Cabinet Approves Nationwide Urban Jobs Guarantee Pilot

NEW DELHI, August 3 — The Union Cabinet on Monday approved a two-year urban employment guarantee pilot covering 100 cities, marking a major expansion of the Centre’s role in providing income support to unemployed and underemployed workers in India’s towns and cities.

Under the newly announced National Urban Employment Guarantee Pilot, eligible urban households will be entitled to demand up to 100 days of paid work in a financial year. The programme will initially focus on municipal maintenance, water conservation, waste management, flood mitigation, care services and the creation of public assets, according to the policy framework released after the Cabinet meeting.

The government said the pilot would begin in selected municipal corporations, councils and nagar panchayats during the current financial year. Cities will be chosen on the basis of unemployment indicators, population, climate vulnerability and the capacity of urban local bodies to plan and supervise projects.

“The scheme creates a demand-based safety net for urban families while strengthening essential civic services,” Union Minister for Labour and Employment Arvind Mehta said at a post-Cabinet media briefing. “It is not intended to replace regular municipal employment or private-sector jobs. Safeguards have been built into the guidelines to prevent substitution.”

The minister said the Centre would disclose the final list of participating cities, wage rates and detailed eligibility rules after consultations with states and Union Territories. He did not announce the programme’s total two-year outlay at the briefing, saying expenditure would depend partly on demand for work and the projects approved by participating cities.

How the guarantee will work

Applicants will have to register as urban households through municipal offices or a dedicated digital portal. Once verified, each household will receive a job card identifying adult members willing to undertake unskilled or semi-skilled public work.

Participating urban local bodies will be required to offer work within 15 days of a valid demand, the policy framework said. If employment is not provided within that period, applicants may become eligible for an unemployment allowance, with the exact formula to be notified separately.

Wages are to be transferred directly to workers’ bank accounts. The Centre said payments should ordinarily be completed within 15 days of attendance certification. Worksites will have to provide drinking water, first-aid facilities and childcare arrangements where the prescribed number of workers with young children is present.

At least one-third of the workers engaged under the pilot must be women. The framework also directs cities to prioritise single women, persons with disabilities who can undertake suitable work, members of Scheduled Castes and Scheduled Tribes, transgender persons, migrant households and residents of notified slums.

A senior official in the Ministry of Housing and Urban Affairs, speaking at the briefing, said states would be asked to ensure that enrolment did not depend solely on smartphone access. “Ward offices and facilitation camps will remain central to registration, grievance redressal and work allocation,” the official said.

Workers would be able to apply both online and in person. The government plans to integrate the portal with existing identity and payment systems, but the guidelines state that eligible applicants should not be denied registration only because of a technical authentication failure.

Projects and funding

The programme will support labour-intensive projects identified through ward-level plans and approved by municipalities. Permitted works include restoring lakes and drains, maintaining parks and footpaths, mapping and repairing water networks, managing material-recovery centres, creating heat shelters, improving public toilets and assisting approved community-care facilities.

Projects that primarily benefit private entities, involve hazardous manual handling or duplicate work already awarded to contractors will not qualify. The policy also prohibits the displacement of permanent, contractual or outsourced municipal workers.

The Centre will bear most of the wage cost during the pilot, while states and urban local bodies will contribute to materials, supervision and unemployment allowance. A differentiated funding formula is expected for north-eastern and Himalayan states, officials said.

Municipalities will have to publish sanctioned projects, muster rolls, wage payments and completion records on a public dashboard. Social audits are to be conducted at least twice a year, with independent state-level units examining worker records and completed assets.

“Urban bodies need predictable funds, but they also need engineers, accountants and field supervisors,” said Kavita Rao, director of a municipal governance research centre in Bengaluru. “The success of the pilot will depend on whether administrative support arrives before applications begin, not several months later.”

