Cabinet clears nationwide urban jobs guarantee pilot in 100 cities

NEW DELHI, September 1: The Union Cabinet on Tuesday approved a two-year urban employment guarantee pilot covering 100 cities, marking the Centre’s biggest direct intervention yet to address precarious work and income insecurity among India’s urban poor.

Under the new National Urban Employment Guarantee Pilot, eligible households will be entitled to demand up to 100 days of paid work in a financial year, according to the government’s announcement.

Key points

- The two-year pilot will cover 100 cities selected through population, unemployment and vulnerability indicators.

- Eligible urban households may demand up to 100 days of work annually, with unemployment allowance provisions if work is not offered on time.

- At least 50% of work placements will be reserved for women, the government said.

- Projects will focus on climate resilience, public services, care work, waste management and maintenance of civic assets.

- A digital job card and attendance system will be used, with an offline route promised for people facing connectivity or documentation barriers.

Announcing the decision after the Cabinet meeting, Union Information and Broadcasting Minister Anurag Verma said the scheme was designed as a demand-driven safety net rather than a conventional short-term public works programme.

“This pilot recognises that urban livelihoods are frequently informal, unstable and exposed to economic or climate-related shocks,” Verma said at a media briefing. “Its purpose is to provide dignified paid work while helping urban local bodies improve essential services and maintain public assets.”

The government said the Cabinet had approved an initial central outlay of ₹18,500 crore for the two-year pilot.

Participating states and Union Territories will share part of the cost, while the Centre will fund the bulk of wage expenditure and the digital employment platform.

Detailed cost-sharing rules will be set out in operational guidelines expected later this month.

The final list of participating cities was not released immediately.

Officials said selection would seek regional balance and include municipal corporations, medium-sized cities and smaller urban centres.

Cities with high concentrations of informal workers, migrant households and climate vulnerability will receive priority.

A senior official in the Ministry of Housing and Urban Affairs, who briefed reporters after the announcement, said the government expected enrolment to begin in the first set of cities within the current financial year.

The official requested anonymity because the detailed guidelines had not yet been notified.

“States will identify implementing urban local bodies and submit shelf-ready works,” the official said. “No household should be excluded merely because its members are migrants or tenants, provided they meet the eligibility rules and can establish ordinary residence in the city through one of the permitted documents.”

The government has not yet published the income threshold or full eligibility framework.

Officials indicated that priority categories would include casual workers, street vendors, construction labourers, domestic workers, sanitation workers and households whose principal earners had suffered a sudden loss of livelihood.

Each enrolled household will receive a digital urban job card, and adult members will be able to file a demand for work at municipal facilitation centres or through a mobile and web platform.

The announcement said work should ordinarily be assigned within 15 days of a valid demand.

A graded unemployment allowance is proposed where a participating authority fails to offer work within the stipulated period, though the exact amount remains to be notified.

Wages will be transferred directly to workers’ bank accounts.

Officials said rates would be linked to notified state-level wages for comparable unskilled and semi-skilled work, with safeguards against payment below the applicable statutory minimum.

Wage payments are proposed within 15 days of verified attendance.

The Centre said no contractor or labour-supplying intermediary would be permitted in works undertaken through the programme.

Attendance will be recorded digitally, but municipalities must maintain a manual fallback mechanism.

Social audits, public disclosure of work lists and a three-tier grievance system have also been promised.

The 50% placement floor for women is a central feature of the pilot.

Municipalities may provide crèches at larger worksites and schedule shorter shifts for certain care and community-service assignments.

The government said equal wages would apply for equal work and that local bodies would be required to establish safeguards against workplace harassment.

The approved categories of work include rejuvenation of water bodies, flood-channel clearance, urban forestry, heat-mitigation measures, maintenance of public toilets, solid-waste segregation, repair of footpaths and community facilities, and support services at municipal health and care centres.

Skilled workers may be deployed for asset mapping, basic repairs and disaster-preparedness tasks after certification.

Urban local bodies will be expected to identify projects that do not displace regular municipal employees.

The announcement also says participating cities must prevent the substitution of permanent or sanctioned posts with temporary workers engaged under the scheme.

That condition could prove crucial.

Municipal unions have previously argued that short-term workers should not be used to mask persistent vacancies in sanitation, engineering, public health and administrative wings.

Official urban labour data have repeatedly highlighted the scale of informal and insecure employment.

The Periodic Labour Force Survey has shown that self-employment and casual labour account for a substantial share of work, while women’s participation and earnings vary sharply by location and household circumstances.

Labour economists have also cautioned that headline unemployment figures do not fully capture underemployment, irregular hours or sudden income loss among informal workers.

