Cabinet approves nationwide urban jobs guarantee pilot in 25 cities

NEW DELHI: The Union Cabinet on Tuesday approved a two-year urban employment guarantee pilot covering 25 cities, promising up to 100 days of paid work in a financial year to eligible households as the Centre tests a national safety net for informal workers facing seasonal job losses and income shocks.

Key points

- The pilot will cover 25 cities across states and Union Territories over two financial years.

- Eligible urban households will be able to seek up to 100 days of work annually, subject to local project availability.

- The Centre has approved an initial outlay of ₹12,000 crore, with participating states and urban local bodies sharing part of the cost.

- Proposed work includes water conservation, heat mitigation, flood preparedness, waste management and maintenance of public assets.

- Applications, attendance and wage payments will be recorded on a digital platform, with an offline option at municipal facilitation centres.

Announcing the decision after the Cabinet meeting, the government said detailed operational guidelines, the final list of participating cities and the wage schedule would be issued separately.

The scheme will begin as a pilot rather than as an immediate nationwide legal entitlement, allowing the Centre and states to assess demand, financing requirements and the capacity of municipal bodies to provide useful work at scale.

“The programme is intended to provide a predictable employment cushion to vulnerable urban households while strengthening essential civic assets,” said the Union minister who briefed reporters on the Cabinet decision. “The pilot will focus on measurable public works and transparent, time-bound wage payments.”

According to the Cabinet note released after the meeting, the approved central outlay is ₹12,000 crore for two years.

The cost-sharing formula will vary by category of state and Union Territory, while municipal bodies will be expected to prepare annual labour budgets and shelf-ready lists of projects before enrolment begins.

The government has not yet published city-wise allocations or an estimate of how many workers will receive employment.

Officials said these figures would depend on the final selection of cities, household registration and the number of work demands accepted by local authorities.

Under the proposed framework, one adult member of an eligible household will be able to register through a municipal portal or at a ward-level help centre.

Authorities will verify identity, local residence and household eligibility before issuing an urban job card.

The government said the final guidelines would define eligibility and documentation, including safeguards for homeless residents, migrants, tenants and people without conventional proof of address.

A senior official in the Ministry of Housing and Urban Affairs said participating cities would have to offer work close to the applicant’s ward wherever feasible. “The objective is not to create a parallel municipal workforce or replace sanctioned posts,” the official said. “Projects will have to be additional, labour-intensive and linked to clear public outcomes.”

The initial list of permissible works includes restoration of ponds and drains, rainwater harvesting, maintenance of footpaths and community facilities, creation of shade structures, tree-pit care, mapping of vulnerable settlements, segregation support at material recovery facilities and pre-monsoon flood mitigation.

Hazardous sanitation work and tasks requiring specialised certification will be excluded.

Officials said at least a portion of projects would be reserved for climate-resilience measures.

Cities facing severe summer temperatures could deploy workers for upkeep of cooling shelters, drinking-water points and shaded public spaces, while flood-prone municipalities could prioritise drain mapping, removal of non-hazardous obstructions and maintenance of rainwater channels.

Wages will be transferred directly to verified bank accounts.

The Cabinet note says attendance will be recorded through a digital muster system, backed by physical registers and manual exception procedures where connectivity or biometric verification fails.

The Centre has also proposed public dashboards showing registrations, work demanded, days provided, expenditure and payment delays.

The final wage rate has not been notified.

Officials indicated that it would be linked to state-level wage benchmarks and would not be lower than the applicable statutory floor for unskilled work.

The government is also considering separate rates for semi-skilled assignments, although that provision remains subject to the guidelines.

A municipal commissioner from one of the cities being considered for the pilot said urban bodies would need funds and technical support before accepting large numbers of applications. “The success of the scheme will depend on whether projects are planned in advance, supervisors are available and payments move without delay,” the commissioner said. “Municipalities cannot be asked to improvise after demand is registered.”

The government said participating cities would establish grievance officers and time limits for resolving disputes over registration, attendance and wages.

Social audits will be mandatory at fixed intervals, while state-level monitoring committees will examine completion reports and complaints of ghost workers, duplicate job cards or substitution of regular staff.

Background

India’s principal statutory employment guarantee, the Mahatma Gandhi National Rural Employment Guarantee Act, applies to rural households and provides up to 100 days of wage employment in a financial year on demand, subject to the provisions of the law.

It has long served as a major fallback during agricultural lean seasons, droughts and wider economic disruption.

Urban India has no equivalent nationwide employment guarantee.

Several states have introduced or tested their own urban job programmes, generally through municipalities and with a focus on low-income residents, women or workers who lost livelihoods during the Covid-19 pandemic.

