Launched in 2022, the Tamil Nadu Urban Employment Scheme (TNUES) aims to provide employment opportunities to urban households through local public works at minimum wages. With this initiative, Tamil Nadu joined Kerala, Himachal Pradesh, Rajasthan, Odisha and Jharkhand, which were implementing similar programmes, essentially extending MGNREGA to urban areas.
Economists and urban development scholars have advocated these programmes, especially post the COVID-19 pandemic, as an important social safety net for the livelihood security of urban informal workers. In Tamil Nadu and other states, such schemes highlight the need and demand for social security measures.
Implementation through urban local bodies
This article delves into the implementation of TNUES, drawing on the TN State Planning Commission’s administrative data and rapid assessment report on the scheme, from early 2023. The report is based on a survey of 566 respondents and examines the scheme’s functioning in the State.
The TNUES began as a pilot project in a few zones of municipal corporations, seven municipalities, and 37 town panchayats, including the Greater Chennai Corporation (GCC). Its objective is to promote gender equality and social inclusion in the labour market. This was evident from its initial implementation, although there were several teething issues.
Read more: From India’s urban landscape: The aspirations and struggles of migrant workers
Two years on, a recent news report revealed that the GCC had almost shelved the TNUES in June 2024 because of a lack of worker participation. One of the reasons cited was the programme’s low wages for workers.
Issue of low wage rates
The calls for increasing wages of urban employment guarantee (UEG) schemes have been raised in Rajasthan (Indira Gandhi Rozgar Guarantee Yojana) and Himachal Pradesh (Mukhya Mantri Shahri Aajeevika Guarantee Yojana) as well. These calls underscore the inadequacy of the statutory minimum wages for urban areas in these states. The minimum wages under the scheme differ based on the size of the urban local bodies — Rs 300 for town panchayats, Rs 342 for municipalities and Rs 382 for class A corporations.
However, the current daily wage rate for casual work in urban areas of Tamil Nadu is around Rs 800 for men and Rs 500 for women. Despite the low wages, these programmes attract many women workers. This is likely because the work is locally available and offers flexible hours, allowing women to manage their home and work responsibilities simultaneously.
Majority participation by women workers
More than 80% of the State Planning Commission report survey respondents were women. Moreover, most of the scheme’s beneficiaries were women who had been out of the workforce before joining TNUES. These findings are consistent with what has been found in the UEGs in Rajasthan (Vanaja et al. 2024; Choragudi, 2024), Himachal Pradesh (Choragudi, 2022) and Kerala (Chathukulam et al., 2021) — women constitute the majority of the UEG workforce and many of them have limited employment opportunities elsewhere.
Here are some findings of the TN State Planning Commission survey:
- The majority of the women interested in working in TNUES were above 40 years
- More than 60% had not received education beyond upper primary level
- Around 15% were widowed/abandoned
- More than 50% belonged to SC/ST/MBC communities and 55% were not part of the active workforce.
- Additionally, close to a quarter of the women workers were primary breadwinners for their families.
- Many women respondents said the work proved to be socially liberating as they enjoyed spending time with fellow women during work.
- Close to 5% of the women workers saved their wages earned from the programme.
- Around 25% spent some of their wages on medical/health expenses and 44% spent them on their children’s education.
These factors indicate the programme’s importance in ensuring livelihood security for the vulnerable and marginalised sections in urban areas in Tamil Nadu. The report finds that in smaller towns, where agriculture remains a major source of employment, women take up TNUES work during the lean season — a trend also seen in MGNREGA.
This highlights the utility of such schemes in newly urbanised areas that no longer benefit from NREGA. This phenomenon was also observed in Himachal Pradesh, where workers from small towns participated in the MMSAGY perceiving it as ‘shahri NREGA’ (urban NREGA).
Challenges faced by TNUES workers
There have been several challenges in implementing the TNUES in urban areas including Chennai — workers struggled to find adequate work, wages were delayed, and the types of work offered didn’t match the programme wages. Despite more than 200,000 households enrolling within a few months of its launch, less than 1% received work. Yet, the report highlighted that 99% of the workers surveyed wanted the programme to continue and expand, indicating a strong demand even for the bare minimum livelihood opportunities.
While more than 60% of the workers received their wages on time (within 15 days of completion of work), many others in the survey reported having to wait more than a month to receive their wages. Such delay in payments contributes to a discouragement effect among workers where they have to keep working without pay for long periods and also increases dissatisfaction with the work. Similar challenges were observed in Rajasthan, where workers had to wait for more than three months to receive IRGY wages.
Additionally, more than 80% of the respondents were engaged in tasks like desilting, constructing rainwater harvesting structures and roads/walkways construction. Beneficiaries found the work tedious, and this could be one of the reasons for the decrease in enthusiasm among workers. Also, these tasks require more manpower, skill and effort than the compensation offered under the scheme.
The way ahead — what the government must do
The discontinuation of the Tamil Nadu Urban Employment Guarantee Scheme (TNUES) in Chennai due to a lack of workers, less than two years after its inception, highlights the importance of adequately addressing key issues such as wage rates and programme design.
For such employment schemes to succeed, State governments need to adopt a long-term perspective, ensuring sufficient generation of work, fair compensation for the work done, timely payments, and adequate decentralisation of powers and finances to ULBs. The lessons learnt from TNUES, as well as similar programmes in Rajasthan, Himachal Pradesh, and Kerala, should be seen as opportunities to refine and improve their effectiveness.
Urban employment guarantee schemes have immense potential to provide livelihood security for urban workers as evidenced by the profile of beneficiaries, and with sustained commitment, they can become vital instruments in enhancing labour market conditions, especially for women workers and addressing urban poverty and vulnerabilities.