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Urban Employment Guarantee

  • 10 Sep 2022
  • 8 min read

For Prelims: Unemployment figures of India, Urban Employment Guarantee Schemes, MGNREGA

For Mains: Issue of Unemployment in India, Significance of Urban Employment Guarantee Schemes

Why in News?

Recently, the government of Rajasthan has launched the flagship scheme for Urban Employment, the Indira Gandhi Shehari Rojgar Yojana.

What do we need to know about the Scheme?

  • Aim:
  • Target Population: People in the 18 to 60 age group are eligible for the scheme.
  • Employment Opportunities:
    • Water Conservation: The renovation work at Khaniyon ki Baori comes under the water conservation works of the scheme.
    • Convergence: People can be employed in other centre or state level schemes, already having a material component, and which require labour work.
    • Other works include:
  • Urban Employment Guarantee Schemes of other States:
    • Kerala:
      • Ayyankali Urban Employment Guarantee Scheme (AUEGS), launched in 2010, aims at enhancing the livelihood security of people in urban areas by guaranteeing hundred days of wage employment in a financial year to an urban household whose adult members volunteer to do unskilled manual work.
    • Himachal Pradesh:
      • Mukhya Mantri Shahri Ajeevika Guarantee Yojna was launched in 2020 to enhance livelihood security in urban areas by providing 120 days of guaranteed wage employment to every household in a financial year.
    • Jharkhand:
      • Mukhyamantri Shramik Yojana was launched in 2020 to enhance livelihood security in Jharkhand State by providing a guaranteed 100 days wage employment in a financial year.

Why are Urban Employment Guarantee Schemes emerging in India?

  • Absence of “Guarantee” Schemes:
    • Swarna Jayanti Shahari Rozgar Yojana (SJSRY), launched in 1997, provided employment to the unemployed and underemployed urban poor through self-employment and wage employment.
      • In 2013, the SJSRY was replaced by the National Urban Livelihoods Mission (NULM).
    • India has had a history of urban employment schemes, but none of them were employment “guarantee” schemes.
  • Urban unemployment Rates:
  • Vulnerable Informal Sector:
    • According to the International Labour Organization, of the 535 million labour force in India in 2019, around 398.6 million have poor quality jobs. Further, the lockdown exposed the state of vulnerable employment in urban low-end informal jobs.
    • Vulnerable employment is characterised by inadequate earnings, low productivity and difficult conditions of work that undermine the basic rights of workers.
  • Rural Centric Schemes:
    • Most of the government schemes providing relief, be it from the Union government or state, prioritize rural unemployment and poverty like MGNREGA.
    • Prime Minister Garib Kalyan Rojgar Abhiyaan, launched in 2020, with an allocation of Rs 50,000 crore, to boost employment and livelihood opportunities for migrant workers returning to villages in the wake of the Covid outbreak.

Can UEG Scheme be an Extension of MGNREGA?

  • Existing Scheme’s Framework:
    • Currently in India, most UEGs appear to be a mere extension of MGNREGA to the urban areas.
      • Being the UEG in Himachal Pradesh, Odisha or Kerala, one common feature among them is providing employment for a specific number of days during the year to the urban households.
  • However, UEGs cannot be mere extension of MGNREGA due to following reasons:
    • Rural unemployment is mostly seasonal.
      • During peak farming season, very few rural people may be unemployed.
      • But there is no such seasonality in urban unemployment.
    • Capacity of the Panchayati Raj Institutions in rural and urban areas.
    • The public works in which the labour is involved are different in rural and urban economies.

Way Forward

  • UEG Scheme interventions by the States are a welcome step which give urban residents the right to work and ensure the right to life guaranteed under Article 21 of the Constitution.
  • Programmes like the Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) have focused more on the development of bigger towns and cities.
    • It is important to re-focus our attention to improving the livelihoods and ecology of urban areas beyond India’s major cities.
  • An urban employment guarantee programme not only improves the incomes of workers but also has multiplier effects on the economy.
    • It will boost local demand in small towns, improve public infrastructure and services, spur entrepreneurship, build skills of workers and create a shared sense of public goods.

UPSC Civil Services Examination, Previous Year Questions (PYQs)

Q. Disguised unemployment generally means (2013)

(a) large number of people remain unemployed
(b) alternative employment is not available
(c) marginal productivity of labour is zero
(d) productivity of workers is low

Ans: (c)


  • An economy demonstrates disguised unemployment when productivity is low and too many workers are filling too few jobs.
  • Marginal productivity refers to the additional output that is gained by addition of one unit of labour.
  • Since, in disguised unemployment, more number of labour than required are already engaged in the work, the marginal productivity of labour is zero.
  • Therefore, option (c) is the correct answer.

Source: IE

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