For urban Indians, job guarantee trumps cash handouts

Amid uncertainty over jobs, mostly due to the impact of coronavirus pandemic, urban Indians are left with no taste for government cash transfers. They instead want job guarantee. A study by the London School of Economics found that a majority of urban Indians who were left with no jobs because of COVID-19 want the government to guarantee them jobs like it does for people in rural areas. 

The LSE study titled ‘City of dreams no more, a year on: worklessness and active labour market policies in urban India’ stated that as many as 82 per cent of respondents favoured job guarantees, while 16 per cent preferred cash transfers. Even the ones who received cash handouts in the wake of the pandemic preferred job protection over financial assistance.

The government, under the Mahatma Gandhi National Rural Employment Guarantee Act or MGNREGA, guarantees at least 100 days of employment in a financial year to every household in rural areas. As COVID-19 dealt its blow, the government increased the budget for the scheme and reported a 50 per cent increase in enrolment.

However, the study stated that 40 per cent of the workers who were contacted had no work or pay, even after 10 months from the first wave lockdown period.

Authors Swati Dhingra and Fjolla Kondirolli said, “Younger individuals, in the bottom half of pre-Covid earnings, experienced higher levels of worklessness.” The authors recorded responses from 4,763 individuals from Bihar, Jharkhand and Uttar Pradesh between January and March this year.

Unlike last year when there was a nationwide lockdown, the government allowed localised lockdowns amid the second wave. Nevertheless, the study found that urban individuals have been unemployed for the last six months on an average, while the share of employed individuals with a full year’s work has halved since the previous year.

The LSE study stated that state insurance is barely reaching low-income urban areas and less than 1 per cent had access to these government benefits.

Dhingra and Kondirolli contacted respondents in India who participated in an earlier survey following the first wave of COVID-19.

Also watch: India lost more than 22 million jobs in April, May: CMIE Chief Mahesh Vyas
Also read: Future of remote work: Some employees may change job than go back to office