Context: The article analyses the paradoxical increase of both unemployment and wages in urban India, revealing that despite higher incomes, the urban poor face persistent poverty and inequality, with slum dwellers particularly affected.
It points out that higher wages in casual and self-employment in urban areas do not necessarily lead to economic mobility, calling for more public support to address these disparities.
Key takeaways:
- The India Employment Report (IER) 2024, produced by the Institute for Human Development and the International Labour Organization.
- It highlights the higher unemployment rates in urban settings (4.8%) compared to rural areas (1.5%) in 2000.
- It also notes higher average monthly earnings in urban locales across various employment types in 2022, thus presenting an intriguing case of higher unemployment coexisting with higher wages, necessitating further exploration into its implications for the urban poor.
- Rural-Urban Migration Trends- The report signals a decline in the allure of urban migration for economic reasons, with male migration showing a downturn by 1.2% during 2000-08 and further marginally in 2021. The trend underlines the importance of analysing income and employment trends among slum dwellers to understand urban economic mobility and work quality.
- Kolkata Slum Survey Insights -A study conducted over ten years in Kolkata's slums saw a decline in skilled and semi-skilled labour employment, contrasting with an increase in petty business and small shop employment. Thus, highlighting a shift towards self-employment and casual work amidst varying income dynamics.
- Income Trends in Slums- Income Changes in Slums Income for most slum dwellers has fallen, with notable drops among government employees and shop owners. However, unskilled workers saw their income rise, pointing to a complex situation of earning and employment in slums. These findings suggest a broader economic transformation reflected in the slums.
- Gender Dynamics and Workforce Participation -While the survey noted a decline in women's workforce participation in slums, the IER 2024 reports a modest increase in female workforce participation across urban areas.
- Casual Work and Economic Mobility-There's an increase in casual, insecure jobs, which don't offer good pay or job security. This trend shows that while more people might be working, they're not necessarily in good jobs, impacting the economic stability of the urban poor
Urban poverty
- Urban poverty is a form of poverty quite visible in mega cities characterized by substandard living conditions and income along with deficient provisions of basic amenities and low quality of life. As per NSSO survey reports, there are over 80 million urban poor. It is different from Rural poverty in its characteristics and causes.
The situation of Urban Poverty
- Urban poverty in India is unique. Although the proportion of urban poor has declined over the last decades, there is a steady increase in the number which has a direct impact on the slum areas of the metros.
- In India, “Gareebi Hatao” was made a major objective of the Fifth Five Year Plan (1974-79) when the urban poor got an identity. According to the report of the Ministry of Housing and Urban Poverty Alleviation (2001), about 23.5% of urban households live in slums.
- Although the percentage of slum dwellers had declined to 17% by 2011, the total number of slum households had increased from 10 million in 2001 to 13 million in 2011. The majority of urban poverty occurs in megacities.
- The 2011 Census found that around 12 per cent of the urban population in “Class I” cities lived in slums, with higher rates in the larger cities.
Causes of urban poverty
1) Increasing migration: due to the decrease in opportunities in the rural sector and the continuously decreasing benefits of agriculture.
2) Lack of investment: Lack of investment in basic requirements like skills, education, and health in rural areas of India
3) Loss of income: A person migrating from a rural area does not get a proper salary in cities. Due to this they are forced to work in the unorganized economy and are exploited by the capitalists.
4) Affordable Housing Shortage: The congestion in slum areas increases continuously due to a reduction in affordable housing. This further leads to a lack of facilities like light, water, and sanitation.
5) Informalisation of Labour: urban jobs are often informal, meaning they're not officially recognized, regulated, or protected by the government. These jobs tend to be insecure, without benefits like healthcare or pensions, and contribute to the persistence of poverty.
6) Disproportionate Impact of Inflation: Inflation affects everyone, but the impact on the poor is much greater. As prices go up, those with lower incomes find it harder to afford basic necessities, deepening their poverty.
7) Deprivation of government benefits to Migrants: When people move from rural areas to cities, they often struggle to access government programs and benefits they're entitled to, such as subsidized food or healthcare, exacerbating their poverty in the urban setting.
8) Lack of Access to Community Assets: The difficulty that urban poor have in accessing shared resources that can help improve their lives, like clean water, education, or safe spaces for children to play. Without access to these community assets, it's harder for them to break out of poverty.
State Response to Urban Poor
- One Nation One Ration Card- Department of Food and Public Distribution has launched the ‘Integrated Management of Public Distribution System (IM-PDS)’ for implementation in all States/UT.
Objective
- Introduce nationwide portability of ration card holders under NFSA, 2013 enabling them to lift their entitlement to food grains from any Fair Price Shop of their choice in India with their same ration card.
- The remaining family members who migrate to another location can claim their share of the PDS ration.
- Deendayal Antyodaya Yojana – National Urban Livelihood Mission (DAY-NULM)-launched by the Government in 2013 by restructuring the Swarna Jayanti Shahari Rozgar Yojana (SJSRY).
- Coverage: All district’s headquarter towns (irrespective of population) and all other towns with a population of 1 lakh or more as per Census 2011.
- Target Population: The primary target of NULM is the urban poor, including the urban homeless.
- Funding: Funding will be shared between the Centre and the States in the ratio of 75:25. For North-eastern and Special Category States, this ratio will be 90:10.
- Aim: Reducing the poverty and vulnerability of urban poor households.
PM SVANidhi
- It is a Central Sector Scheme (100% funded by MoHUA). The scheme will be implemented by MoHUA. SIDBI will be the implementation partner of the scheme.
Objectives
The scheme will help formalise the street vendors and will open new opportunities to this sector to move up the economic ladder.
- Facilitate working capital loans up to Rs 10,000
- Incentivise regular payment
- Reward digital transactions
Measures to be Taken to Tackle Urban Poverty
- Formalizing Informal Employment: A substantial step towards integrating urban poor into the economy is the formalization of informal jobs. This includes legal recognition, which would enable access to social security benefits.
- Government Scheme Inclusivity: Expanding the reach of government programs, such as the One Nation One Ration Card Scheme, to cover the migrant urban population ensures no individual is left out due to geographic mobility.
- Urban Job Guarantee Scheme: Implementing a job guarantee program similar to the rural-focused MGNREGA can provide the urban poor with stable employment and income.
- Financial Empowerment: Recognizing the urban poor as a priority group for sector lending would facilitate their access to necessary financial services, empowering them to start businesses and improve their housing and living conditions.
- Skill-Based Data Mapping: Aligning the urban poor's database with their skills can open pathways for suitable employment opportunities. The national migrant database is a crucial initiative to enable this alignment.
- Urban Development- Improved infrastructure is a prerequisite for increased economic growth in India. Poverty can be reduced quickly with rapid urban development.
- Urban Employment Guarantee Programme - It can generate a new set of ‘green jobs’ that can strengthen the capacity of ULBs as well as promote sustainable urban development.