Rao said smaller municipalities could struggle to prepare technically sound projects at short notice. She added that ward-level participation would be essential to prevent the programme from becoming a list of low-value tasks rather than a durable urban asset plan.

Why the decision matters

India has long operated a statutory rural employment guarantee through the Mahatma Gandhi National Rural Employment Guarantee Act, but there is no equivalent nationwide entitlement for urban households. Several states have introduced their own urban employment initiatives, providing the Centre with models for registration, project selection and wage payment.

The demand for a national urban safety net intensified after the Covid-19 pandemic exposed the vulnerability of migrant and informal workers. Construction workers, street vendors, domestic workers and employees of small establishments were among those hit by abrupt income losses during lockdowns and subsequent economic disruption.

Urban employment has recovered since then, but labour economists have continued to point to unstable earnings, low female participation and widespread informal work. Seasonal flooding and extreme heat have also increased the need for labour-intensive municipal resilience projects.

“The announcement recognises that urban distress cannot be addressed only through skills programmes and credit schemes,” said Ritu Malhotra, an independent labour economist based in Delhi. “A credible employment guarantee can stabilise household consumption, but wage rates must be adequate and payments cannot be allowed to accumulate.”

Malhotra cautioned that limiting the first phase to 100 cities would leave out many smaller towns where job insecurity and municipal deficits are severe. She said the evaluation should compare outcomes across city sizes before any nationwide expansion.

Employer groups responded more cautiously. A representative of a national small-business federation said the programme could support local demand but urged the government to schedule public works in ways that did not create abrupt labour shortages for micro and small enterprises.

The Labour Minister rejected suggestions that the guarantee would distort urban labour markets. He said the wage-setting method would consider state-level statutory wage floors and prevailing rates while retaining a common national framework.

Immediate impact

The decision is expected to have its earliest impact on low-income urban households that face irregular employment between construction cycles, agricultural migration seasons or periods of weak local demand. Women who are unable to travel far for work could also benefit if cities provide worksites close to their homes and reliable childcare.

Municipalities may gain a larger workforce for tasks that are often delayed because of staff and funding shortages, particularly drain clearance, water-body restoration and heat-action measures. However, civic bodies will face pressure to prevent the scheme from being used for unsafe sanitation work.

The framework explicitly bars manual scavenging and entry into sewers or septic tanks without mechanised systems and statutory safety procedures. Civil society groups said enforcement would require frequent inspection rather than reliance on written prohibitions.

Trade unions broadly welcomed the announcement but demanded that the entitlement eventually be placed under a law. “An executive pilot is a useful beginning, but workers need enforceable rights, timely compensation and an accessible appeals process,” said Suresh Nair, secretary of an urban informal workers’ union in Mumbai.

Opposition-ruled states are expected to scrutinise the funding split and the Centre’s role in selecting cities. State governments will have to sign implementation agreements before municipal bodies can open registration.

What happens next

The ministries of Labour and Employment and Housing and Urban Affairs will issue operational guidelines within 30 days, officials said. States and Union Territories will then nominate cities and submit implementation plans covering staffing, project shelves, registration facilities and grievance systems.

A national steering committee will monitor the rollout, while state-level committees will review expenditure and project quality. The government plans an independent evaluation after the first year, examining employment provided, women’s participation, payment delays, asset quality and the effect on local labour markets.

Registration is expected to open in the first group of cities after implementation agreements are signed and municipal project lists are approved. The government said no applicant should pay a fee to obtain a job card or demand work.

Parliamentary scrutiny is likely when the government presents the required expenditure authorisation and detailed financial statement. Lawmakers are also expected to seek clarity on the unemployment allowance, portability for migrant workers and whether the 100-day entitlement will be shared by all adults in a household or allocated individually.

The Cabinet has asked the two nodal ministries to submit an interim progress report within six months of the first works beginning. Any decision to expand the programme beyond the pilot cities, make it permanent or introduce legislation will be taken after the first-year assessment, the government said.