Facing the job problem

Rajasthan's urban job programme might be difficult to implement

The government of Rajasthan has decided to initiate an urban job guarantee scheme in the state along the lines of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The Congress-ruled state intends to call it the Indira Gandhi Urban Employment Guarantee Scheme and will, like the MGNREGA, offer 100 days of demand-based employment. The state has set aside Rs 800 crore for the programme. Many details of the scheme are still awaited, but this can be seen as the first large-scale institutional response to the problems of urban unemployment revealed during the national lockdown in 2020 in response to the arrival of the pandemic. Some other states have introduced urban poverty relief programmes but they have largely been under-resourced and temporary. For that matter, it is an open question whether Rs 800 crore will be enough for an open-ended programme. The state government debt, which may be a third of gross state domestic product, has already reached levels considered dangerous by credit-rating agencies like CRISIL, which in September 2021 identified Rajasthan as one of eight states worryingly indebted. In this context, its shift to defined pension instead of defined contributions to social security can be seen as even more problematic. Expanding entitlements without proper fiscal backing is a recipe for disaster in the presence of a heavy debt burden.
 

There can be no doubt that the problem of unemployment and precariousness in urban areas is one that has to be addressed by governments at both state and national levels. The fact is that job creation, especially in the informal sector, has not kept pace with the requirements, according to every reasonable indicator and survey. The Periodic Labour Force Survey revealed the agricultural workforce was increasing for the first time in decades, in what is an unmistakable sign of urban distress. As a response, the Parliamentary Standing Committee on Labour had called for a national urban employment guarantee, although this call was ignored by the Central government, presumably because of the fiscal implications of a new programme with such scope. The Rajasthan attempt could thus be considered a pilot, with implications for whether a nationwide attempt is feasible or not.

It must be noted that there are multiple concerns about any urban job guarantee programme. For one, it will be considerably more complex to implement than the MGNREGA. There are fewer locations for unskilled labour in the public sector in urban areas. Work may not be available in the neighbourhood in which migrants reside. Second, who will be eligible? Will migrants with an out-of-state domicile be able to benefit from state-based urban employment guarantee systems? Can employment rights be considered transferable across geographies? Some of these concerns might be answered in the design of any proposed national urban employment guarantee scheme, but they are of special moment if state governments are introducing them. Nor, in the end, will schemes such as this address the underlying problem of poor job creation. This needs medium- and long-term solutions, which governments at all levels have been slow to introduce. It is to be hoped that the Rajasthan government, in its attempt to solve a very real problem, has not bitten off more than it can chew.