Economists, labour unions and urban-policy groups have repeatedly called for a broader framework as informal employment expands in cities.

The case for an urban safety net gained urgency after the pandemic exposed the vulnerability of migrant and informal workers.

Many urban households depend on daily earnings from construction, vending, domestic work, transport, small workshops and service-sector jobs.

Their income can fall sharply during extreme heat, heavy rain, economic slowdowns or public-health emergencies.

The government has so far been cautious about a universal urban guarantee, citing the complexity of identifying eligible households, high wage differences between cities and the limited administrative capacity of many urban local bodies.

The newly approved pilot seeks to test those issues before any decision on wider expansion or legislation.

Official labour-force surveys have consistently shown that a large share of India’s workforce is self-employed or engaged in casual and informal work.

However, the Cabinet announcement did not provide a fresh nationwide estimate of potential urban demand.

Independent researchers have warned that demand could be substantially higher than municipal projections in poorer wards and among migrant households.

What it means

For workers, the decision could create a formal route to seek short-term public employment during periods when private work is scarce.

Its immediate reach, however, will be limited to the selected cities, and the promise of up to 100 days does not necessarily mean every registered household will receive the full quota.

The distinction between a pilot and a legal guarantee is important.

Unless the final rules create enforceable timelines and compensation for failure to provide work, applicants may not have the same statutory protections available under the rural employment law.

The government has said accountability provisions will be included, but it has not confirmed whether unemployment allowance will be payable when work is not offered.

For cities, the scheme could provide labour for maintenance tasks that are often neglected despite their importance.

Cleaning and restoring water channels before the monsoon, maintaining public shade, caring for newly planted trees and improving waste segregation can produce visible benefits if projects are properly designed and supervised.

The programme also poses fiscal and administrative risks.

A ₹12,000-crore envelope may be sufficient for a limited pilot, but costs could rise rapidly if enrolment and demand are high.

Delayed releases from the Centre or states could lead to wage arrears, while weak planning could result in low-value projects or work being opened merely to meet numerical targets.

Women’s participation will be a key measure of performance.

Officials said the guidelines would encourage work sites near homes, crèche arrangements where worker numbers justify them, safe drinking water, first-aid facilities and flexible shifts.

Women workers’ groups have argued that care responsibilities and unsafe travel often prevent women from accessing urban public works.

Reactions

Labour organisations broadly welcomed the announcement but urged the Centre to turn the programme into a rights-based guarantee.

A national secretary of a federation of informal workers said the pilot should include migrant workers and homeless people from the outset. “Residence documents must not become a barrier for people who build and run cities but do not have formal tenancy papers,” the office-bearer said.

An urban economist at a public-policy research institute described the decision as “a significant shift in social-protection policy”, while cautioning that the wage level would determine whether the scheme provided meaningful income support. “If wages are set too low, workers will enrol only in severe distress; if they are aligned with local conditions, the programme can stabilise consumption and improve worker bargaining power,” the economist said.

An association representing municipal officials said it supported the climate-resilience focus but called for dedicated funding for engineers, work-site supervisors, safety equipment and audit staff.

It also sought clarity on liability in case of workplace injuries and on whether administrative costs would be reimbursed separately.

Opposition parties welcomed the principle of urban employment support while questioning why the decision had been limited to a pilot.

Government representatives countered that phased implementation was necessary to avoid payment failures and ensure that city administrations had viable projects ready before workers registered.

Industry groups were more guarded.

A representative of a small-business association said the scheme should not disrupt local labour markets during peak commercial periods.

Labour economists noted, however, that a well-designed public programme can establish a wage floor without causing broad shortages, particularly if work is opened during seasonal downturns.

What happens next

The Ministry of Housing and Urban Affairs is expected to issue draft operational guidelines and invite states and Union Territories to nominate cities.

Selection will consider poverty levels, climate vulnerability, municipal capacity, geographic spread and the availability of projects that can start quickly.

Participating states will then sign implementation agreements, approve city-level labour budgets and designate nodal agencies.

Municipal bodies will map potential workers, identify works, create grievance systems and open facilitation centres before registration begins.

The first phase is expected to start after the guidelines and city list are notified.

Officials said the rollout would be staggered rather than simultaneous, with early cities used to test the registration platform, payment system and social-audit process.

The Centre will review the pilot after its first year using indicators including demand for work, average days of employment, women’s participation, payment delays, completion and quality of assets, inclusion of migrants and administrative cost.

A final evaluation at the end of two years will guide any decision to expand the programme, revise its financing or place an urban employment guarantee before Parliament.