core sector communique

Draft Concept Note on National Urban Livelihoods Mission

Following is the Draft Concept Note on National Urban Livelihoods Mission: I        Introduction 1.1.         Economic development and urbanisation are closely linked. Cities in India are emerging as the country’s engines of economic growth, with a contribution of more than 60 per cent to GDP.India’s urban population is now 377 million (Census of India, 2011). This represents a 31 per cent increase from 2001 when urban population was 286 million. Despite the robust economic growth at the national level, the number of the urban poor has steadily increased in recent decades. Estimated at 81 million in 2004-05 (NSSO, 61st Round), the urban poor represented about 26 per cent of the urban population in India. Many of them are subject to deplorable living conditions in slums and squatter settlements. The slum population in the country is estimated at 93 million in 2011. In addition to the substantive magnitude of the number of urban poor and slum dwellers, a key concern is the rising headcount of the urban poor. The number of urban poor is estimated to have increased during the period 1993-94 to 2004-05 by about 4 million. 1.2.         Data from the National Sample Survey Organisation (NSSO) 50th and 61st Rounds reveals that the Gini ratio of urban consumption distribution (that ranges from 0 with perfect equality to 1 with perfect inequality) increased from 0.34 in 1993-94 to 0.38 in 2004-05, widening the divide between the rich and the poor in cities. The per capita expenditure of the bottom 20 percent of urban households increased at a slower pace than that of the middle 60 percent or top 20 percent. Between 1993-94 and 2004-05, the share of the bottom 20 percent of urban households in total consumption expenditure decreased by 0.78 percentage point; from 8.04 per cent in 1993-94 to 7.26 per cent in 2004-05. In contrast, the share of the top 20 per cent of urban households in total consumption expenditure increased by 2.47 percentage points - from 42.81 percent in 1993-94 to 45.28 percent in 2004-05. The data reflects increasing divide between the rich and the poor in cities. 1.3.         Urban poverty is multi-dimensional. The urban poor face multiple deprivations - inadequate access to affordable housing, basic civic services like water, sanitation, drainage, solid waste management, roads, street lighting, health care, education and social security, and livelihoods opportunities. The dimensions of urban poverty can be divided into three categories: (i) residential vulnerability (access to land, shelter, basic services, etc.); (ii) social vulnerability (deprivations related to factors like gender, age and social stratification, lack of social protection, inadequate voice and participation in governance structures, etc.) and (iii) occupational vulnerability (precarious livelihoods, dependence on informal sector for employment and earnings, lack of job security, poor working conditions, etc.). These vulnerabilities are inter-related. Amongst the urban poor, there are sections subject to greater vulnerability in terms of the above classification; these include women, children, the aged, SCs, STs, minorities and differently-abled persons who deserve attention on a priority basis. 1.4.         The Report on Conditions of Work and Promotion of Livelihoods in the Unorganized Sector by the National Commission on Enterprises in the Unorganized Sector brought out in August 2007 (NCEUS, 2007) reveals that in 2004-05, out of India’s total workforce, 92 percent worked in the informal economy – in unorganized enterprises or households, excluding regular workers with social security benefits, and in the formal sector without any employment/ social security benefits provided by the employer. The urban informal sector comprises a large part of the unorganized non-agriculture sector. The proportion of non-agriculture workers in the unorganized sector rose from 32 percent in 1999-2000 to 36 per cent in 2004-05. Out of total workers in the non-agriculture sector, 72 percent were in the unorganized sector in 2004-05 as against 68 percent in 1999-2000. 63 percent of the unorganized workers in non-agriculture sector were self-employed, 17 percent were regular workers and 20 percent belonged to casual categories. 1.5.         The total employment in the Indian economy increased from 397 million in 1999-2000 (NSSO 55th Round) to 457 million in 2004-05 (NSSO 61st Round). This increase of 60 million has been solely of an informal kind. Out of this, 52.3 million occurred in the informal or unorganized sector, while the increase in employment in the organized sector was only 7.5 million. However, this increase has been entirely informal in nature, i.e. without job or social security. Thus, not only has there been an informalisation of the Indian economy but also an informalisation of the formal sector. The data underscores the size and significance of the informal economy or unorganized sector in India. 1.6.         Out of the unorganized sector workers engaged in non-agricultural activities in 2004-05, about 73.4 percent had educational attainment level of middle class or below, while 37.4 percent were illiterate or below primary school level. For females, the figures were 84.1 and 54.7 percent respectively. In urban areas, 65.6 percent of the unorganized sector non-agricultural workers were having education of middle class or below. The figure for urban females was 77.8 percent with 49.3 percent being illiterate or below primary. Low levels of education and skill in the unorganized sector workers have resulted in their inability to access the opportunities offered by emerging markets. This underscores the criticality of skills up-gradation for better livelihoods opportunities in urban areas. 1.7.         There is a high congruence between the informal economy and poverty. The NCEUS Report (2007) reveals that at the end of 2004-05, about 77 percent of the total population in the country were living below Rs. 20 per day and constituted most of India’s informal economy. About 79 percent of the informal or unorganized workers belonged to this poor and vulnerable group, with the figure at 90 percent for casual workers. These workers had no legal protection of job or working conditions or social security. They lived in abject poverty, excluded from the impressive gains from the economic reforms and liberalisation that ushered in from 1992-93. The bulk of the urban poor find their livelihood in the informal economy; between 94 percent and 98 percent of informal sector workers fall into the vulnerable group category. The number of the urban poor engaged in informal activities is so large that even a small improvement in the productivity of this segment of population through skill up-gradation can make a huge impact on GDP, leading to inclusive growth. 1.8.         In the above background, livelihoods issues, especially skill development for market-based employment as well as self-employment of the informal or unorganised sector workers, who constitute the bulk of the urban poor, is critical and of immediate importance. Urban poverty is different from rural poverty; urban poverty alleviation programmes need to be skills and credit access-based. Urban poverty being multi-dimensional, various vulnerabilities faced by the poor in cities and towns: occupational, residential and social need to be addressed simultaneously in a comprehensive and integrated manner with a targeted focus on the vulnerable groups so that a definitive impact can be made on ground. It is within this context that a mission-mode approach to urban livelihoods is considered necessary in the form of the National Urban Livelihoods Mission (NULM). This document sets forth the features of the NULM; the mission statement, values, and strategy of NULM; the mission components; and mission organisation structure. II       Need for a Mission Mode Approach to Urban Livelihoods 2.1.         The Government’s approach to livelihoods of the poor has, thus far, been scheme-based. Most of the programmes focusing on livelihoods have targeted rural areas; only under a limited number of schemes has there been a partial targeting of the urban poor. Of these, onlySwarna Jayanti Shahari Rozgar Yojana (SJSRY) – with components of Urban Self Employment Programme (USEP), Urban Women Self Help Programme (UWSP), Urban Wage Employment Programmes (UWEP), Skills Training for Employment Promotion amongst the Urban Poor (STEP-UP) and Community Development Network (CDN), has focused exclusively on urban poor livelihoods since 1997, albeit with significant funding constraints, have led to serious impediments in addressing the critical concerns of urban poverty comprehensively.