Due to the success of MGNREGA (Mahatma Gandhi Employment Guarantee Act) in rural India, the BJP-led government is now mulling on extending the flagship employment programme to workers in cities that are left unemployed. This was informed by a government official to Bloomberg.
The programme, when approved, may be rolled out in smaller cities and at the initially cost of about Rs 35,000 crore (USD 4.8 billion), said Sanjay Kumar, a joint secretary in the Ministry of Housing and Urban Affairs.
“The government has been considering this idea since last year," he said. “The pandemic gave a push to this discussion."
Modi’s government is already spending more than Rs 1 lakh crore on a rural jobs programme this year. Through this programme, the workers in the villages can earn a guaranteed minimum daily wage of Rs 202 for at least 100 days a year.
According to the Crisil report, the average income per person per month under the MGNREGA doubled to Rs 1,000 in the first four months of this fiscal from Rs 509 in the previous year. “The April-July period typically sees 25 per cent greater work execution (in terms of person-days) under the scheme compared with the rest of the fiscal, thereby aiding rural income," Crisil said. “This fiscal, however, these four months saw a growth of 46 per cent year-on-year in person-days, coupled with an increase of 12 per cent in average wage under the scheme.”
With an urban edition to the programme, the government will be able to help revive urban demand which has hit due to COVID-19-induced lockdown. The Indian economy has witnessed around 23.9 per contraction in the last quarter on a year-on-year basis.
Kumar further revealed that the idea is to start with smaller towns because big-city projects typically need professional expertise.
The employment programme involves employing people for local public-works projects such as road-building, well-digging and reforestation. Under this scheme, around 27 crore people were covered.
COVID-19 also destroyed livelihoods in urban India, creating a new underclass of workers who are being pushed into poverty, according to an analysis by the London School of Economics.