Union Cabinet clears nationwide urban jobs guarantee pilot

NEW DELHI, September 1: The Union Cabinet on Tuesday approved a nationwide pilot for an urban employment guarantee, marking a major expansion of India’s social-security framework by offering eligible adults in 25 cities up to 100 days of paid public work a year.

The government said the three-year pilot would focus on climate resilience, upkeep of civic assets and care-linked community services before a decision on wider implementation.

Key points

- The three-year pilot will cover 25 cities selected across states and Union Territories.

- Eligible urban adults will be able to seek up to 100 days of paid work in a financial year.

- Work will include water conservation, heat mitigation, waste management and maintenance of public assets.

- Wages will be transferred directly to workers’ bank accounts, with attendance and payments tracked digitally.

- Detailed city-wise allocations, wage rates and enrolment rules are to be issued separately.

Announcing the decision after a Cabinet meeting, the government said the programme was intended to create a predictable employment safety net for low-income urban households while helping municipal bodies address labour-intensive civic needs.

Under the approved framework, participating cities will open registration to adult residents from eligible households.

Applicants will be issued a digital job card after identity and residence checks, and urban local bodies will be responsible for assigning work, recording attendance and processing wage payments.

A senior official in the Ministry of Housing and Urban Affairs said the pilot had been designed around the distinctive nature of urban unemployment, where work is often informal, seasonal and scattered across multiple occupations.

“The objective is not to replace regular municipal jobs or private employment.

It is to provide a temporary, demand-based cushion during periods of job loss or underemployment, while creating and maintaining useful public assets,” the official said.

The official added that the Centre would release operational guidelines covering eligibility, permissible works, social audits, grievance redress and the sharing of costs with states.

The final list of participating cities will also be notified through those guidelines.

The scheme will prioritise projects that can be taken up quickly and completed with limited material expenditure.

These may include restoring lakes and drains, planting and maintaining urban forests, improving pedestrian spaces, supporting waste segregation, preparing neighbourhoods for extreme heat and repairing community facilities.

The government said women would receive priority in work allocation, and participating cities would be encouraged to provide crèche support at larger work sites.

Provisions are also expected for persons with disabilities and older workers who can undertake less physically demanding assignments.

According to the official announcement, wages will be linked to rates notified for the pilot and paid through direct benefit transfer.

Urban local bodies will have to maintain electronic muster rolls, publish sanctioned works and display expenditure information on a public dashboard.

The Centre said technology would be used to reduce delays and duplication, but applicants without smartphones would be able to register through municipal help desks and designated public-service centres.

Alternative attendance arrangements are to be provided where biometric or mobile-based systems fail.

A secretary-rank official involved in the policy process said safeguards were being built in to prevent the programme from becoming entirely supply-driven.

“Cities cannot simply prepare a list of works and assume that employment has been provided.

The system must record a worker’s demand, issue a dated acknowledgement and track whether work was offered within the prescribed period,” the official said.

The government did not immediately publish a consolidated expenditure estimate for the full three-year period.

It said annual allocations would be linked to approved city labour budgets, actual demand and performance against transparency benchmarks.

Official labour-market data have repeatedly shown a sharper difference between rural and urban employment patterns.

The Periodic Labour Force Survey has recorded that urban workers are more concentrated in regular salaried work and casual service-sector employment, while a large section remains dependent on informal arrangements without written contracts or assured social security.

The urban unemployment rate under the current weekly status measure was 6.7 per cent for people aged 15 years and above in April-June 2024, according to the National Statistical Office’s quarterly urban bulletin.

The rate was higher for women than for men, underlining the difficulties many women face in securing and retaining paid work in cities.

The pilot is expected to involve municipal corporations, state urban-development departments and the Centre.

City administrations will prepare annual labour budgets and shelf-ready projects, while state-level units will supervise implementation and handle appeals.

The Centre will monitor common standards and release its share of funds in instalments.

Municipal bodies will not be permitted to use workers under the scheme to displace existing employees, fill sanctioned permanent posts or carry out hazardous tasks without required training and safety equipment, officials said.

Contractors are also expected to be barred from controlling worker selection or wage payments.

An urban-development department commissioner from a large state, speaking after the announcement, said implementation capacity would determine whether the guarantee worked as intended.

“Municipalities can identify useful work, but they will need engineers, programme officers, work-site supervisors and reliable payment systems.

Administrative funding and training must arrive before enrolment opens,” the commissioner said.

Background

India’s principal statutory employment guarantee has so far been rural.

