway. According to the 2021 round of the ICE360 Survey conducted by People’s Research on India’s Consumer Economy, a think-tank, the country’s poorest 20% saw their household incomes plunge by 53% over the last five years, even as the richest fifth logged a 39% increase. It is pertinent to note that informal-sector workers had borne the brunt of a formalization drive led by our currency switch and GST rollout about half a decade ago. Although covid restrictions disrupted commercial activity of almost every kind, the informally-engaged have again taken the hardest knock. When rural jobs for the asking were being discussed in the mid-2000s, this entitlement policy was promoted on the argument that an emergent economy like ours must not let anyone go hungry for want of work. For such a minimal welfare condition to be fulfilled, however, our safety net must cover everyone, no matter where the needy live. Widening our job guarantee would be both fair and useful as a relief measure.

The fiscal strain of paying job-seekers minimum wages for sundry tasks had constrained our initial promise to 100 days of assured pay every year for each rural family. Post-covid circumstances have pushed up that scheme’s annual allocation to over 1 trillion, but additional resources must now be found for urban coverage. With most urban spaces in such a shabby state, civic authorities could get plenty done. India’s e-Shram portal, created for casual workers to enlist themselves in a database, was seen as a prelude to an urban employment programme. But job hand-outs need no eligibility filters. Any window that assures people a means of sustenance should ideally be open to all. Instead of families, the offer should be for all adults, with proof of identity the sole requirement. Some opponents of the idea argue that it might attract jobless swarms to cities and burden their creaky public infrastructure further. As urban living is costlier, an unmanageable influx would be unlikely if wages are kept around the same as for rural jobs. The hard-up in cities can be supported without distorting patterns of migration. It may prove expensive, fiscally, but it would also help lift consumption among those with a high propensity to spend, thus aiding the revival of our economy.

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