A prospective extension

Exorbitant level of inequality in Indian cities makes urban employment guarantee scheme — on the lines of MGNREGA but with distinct features — an imperative

The latest CMIE data on unemployment rate show that unemployment in India continued to be high at 7.80 per cent in June 2022, with the urban employment rate being 7.30 per cent. At the same time, for May 2022, the urban employment rate at 8.21 per cent was higher than the overall unemployment rate of 7.12 per cent. Unemployment is definitely a matter of concern for policy makers and MGNREGA has proved to be a savior in rural areas but there is no corresponding safety net for the urban poor who also include the migrants from rural areas. The pandemic further brought into sharp focus the plight of the migrant labourers. Clearly, there needs to be a specific policy intervention for the urban poor to enable them to get gainfully employed.

There have been attempts at coming up with urban employment schemes in the past. In 1997, there was the SGSRY (Swarna Jayanti Shahri Rozgar Yojna) which consisted of both self-employment and wage employment features. In 2013, NULM (National urban livelihood mission) replaced SGSRY. However, none of these has been an employment guarantee scheme. Many states have come to realise the growing stress on the urban poor plagued by high unemployment rates and impact of high inflation as well as the phenomena of low wage rates and poor quality of informal work. Accordingly, states like Kerala, Odisha, Himachal Pradesh, Madhya Pradesh, Jharkhand and Rajasthan have formulated their urban employment guarantee schemes. This is partly the result of the fact that over the last two decades the Indian economy has been characterised by growth without employment. The level of inequalities in urban areas is much higher than rural areas and this is sufficient justification for a national level urban employment guarantee act.

While the need is clear, the scheme will have to be designed with a lot of thought. It cannot just be an extension of MGNREGA, as unemployment in rural areas is of seasonal nature and the kind of public works that are taken up in rural areas are very different from those which can be viable in urban areas. Besides, the Panchayat at the village level is able to implement the MGNREGA scheme but the current capacity of urban local bodies may not be adequate to handle this kind of scheme. It has been suggested by some experts that at the national level it is possible to fund the scheme from the budget where about 20 million urban workers can get employment for 100 days at Rs 300 per day. The Prime Minister advisory committee has also recommended such a scheme to reduce the level of inequality in the urban sector.

Nature of works to be taken up under urban employment programmes would need to be wider and should focus on improving and maintaining the basic urban infrastructure services. Azim Premji University has suggested a model in which apart from building local infrastructure like roads, lanes or drainage they have added monitoring of environmental quality, strengthening municipal capacity through apprenticeships and providing care for children and elderly. These kinds of works can be taken up by the educated youth for whom the Azim Premji University has suggested that the scheme should guarantee 150 days of employment at a monthly stipend of Rs 13,000. Green jobs like construction and maintenance of public green bodies such as parks, lakes, ponds and other water bodies can also be considered. Monitoring and surveying jobs along with providing administrative assistance to local bodies can be useful for the educated unemployed. Universal slum upgrading is an important activity in urban areas where labor can be provided under this scheme. Some experts have also talked about building infrastructure for the informal economy which could include activities like designing vending zones for street vendors or construction of multipurpose livelihood centers for home-based workers.

Jean Dreze’ has suggested a DUET (decentralised urban employment and training) model where the state could provide financial resources and infrastructure for conducting formal training and skill development programmes to develop the capacity of workers and eventually that of the urban local body. Jean Dreze’ was very much aware of the fact that there was corruption in MGNREGA, particularly in the form of the existence of ghost employees, and to overcome this, he suggested the issuing of job stamps to employers. In urban areas there was a lot of scope for keeping public spaces clean and this could enable jobs for women also. In fact, he advocated that in the urban employment scheme, one-third of the jobs should be reserved for women. He also put forward the concept of worker cooperatives where only those enrolled would be eligible for jobs.

Currently, there is a lot of debate on ‘freebies’ being promised by political parties to attract voters and several economists and leaders have criticised this populism as it leads to draining of the resources of the nation. However, MGNREGA cannot be viewed as a freebie as it is a very important safety net scheme in the interest of the poor. In a similar vein, the urban employment guarantee scheme would help in taking a lot of urban poor out of poverty. Besides, there are tangible economic benefits like boosting local demand, improving quality of urban infrastructure and services, skilling urban youth and increasing the capacity of the urban local body. The urban scheme has to take the urban local bodies into confidence while designing the structure, as they are the implementing agency and success or failure of the scheme would be dependent upon their performance. One could also think of having wages of workers in the urban guarantee scheme decided in a decentralized manner at the level of the urban local body. As regards the availability of resources, it has been estimated that to provide employment to 50 million people, an expenditure of only 1.7 to 2.7 per cent of GDP would be required per year, which can certainly be made available with proper financial planning and expenditure management.

The example of MGNREGA has demonstrated the usefulness of such an employment guarantee scheme. Though there are some allegations of misuse of funds, and often, land owners complain of this scheme leading to a hike in rural wages, the scheme has by and large delivered results. I have personally used MGNREGA in Bundelkhand area of Uttar Pradesh when this region suffered a drought for three consecutive years. The employment provided by the scheme proved to be of immense value to the rural workers. Then again, the pandemic clearly illustrated the value of this scheme as it provided a huge safety net for the migrant labor which returned in large numbers to the villages.