The Centre said the pilot would generate a unified database on demand for public employment in cities.

However, it insisted that information collected for job allocation would be subject to purpose limits, access controls and applicable data-protection law.

Background

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

It does not cover households residing in urban areas.

The absence of a comparable national urban guarantee became a prominent policy issue during and after the Covid-19 pandemic, when widespread business closures and reverse migration exposed the limited protection available to informal workers in cities.

Several economists, state governments and civil-society groups subsequently called for a national urban employment programme.

Some states have introduced their own urban work schemes, offering the Centre operational examples involving ward-level registration, municipal works and direct wage transfers.

Results have varied because of fiscal constraints, weak staffing and difficulties in maintaining a continuous pipeline of suitable projects.

The new programme remains a pilot and is not backed by a national employment-guarantee law.

The distinction means that enforceability will depend heavily on the final guidelines, budget releases and grievance mechanisms.

The Cabinet announcement refers to an entitlement within participating cities, but the government has not clarified whether a worker could seek judicial enforcement of delayed work or unpaid allowances.

What it means

For low-income urban households, the measure could create a temporary income floor during construction slowdowns, extreme-weather events or seasonal declines in work.

The focus on demand-based employment may also help workers who are employed intermittently but are not counted as continuously unemployed.

The policy could give municipalities an additional labour force for maintenance and climate-adaptation projects that are often neglected in capital-heavy urban budgets.

Cleaning drains before the monsoon, restoring ponds, expanding shade cover and maintaining public facilities can produce visible civic benefits if projects are technically planned and closely supervised.

The programme also presents significant implementation risks.

Cities generally have fewer community-level institutions for public works than rural administrations, and many municipal bodies face shortages of engineers, accountants and field supervisors.

Weak work measurement, delayed wage transfers or excessive reliance on digital verification could quickly undermine trust.

Mobility is another challenge.

Millions of urban workers change neighbourhoods or cities for employment and may not possess conventional proof of local residence.

The promised flexible documentation route will therefore be decisive.

Worker groups have urged the government to allow self-declarations supported by ration cards, rental records, vendor certificates or verification by recognised local bodies.

Fiscal continuity will matter as much as design.

If the number of valid work demands exceeds budget assumptions, the Centre and states will have to decide whether to release supplementary funds or ration employment.

A genuinely demand-driven programme cannot function if registrations remain open but works are capped administratively.

Reactions

Opposition parties broadly welcomed the recognition of urban job insecurity but questioned why the scheme was limited to a pilot.

Congress labour spokesperson Meera Nair said Parliament should examine a rights-based national law rather than leave benefits dependent on annual executive guidelines.

“The announcement is an overdue acknowledgement that urban workers need protection,” Nair said. “The test will be whether every valid demand receives work, wages arrive on time and the unemployment allowance is actually paid.”

Rakesh Yadav, national secretary of the Federation of Municipal Workers’ Unions, said the prohibition on replacing regular jobs was essential. “Municipalities must first fill sanctioned vacancies,” he said. “Public employment can supplement civic services, but it cannot become a route to casualise permanent sanitation and maintenance work.”

Dr Kavita Menon, a labour economist at the Institute for Employment Studies, described the women’s placement floor and inclusion of care services as significant.

She cautioned that participation would depend on safe worksites, predictable hours, nearby assignments and functioning childcare.

The Confederation of Urban Employers said the scheme could support household consumption during downturns but asked the government to avoid diverting workers from small businesses during peak seasons.

Its policy director, Arvind Rao, called for local labour-market reviews and training links that could help participants move into more stable employment.

Urban rights groups welcomed the proposed offline registration channel but sought explicit protection for homeless people and migrants.

They also demanded that biometric failures should never be grounds for denying work or withholding wages.

What happens next

The Ministry of Housing and Urban Affairs will issue operational guidelines, eligibility rules and the list of 100 cities.

States and Union Territories must then nominate nodal departments, sign funding arrangements and direct participating municipalities to prepare ward-wise labour budgets and project lists.

Municipal bodies will establish registration centres, appoint grievance officers and identify worksite supervisors before enrolment begins.

The Centre is also expected to publish wage schedules, unemployment-allowance rates, audit standards and rules governing the digital platform.

The first phase is likely to focus on cities that already have employment-scheme infrastructure or ready municipal projects.

A mid-term review after the first year will assess work demand, women’s participation, payment delays, asset quality and fiscal requirements.

The Cabinet has left open the possibility of extending the scheme beyond 100 cities after evaluation.

Whether the pilot becomes a permanent nationwide guarantee will depend on implementation, state participation and the government’s willingness to provide sustained funding once actual demand becomes clear.