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EditorialsEditorial: Safety net for urban labour

Editorial: Safety net for urban labour

Published: 18th Aug 2021 12:00 am | Updated: 17th Aug 2021 9:43 pm

One of the ominous implications of the pandemic-induced restrictions on economic activity has been the massive scale of job losses in urban India. In fact, the country has witnessed reverse migration as unemployment has forced workers in urban centres to move back to their native villages. This trend has brought into focus the need for having a safety net for urban workers on the lines of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) which now exists only in rural areas. At present, the daily wage earners in urban areas do not have such a cushion. The MGNREGS, designed to check labour migration, provides a livelihood safety net in rural India. The outbreak of the pandemic and the resultant lockdowns have thrown millions of workers, particularly in the informal sector, out of jobs. According to the Centre for Monitoring Indian Economy, there was a net loss of 7 million jobs between February 2020 and February 2021. Lack of consumption is hitting employment creation. Barring the IT and allied sectors, employment opportunities are shrinking everywhere else. The weak employment outlook hampers India’s chances of reaching double-digit economic growth this year. Many economists and financial bodies have already lowered their projections. Apparently, the Centre’s efforts to boost manufacturing through production-linked incentives or liquidity support to medium and small-scale enterprises have not been effective in stemming the decline of manufacturing in India. As the RBI rightly pointed out in its annual report, released in May, the year 2020 was ravaged by output and employment losses unprecedented in history.

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At the height of the pandemic impact, a big chunk of the workforce from the construction and manufacturing sectors moved to agriculture, resulting in reverse migration. As a result, the share of agriculture in total employment jumped to 39.4% in 2020-21 from 38% in the previous year. More importantly, the share of manufacturing dropped sharply from 9.4% to 7.3%. The migration tragedy and the economic slowdown have highlighted the need for replicating MGNREGS in urban areas to provide a safety net for workers. The Centre and State governments must focus their attention on formulating a scheme to address the employment needs of urban youth. Though the Centre is now implementing the National Urban Livelihoods Mission, focused on self-employment through skill upgradation and credit linkages through banks, it does not guarantee wage employment akin to what the MGNREGS provides. In the wake of economic deceleration, the challenge is to minimise livelihood losses. Given the contemporary realities, the need is to approach this issue from a rural-urban perspective. When there is an economic shock, it is essential to provide people with formal access to a livelihood safety net with comprehensive coverage.


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