Centre clears nationwide urban jobs guarantee for 100 days of work

NEW DELHI, August 3: The Union Cabinet on Monday approved a nationwide urban employment guarantee that will entitle adult residents of cities and towns to seek up to 100 days of paid work each financial year, marking a major expansion of India’s social-security framework.

Announcing the decision after a Cabinet meeting chaired by Prime Minister Narendra Modi, the government said the proposed National Urban Employment Guarantee Mission would initially cover municipal corporations, municipalities and notified area councils. A Bill to establish the legal entitlement will be introduced in Parliament during the current Monsoon Session, with the first phase scheduled to begin on October 1.

Under the approved framework, eligible residents will be able to register with their urban local body and demand work for projects such as water conservation, drainage improvement, waste segregation, maintenance of public spaces, heat-mitigation works and restoration of community assets. The government said applicants must be offered employment within 15 days or receive an unemployment allowance, subject to conditions set out in the proposed law.

“This is intended to provide a predictable income floor to vulnerable urban households while strengthening civic infrastructure,” a senior official in the Union Ministry of Housing and Urban Affairs said at the post-Cabinet briefing. “The programme will be demand-driven, rights-based and implemented through urban local bodies with transparent digital and physical safeguards.”

Who will be eligible

The scheme will be open to Indian citizens aged 18 and above who ordinarily reside within the jurisdiction of an eligible urban local body. A household may register multiple adult members, but its combined entitlement will be capped at 100 days in a financial year during the initial phase, according to the framework released by the ministry.

Applicants will be issued urban employment cards after identity and residence verification. The government said offline registration counters would be mandatory at ward offices and designated civic centres so that people without smartphones or reliable internet access are not excluded.

At least one-third of work opportunities will be reserved for women, while priority will be given to persons with disabilities, single women, members of Scheduled Castes and Scheduled Tribes, and workers from households without a regular salaried member. Work sites will have to provide drinking water, first-aid facilities, shade and childcare arrangements where the prescribed number of workers with young children is present.

Wages will be linked to the notified rate applicable to rural employment-guarantee work in each state, with states permitted to announce a higher urban rate from their own resources. Payments are to be transferred directly to workers’ bank accounts within 15 days of completion of the muster-roll cycle. Delayed payments will attract compensation, the ministry said.

Funding and rollout

The Centre will bear 75% of wage and material expenditure in general-category states and 90% in the north-eastern and Himalayan states, according to the approved financing formula. Union Territories without legislatures will receive full central support. States and urban local bodies will share the remaining cost, including the unemployment allowance.

The Union government has approved an initial outlay of Rs 48,000 crore for the first full year of operation, the official said. Detailed city-wise allocations will be based on population, unemployment indicators, informal-sector concentration and climate vulnerability, while retaining a demand-based contingency fund.

The first phase will cover all million-plus cities, state capitals and 500 other urban centres selected in consultation with state governments. Remaining municipalities are expected to join in stages over the following 18 months. The ministry will publish operational guidelines within four weeks and open a registration portal in September.

Municipal bodies will be required to prepare annual labour budgets and shelf-ready lists of works after consultations at ward level. Contractors and labour-displacing machinery will be prohibited for projects sanctioned under the programme, except in limited cases involving safety or specialised engineering.

A Union Finance Ministry official said the expenditure had been factored into the government’s medium-term fiscal planning. “The initial allocation is manageable within the existing expenditure framework, but implementation quality and the pattern of demand will be reviewed before the next Budget,” the official said.

Why the decision matters

India has had a statutory rural employment guarantee since 2006, but no equivalent national entitlement for urban workers. Several states, including Kerala, Odisha, Rajasthan, Jharkhand and Himachal Pradesh, have operated urban employment initiatives of varying scale, creating a policy base for the new central programme.

Demand for a nationwide scheme grew after the Covid-19 pandemic exposed the vulnerability of migrant workers, street vendors, construction labourers and other people dependent on irregular urban employment. Economists and labour organisations have also argued that extreme heat, flooding and periodic economic slowdowns increasingly disrupt daily-wage work in cities.

