To get a handle on urban poverty in India, the central government is planning to launch a massive programme of bureaucratic expansion instead. The expansion will be under the label of national urban livelihood mission (NULM) that mimics a similar programme run by the ministry of rural development ? the national rural livelihood mission.
The concept paper for the mission has been put up by the ministry of housing and poverty alleviation last week. The mission has three broad aims: To train the urban poor so that they can find employment, to mobilise them into self-help groups for financial security and finally promote entrepreneurship among those of them who want to venture out.
The first is co-terminus with the aim of the National Skill Development Corporation, the second is what the banking system is trying to forge through the financial inclusion model and a large component of the third is handled by the ministry of micro, small and medium enterprises.
Yet, instead of farming out the job to these entities, the ministry under Kumari Selja has decided to reinvent the wheel. The ministry is now in talks with the finance ministry to decide on the level of support needed to roll out the mission, once the concept paper is converted into a mission. It will replace the decade old Swarna Jayanti Shahari Rozgar Yojana that has an outlay of R813 crore in 2011-12 ( a 37.5% year on year). The new programme, couched in such grand terms, could have a budget close to R1,500 crore in the next fiscal.
The underlying aim of the urban livelihood mission is however reasonable. Unlike the employment schemes available for the poor in rural areas, their urban counterparts have little access to avenues to pull themselves out of poverty.
About a third of the 380 million Indians who live in urban areas are poor. Of them, more than 80% are employed in the informal sector. These are grim numbers. Besides, the only way to make Indian cities a dynamic engine of growth is to ensure that the poor get a piece of the action and not remain dependent on handouts.
As the document correctly points out, ?the inadequate allocation and focus on the livelihoods issues of the urban poor has led to a vicious cycle of low-skill economy?.
The answer to that is ensuring more access to credit for the poor, leveraging on technology they can learn and giving them property rights for livelihood. Unlike the rural areas, the institutions that can deliver for the urban poor are never geographically far from the population. In other words, the need is for institutional support from existing entities and a detailed handholding for the urban poor.
As a study (Chen and Raveendran) based on the 66th round of NSS shows, urban waged workers account for 59% of the total, the rest being self employed. Among the former, manufacturing and non-trade services predominate. To plan a livelihood mission that mimics self-help patterns of rural India is therefore counter productive.
It is also bad planning from an institutional angle. Institutions like banks are managed by the ministry of finance. So, no other central government entity can expect to set targets for them. While it is conceivably possible to liaise with the finance ministry to lend more for self-help groups in the urban areas, but over a decade the banks and the micro-finance institutions have learnt how to nurture these groups and even form them, at times. Banks in urban areas are neither few nor handicapped by lack of decision-making powers. So the role of any agency vis-a-vis them will be only to present a list of self-help groups in the vicinity.
The only remaining role for any other ministry or its agencies will then be to act as a counter guarantee for the groups, a process that is calculated to encourage adverse selection.
Experts working on urban issues are uncomfortable stating their concerns on record. Dilip Chenoy, CEO of National Skill Development Corporation was unwilling to comment on the plan when contacted by FE.
Similarly, Chetan Vaidya, director of the National Institute of Urban Affairs said he welcomed the NULM as a holistic piece of plan for the urban poor. Vaidya?s institute is an autonomous body under the ministry of urban development, next door to the ministry of housing and poverty alleviation.
Chenoy heads the government?s largest piece of skill development programme launched two years ago with an initial budget of R1,000 crore.
To develop these and other initiatives, the ministry of housing and poverty alleviation has proposed setting up a national mission management unit. Since urban issues are primarily of municipal level, the national units will be replicated at the state and then at the district level. For million plus towns, currently 53 as per the 2011 Census data, there will be separate city-level units. At each stage a multi-disciplinary team of experts in the area of poverty alleviation, skills and livelihoods, slum development/ redevelopment, community mobilisation, institution development, social development, credit, marketing, research and training, MIS etc will staff the units.
There is an elaborate plan to exchange information across the units, vertically and horizontally. It will also include reporting of statistics as progress reports and levels of decision making. The entire delivery mechanism of the NULM depends on this elaborate structure for which no cost-benefit study has been indicated in the paper. So the plan boils down to a bureaucratic structure, but even without which studies show that benefits are already reaching the urban poor through a host of user agencies.
By the time the plan is ready, the Aadhar-based identification system for the urban population will be available. A host of information on the poor can be drawn up based on the Aadhar numbers.
The plan also does not show how it will mesh with the JNNURM being implemented for the same user population. The JNNURM depends heavily on the municipal administration of a city to deliver its results. There is also a carrot- and-stick approach in the JNNURM. The NULM has none of these mechanisms and instead almost seeks to replace the municipal administration.