The Mahatma Gandhi National Rural Employment Guarantee Act, enacted in 2005, entitles every rural household whose adult members volunteer for unskilled manual work to demand up to 100 days of wage employment in a financial year.

The rural programme has become one of the country’s largest social-protection measures, particularly during droughts, periods of farm distress and the Covid-19 pandemic.

However, it does not cover people residing in urban areas, even when their incomes are equally vulnerable to layoffs, illness, migration shocks or seasonal downturns.

Several states have experimented with urban employment initiatives of their own.

Kerala’s Ayyankali Urban Employment Guarantee Scheme has operated through urban local bodies, while Odisha, Rajasthan, Himachal Pradesh and Jharkhand have announced or implemented programmes with differing eligibility rules and work categories.

Policy discussions around a national urban jobs programme intensified after the 2020 lockdown exposed the insecurity faced by migrant workers, street vendors, domestic workers, construction labourers and workers in small establishments.

Parliamentary committees, researchers and civil-society groups subsequently proposed models ranging from a statutory employment guarantee to a targeted programme for smaller cities.

The Cabinet’s decision stops short of immediately creating a permanent legal entitlement for all urban residents.

By beginning with 25 cities, the Centre can test worker demand, municipal preparedness, fiscal costs, wage-setting and the quality of assets created before deciding whether to seek legislation or expand the programme administratively.

What it means

For eligible households, the policy could provide a fallback source of income when informal work dries up.

Its effect will depend on the notified wage, how quickly work is offered and whether payments reach workers on time.

The design could also change the way cities prepare for floods, heatwaves and water shortages.

Labour-intensive tasks such as drain clearance, pond restoration, shade creation and neighbourhood mapping are often delayed because municipal bodies lack dedicated field staff or flexible budgets.

Economists say an employment guarantee can support consumption at the bottom of the income distribution, where additional earnings are likely to be spent quickly on food, rent, transport and other essentials.

At the same time, a poorly designed scheme could produce low-value work, duplicate municipal functions or impose reporting requirements that smaller cities are unable to meet.

The 100-day ceiling is an upper limit, not an assurance that every registered applicant will automatically receive 100 days of work.

The strength of the policy will rest on the demand process, the time allowed to provide employment, and any compensation payable when authorities fail to offer work.

Questions also remain over portability.

Many low-income workers move between cities or retain documents linked to their home districts.

Unless the guidelines accept flexible proof of urban residence, recent migrants may struggle to enrol despite being among the groups most exposed to unstable employment.

Reactions

A national federation of municipal workers welcomed the additional investment but urged the government to protect regular employment.

Its general secretary said in a statement that guarantee workers must not be used against vacancies for sanitation workers, gardeners, drivers, maintenance staff or other permanent civic posts.

A representative of an urban informal-workers’ network called the decision “an important first step”, but said the wage should not fall below the applicable state minimum wage.

The network also sought offline registration, work sites close to applicants’ homes, compensation for delayed payments and independent social audits.

An industry association’s labour-policy director said the programme could stabilise demand during economic slowdowns but cautioned that wage rates should be calibrated carefully. “The scheme should act as a safety net and create public value without worsening shortages in local labour markets during peak construction and manufacturing periods,” the director said.

Opposition parties said they would examine the guidelines before taking a final position.

A spokesperson for a major opposition party welcomed the recognition of urban job insecurity but questioned why the government had opted for a limited pilot instead of a rights-based national law.

Leaders from two regional parties demanded transparent criteria for selecting cities and a larger financial contribution from the Centre.

Public-finance specialists also flagged the need for credible cost disclosure.

One labour economist at a Delhi-based policy institute said the pilot should publish monthly information on applications, work offered, person-days generated, average wages, payment delays and participation by women and marginalised communities.

What happens next

The Ministry of Housing and Urban Affairs is expected to issue detailed operational guidelines and the list of 25 cities in the coming weeks.

States included in the pilot will then sign implementation agreements, designate nodal agencies and submit city labour budgets for approval.

Municipal bodies will have to identify projects, arrange work-site supervision, establish registration centres and create grievance-redress mechanisms before applications open.

The government said an initial preparatory phase would include training, baseline surveys and audits of proposed works.

The first wage payments will be a key test of the programme’s digital and administrative systems.

Independent evaluations are planned at the end of the first and second years, with a broader review before the pilot expires.

That review will examine employment demand, fiscal cost, women’s participation, payment timeliness, asset quality and whether the scheme helped cities respond to climate and public-health risks.

On the basis of those findings, the Cabinet may expand the programme, alter its design or consider a statutory urban employment guarantee.