The latest decision could provide a buffer for households facing temporary job loss while supplying municipalities with labour for climate adaptation and maintenance. Urban local bodies frequently struggle to fund labour-intensive civic works even when projects do not require complex construction.

Dr Meera Nair, a labour economist at a Delhi-based public policy institute, said the guarantee’s effectiveness would depend on whether it remained genuinely demand-driven. “If workers can apply easily, receive work on time and secure prompt wage payments, this could become an important stabiliser for urban consumption,” she said. “If budgets are capped or municipalities lack project-planning capacity, the legal promise will not translate into reliable employment.”

Industry representatives said the programme could support consumption but urged the government to avoid distorting local labour markets. Rajiv Bansal, chairperson of a national small-enterprise employment committee, said wage rates should be reviewed regularly and work calendars coordinated with seasonal demand in construction, logistics and manufacturing.

Safeguards and concerns

The programme will use geo-tagged assets, publicly accessible muster rolls and social audits to monitor expenditure. Every urban local body must establish a grievance officer, while states will appoint independent ombudsmen with powers to order corrective action and recommend penalties.

The government said biometric authentication would not be the sole basis for denying registration, attendance or payment. Alternative verification methods must be available where connectivity, disability or authentication failures create difficulties. This provision follows repeated concerns from welfare groups over technology-linked exclusion in public programmes.

Trade unions welcomed the principle of a legal guarantee but said 100 days per household may be inadequate in cities where informal employment is highly volatile. Kavita Rao, national secretary of a federation of unorganised workers, called for an individual entitlement, a higher minimum wage and protection against the substitution of regular municipal jobs.

“Employment-guarantee workers must create additional public value; they should not be used to replace sanitation workers, gardeners or other employees who should hold permanent posts,” Rao said. She also sought portable registration for migrant workers who move between cities.

Opposition-ruled states are expected to scrutinise the cost-sharing arrangement and the requirement to pay unemployment allowance. A municipal commissioner from a large western Indian city, who requested anonymity because the detailed guidelines have not been issued, said civic bodies would need additional engineers, programme officers and accountants to identify works and process payments at the required scale.

Impact on workers and cities

For urban workers, the immediate benefit will be access to a formal channel for seeking short-term employment rather than relying entirely on labour markets and contractors. The scheme may particularly help households during the monsoon, heatwaves or periods when construction activity slows.

The work list is expected to focus on projects with visible local impact, including revival of ponds, cleaning of storm-water drains, maintenance of footpaths, creation of shaded public areas, tree care, material-recovery facilities and mapping of vulnerable settlements. Skilled and semi-skilled tasks may be included, with separate wage categories to be specified in the rules.

The government has directed states not to use the programme for hazardous sewer or septic-tank cleaning. Such work must continue to be mechanised and carried out under existing safety laws and rehabilitation measures.

Women’s participation will be closely watched. State-level urban schemes have shown that work near home, predictable hours and childcare can raise female participation, but irregular project availability and delayed wages can quickly reduce enrolment.

What happens next

The Housing and Urban Affairs Ministry will circulate the draft Bill to MPs before it is introduced in the Lok Sabha. Parliamentary scrutiny is likely to focus on fiscal obligations, the definition of ordinary residence, unemployment allowance, wage determination and the division of responsibility among the Centre, states and municipal bodies.

States have been asked to nominate nodal departments within two weeks and submit preliminary lists of participating cities and projects by August 31. Training for municipal officials and ward-level facilitators is expected to begin in September.

If Parliament passes the legislation during the Monsoon Session, registrations will open ahead of the October rollout. The Centre plans quarterly reviews during the first year, followed by an independent evaluation covering wage payments, women’s participation, asset quality and exclusion errors.

For the policy to deliver on Monday’s announcement, the key tests will be whether municipalities can prepare useful work quickly, whether funds arrive before demand builds and whether workers receive wages without delay. The scale of early registrations will offer the first indication of how much unmet demand for public employment exists across urban India.