Poverty & Inequality

DUET: Employment programme in public works in small towns

  • Blog Post Date 12 September, 2020
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Pranab Bardhan

University of California, Berkeley

bardhan@econ.berkeley.edu

Given the severe problems of unemployment and under-employment in urban India, particularly among the country’s burgeoning youth population, Pranab Bardhan emphasises the need for an employment programme in urban public works. In his view, such a programme should be inclusive, local government-driven, and prioritise projects that serve environmental and health goals in small towns. 

For many years, I have been deeply worried about the severe unemployment and under-employment problems in urban areas, particularly among India's burgeoning population of youths. Its explosive potential is already apparent in frequent incidents of crime, extortion, and lynch mobs in many parts of urban India. Since 2017 I have written quite a few op-eds on this, suggesting policy measures like (a) employment programmes in urban public works, and (b) wage subsidies for formal sector jobs. The problems and the policy urgency have, of course, been exacerbated by the pandemic-induced harsh lockdown. The government has taken some stingy relief measures, and even those are more for rural than urban areas. But beyond the immediate hardships, the more general problems will remain with us for many years. I therefore generally and enthusiastically endorse Jean's DUET proposal.

Below are some brief suggestions of how I may modify or expand on Jean's proposal.

  1. Maybe the local Government in each area, rather than the state government, should issue the job stamps for approved public institutions and for approved projects (with a time-bound approval process). Local governments will have more information (on the institutions and their projects) and better accountability – at least local people will have easier access to whom to agitate against in cases of default, and to local elections where they can register their grievances, if necessary. In approving institutions and projects, the local governments may involve or consult the ward committees and local NGOs.
  2. There should be random public audits of completed projects, and the results quickly and widely publicised, with some provision for punishing willful laxity or corruption.
  3. Jean's proposal is for all of urban India. I would suggest, at least to begin with, leaving out metropolitan cities (where any possible effect on increased congestion will be more serious), and to confine the programme to the vast numbers of small towns (where the public infrastructure is even worse than in the metropolitan cities).
  4. In deciding on projects, one should give preference to (i) particularly labour-intensive projects, and those that serve (ii) environmental and (iii) health goals. For example, (i) construction projects like building and repairing roads, public housing, etc. (ii) sorting and recycling garbage, refurbishing public spaces and parks in neighbourhoods, building mass transit, fitting solar cells, restoring and cleaning water bodies, rainfall harvesting, and so on (iii) spraying for mosquitoes, covering sewage drains, building public toilets particularly in slums, personnel for primary healthcare centres, hiring more ASHA (Accredited Social Health Activist) workers, etc.
  5. In registering workers and giving them job cards, one should be inclusive, rather than exclusive. Any proof of urban residence, and in the case of migrants their portable ration card should be accepted. I would not worry too much about someone 'double-dipping', doing both MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) and DUET work. Fake payrolls is a bigger worry, but that is where random audits with punishments will be important. I presume it will not be too difficult to arrange for 'smart' job cards where the information about payments will be registered, with, of course, a cap for the year.
  6. I think we should distinguish between two types of DUET work, mainly manual unskilled work, and low-skilled work. For example, in the projects I have cited above, some work like health work or fitting solar cells or some masonry in construction will require some skills. I suggest the mainly manual work will be paid at the prevailing minimum wage, and the low-skill work at a pre-specified percentage above the minimum wage (if there is no prevailing minimum wage for that skill), but not too far above the minimum. You do not want to draw too many people already employed.
  7. The ‘placement agency’ should be independent and seen to be independent, if the purpose is to minimise collusion. (If it is not a purely administrative body, maybe people nominated by both the ruling party and opposition in the local government should be in the agency).
  8. The money should come, for now, mainly from the central government (maybe through the Finance Commission) and directly assigned to the local government. Ultimately the local property tax system (which is currently afflicted by under-assessment and corruption) should have its long overdue overhaul, and DUET should be financed out of local property taxes (local property values are to go up with successful public works under DUET), making it more accountable. Local people are likely to make more noise if their tax money is stolen or misused, and this may also affect the election prospects of local politicians.
  9. There are many practical-political problems of announcing an urban employment guarantee. I would not introduce that for DUET, at least not in the short run. I think as DUET gets entrenched, workers' expectations will change, and that will put considerable pressure on politicians even without the announcement of a guarantee. 
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