The recent pandemic has highlighted the reality of the urban poor. Eighty-five per cent of the workforce in the urban areas is employed in the unorganised sector where they get least social benefits. There is, thus, an urgent need to design and implement a comprehensive urban employment guarantee scheme at the urban level on the analogy of MGNREGA but with its own distinctive features.

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A structural malaise

Role reversal and inconsistencies in deciding transfers of class-I and class-II officers has created a lucrative transfer industry which derails the process of governance

The corridors of power in UP are all agog with the recent controversy regarding the transfer of officers in various departments. It has snowballed into a politician versus civil servant standoff, and letters have been written which have found their way into the media. There is intense debate all over. The news is that the Chief Minister has set up high-level committees to enquire into the allegations regarding transfers in certain departments. In a democracy, the minister and the secretary have to work in an atmosphere of trust and mutual cooperation to facilitate smooth governance. Whenever there is a conflict between the two, it becomes detrimental to the interests of the government and the citizens whom the departments have been set up to serve. Such controversies are best avoided and it is left to the maturity and experience of both parties to ensure that disagreement, if any, should not find its way into the public forum. It is not as if differences of opinion do not arise but they are best resolved through mutual discussion in the spirit of give and take. In a democracy, the elected minister is the final decision-making authority and the Secretary/Principal Secretary has the freedom to voice his opinion and give advice before the minister ultimately makes his decision. If both the minister and the civil servant have a good understanding with each other then the system works beautifully to the benefit of all, as both carry different perspectives with them, which enrich the functioning of the government. The civil servant has to ensure that work proceeds as per the rule of law and in an impartial and transparent manner. A civil servant brings with him the knowledge about the subject matter under consideration whereas the minister understands the pulse of the people and has better knowledge of the realities at the ground level. A combination of the strengths of both leads to better public service delivery. If both move on the collision course then it is a sure recipe for disaster.

The issue of transfers is perhaps the most contentious one — leading to conflicts and misgivings. Uttar Pradesh, like other state governments, comes out with a transfer policy every year generally during April-May and seeks to transfer officers by the end of June. The policy lays down various parameters on which transfers would take place. For instance, the UP’s transfer policy stated that anybody who has been posted in a particular district for three years or in a division for seven years will need to be posted out. It provided for certain exemptions like giving consideration if the spouse of the officer was also working in government in the same city. UP is a huge state and has a large number of officers and employees. If all those who are eligible under this criterion are transferred then it would lead to a major overhaul which is not good for the administration and will also create a large financial liability for the government. Keeping this in mind, the policy puts a ceiling at 10 or 20 per cent of the total officers in the eligibility zone to be transferred. The problem arises because no criterion is prescribed for selecting these 20 per cent; though common sense would dictate that those who have been serving for a longer period of time should be transferred first. This creates the atmosphere where the transfer industry comes into full play as all officers enjoying good postings use every source or stratagem to remain at their posts — giving rise to allegations of corruption, nepotism and favouritism. Let us take the case of doctors as an example. Doctors, by the very nature of their job, get close to senior officers or politicians and manipulate them to continue staying in cities like Lucknow. Those who have no godfather languish in remote districts and never manage to get posted to big cities. This does not serve the objective of good governance but then this is an unfortunate reality.
It is also a laid down policy that the head of department is authorised to carry out transfers of officers and employees up to the class-II level. He has full powers for the same. Regarding the class-I officers, their transfers are done by the government, which means proposed by the Principal Secretary and approved by the Minister. This system ensures the authority of the head of the department (HOD) and also clearly demarcates the power between the government and him. The HOD has to take work from his team and therefore must be perceived as having this authority. Unfortunately, in reality it does not work in this manner. The transfer lists of all officers and employees are generally prepared at the level of the Minister, and the HOD merely carries out the paper formality of issuing orders. Same is true in the case of class-I officers where the minister indicates to the Principal Secretary his preferences and the file is prepared accordingly for his signature. This creates a situation where the transfers lead to a lot of heart-burning and dissatisfaction and derail the very process of governance. It is a time-honored principle of leadership and management that if you want outcomes and results then you must have the right man for the right job. However, the manner in which the transfer industry operates, this principle is totally sidelined to the detriment of the functioning of the department and the ability of the government to deliver quality public services to the citizens.

I have seen that many Principal Secretaries decide to adopt the path of least resistance and look the other way. They are aware that the HOD is sitting with the Minister and taking orders regarding transfers but choose to accept the reality and not interfere in the matter — fearing that it would lead to unnecessary conflict which would be a huge drain on their time and they would not be able to focus on more important policy issues. Some Principal Secretaries make the mistake of interfering in this process and soon a controversy erupts. Even the higher civil service like the IAS is not immune to the threat of transfers being used as an instrument of making them compliant and ever ready to toe the line. Very often, there is also the issue of proper data not being available which can easily be handled by computerization, and a system of taking preferences from the offices in the eligibility zone can certainly help. Also, the first-in-first-out principle could be made a part of the transfer policy to eliminate discretion. However, the transfer industry will continue as long as it is viewed as being a lucrative one. Good governance needs an institutional mechanism to handle this malaise and there are ways in which this can certainly be done. The important thing for the Ministers is to realize that their job is to frame policies while transfer is a part of policy implementation which should be left to the HOD and Secretary — except in particular cases where their approval is specifically required. The tragedy is that the roles have been reversed, leading to a colorful Principal Secretary making the statement, “I keep on making policies but the Minister does not implement them properly!”

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