Waiting for the 2022 budget: why India needs an urban MGNREGA

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  • The Minister of Finance may announce a similar program such as MGNREGA for the urban population in the Union budget 2022-2023 on 1 February.
  • Last year, in August 2021, a standing parliamentary committee suggested that the Union government put in place a similar scheme.
  • A total of 6.51 million people secured employment under the MGNREGA program in the 2021-22 financial year.

This year’s Union budget, to be announced on February 1 by Finance Minister Nirmala Sitharaman, could drop a bombshell by announcing an urban version of the Mahatama Gandhi National Rural Employment Guarantee Scheme (MGNREGA). This program can help the economy recover from the loss of jobs and income during the COVID-19 pandemic in urban areas of the country.

Last year in August 2021 a Standing Parliamentary Committee suggested that the Union Government should set up a similar scheme like MGNREGA for urban workers as well like what India has for rural job seekers .

Introduced in 2006, MGNREGA is a government employment program, which provides livelihood security by providing at least one hundred days of guaranteed wage employment during each financial year to every rural household whose adult members volunteer to perform unskilled manual work.

BI India/Thrive


The 2021–22 Union budget allocated ₹73,000 crore for MGNREGA, which is an increase of ₹11,500 crore from 2020–21.

A total of 6.51 million people secured employment under this MGNREGA program in the 2021-22 financial year.

Waiting for the 2022 budget: why India needs an urban MGNREGA
BI India/CMIE

“The consequential effects on job loss, rising unemployment, debt, nutrition, health and education for non-unionized workers and their family members have the potential to cast a long shadow and cause irreparable damage,” said Bhartruhari Mahtab, head of the Labor Standing Committee and a member of parliament (MP) from Biju Janata Dal, in a report submitted to parliament. According to Betterplace estimates cited by the Economic Times, around 150 million workers returned from urban cities to their rural villages during the first wave of the COVID-19 pandemic in 2020.

The committee further stated: “The attention of the committee has been drawn to the fact that, unlike employment creation programs in rural areas, the plight of the urban poor has not received much attention. of the government… It is imperative to put in place a guarantee of employment. urban labor program along the lines of MGNREGA”.

Experts believe that an urban jobs program will certainly help overcome such a situation. “We have seen MGNREGA create a huge positive impact on employment and rural infrastructure…there is no urban MGNREGA…can we create [an] urban MGNREGA [like] solution for urban unemployment to be reduced and consumption to start improving,” Nilesh Shah, managing director and CEO of Kotak Mahindra Mutual Fund told Business Insider.

He added, “The creation of the urban MGNREGA is a solution, but the real solution is to create opportunities for people.”

Waiting for the 2022 budget: why India needs an urban MGNREGA
BI India/CMIE

Now the question arises, how is it possible to bring out employment guarantee schemes for urban workers? Responding to this question, Mahesh Vyas, CEO of the Center for Monitoring the Indian Economy (CMIE), pointed out that there is a shortage of manpower in various public places like health centers, schools, security, justice, etc. Under this urban employment program, people can get jobs in these public places, which can surely bridge the gap between supply and demand.

He said: “When we ask, are there enough people in public schools, health centers or enough people in government offices to serve you when you need services?…. The answer will always be no, but in reality there are not enough people to serve us in urban cities. To solve this problem, let’s put in place an urban jobs program to ensure that the government is there when we need it.

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