Urban MGNREGA for urban life

The design of the urban-MGNREGA should be careful so that it will not compete with the private sector employment opportunities.


Unemployment and lack of social safety nets are the biggest problems faced by urban slum-dwellers and migrant workers during covid-19. Urban joblessness rose in March as the second wave of the covid-19 increased unemployment once again. The urban unemployment rate increased to 7.24% in March from 6.99% in February, according to the monthly data of the Centre for Monitoring Indian Economy (CMIE). Economic activities in urban areas are subdued due to uncertainty in the business environment, especially due to subdued performance of transport, construction, hospitality, and small-scale sectors. During the first phase, urban migrant workers were hard hit than rural workers and were without work for several months, some go back to villages.

In rural areas, coverage of various safety nets schemes like guaranteed work under MGNREGA, food grain distribution under the PDS scheme, direct money transfer to farmers under PM-KISAN are substantial, but the similar safety nets are either absent or less effective in urban areas. A recent NCAER study highlighted that more families in the rural areas (52 percent) received extra rations compared to urban areas (42 percent) during the lockdown period of COVID. During the COVID period, there is widescale reverse migration in the hope of getting these benefits in rural areas. The attractiveness of rural areas further increased as many workers have their own houses and agricultural land to fall back on.

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However, in the long run, only urban areas have the capacity to provide necessary livelihood options for the majority of these migrant workers, as agricultural and rural sectors, are less paying compared to urban sectors. And there no possibility of increasing labor absorption in the agricultural sector. A recent ICRIER study highlighted that more than a third of the reverse migrants (38.6 percent) reported having no work after returning to their native place. The reverse migration has to be avoided with the effective implementation of broad-based safety nets in urban areas.

Migrant workers and their families are lifelines for the urban economy, the majority are involved in all sorts of essential services like marketing vegetables, door-to-door delivery of food and other groceries, street vendors, milk, and other essentials, working as auto drivers and watchmen, etc. As urban migrant workers live from hand to mouth, if they don’t get employment that day, their families’ food security is in jeopardy. Hence, an employment guarantee similar to that of MGNREGA may be introduced on a pilot scale to assess the pros and cons of such a program for upscaling in the future.

Unlike rural workers, the urban migrant workers are younger and more willing to learn and work as semi-skilled in various types of industries. But at the same time, they are also the most vulnerable people.  Generally, they are treated as secondary citizens by local elected bodies as they lack voting rights, and many times, they don’t have Below Poverty Line (BPL) cards to get enrolled in various government schemes. With the COVID, their condition became precarious, as their incomes dried up and there was no social safety net to fall back on. For these urban migrant workers, there is an immediate need to design and implement a broad-based social safety net like MGNREGA to provide casual employment through public works. These public works schemes will not only provide livelihood security for migrant workers but also engage them in work and develop their skills for future employment in the private sector.

The wages received by migrant workers under these types of public works programs are mostly spent on grocery and food items within the local economy, which create both local demands for locally produced goods and services to boost the local urban economy and will act as a growth engine with multiplied effect on economic growth.

If the government plans these works under urban-MGNREGA around urban infrastructure like cleaning urban slums, construction of public toilets, building bus shelters, roads, schools, development of urban-afforestation and hospitals they will improve the deteriorating urban living conditions. The success of the schemes to be measured in its quick response to the demands of the urban-unemployed in times of crisis like a pandemic.

India is deficient in urban infrastructures like roads, schools, and hospitals. Due to this, there are many problems like overcrowding of slums, traffic jams, school dropouts, inadequate treatment for patients, health, social and psychological disorders.  The development of urban infrastructure removes all these problems and spurs the productivity of workers, growth, and better living conditions in urban areas.

However, the design of the urban-MGNREGA should be careful so that it will not compete with the private sector employment opportunities. Rather they have to complement the private sector employment by linking with the ongoing skill training programs under the Garib Kalyan Rozgar Yojana (GKRY). The wage rates offered under the scheme should be less than the ongoing market wage rate so that only surplus labor will be absorbed into the scheme on daily basis. However, these wage rates should cover the basic minimum needs of families. Most importantly, they have to follow social distancing norms and other health measures to safeguard against COVID.

A  Amarender Reddy,
Principal Scientist (Agricultural Economics),
ICAR-Central Research Institute for Dryland Agriculture, Hyderabad,
email: [email protected]

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Urban MGNREGA for urban life
The design of the urban-MGNREGA should be careful so that it will not compete with the private sector employment opportunities.
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