How one Indian state dealt with pandemic unemployment

The nationwide lockdown in India announced on 24 March, 2020 triggered a mass migration in the world’s second-most populous country. Informal workers in large cities returned to their home states and villages without the prospect of work.

In Odisha, one of India’s poorer states with a population of 42 million – of whom seven million live in cities – some one million migrants returned to their respective villages. Another two million urban poor in Odisha lost their livelihoods when economic activities were halted due to the lockdown.

For state and local officials in India, the sudden migration, coupled with the shuttering of economic activity in a country with a significant informal sector, heralded a massive crisis. Early in the lockdown, Mathi Vathanan, Odisha’s Principal Secretary of Housing and Urban Development, attended a video conference with the national government and leaders of the other state governments. Each state contributed ideas on how the country could respond to this crisis.

One suggestion was that the national government should come up with an employment scheme for the newly unemployed workers. But it quickly became clear that New Delhi was not going to create a programme of this scale, so Vathanan resolved that Odisha should take it on.

“If the federal government is not going to come up with a scheme, then state governments should,” he said. Less than one month later, the Odisha state government and the state’s 114 urban local bodies announced that any urban worker who wanted a job could get one through the Urban Wage Employment Initiative (UWEI). “That is the kind of rapidness with which we acted.”

Rural employment

Odisha was inspired by the national rural employment guarantee that India launched in 2005, which provides up to 100 days of unskilled paid labour on public works projects as a measure to combat rural poverty. Vathanan saw a litany of public works projects that could improve Odisha’s cities: urban beautification through art and murals, storm water drainage improvement, enhancing green cover in public spaces, installing systems for rainwater harvesting, and building children’s play areas. Odisha also sought to construct more buildings to house programmes for the statewide Mission Shakti women’s empowerment scheme and more slum-based community centres known as parichaya.

In order to roll out UWEI quickly, Odisha bypassed traditional means of distributing public funds for government works. “Procurement would take too long,” Vathanan said. Instead of going to the traditional companies that bid on tenders, what Vathanan calls “an unholy nexus between contractors and officials,” the state and its urban local bodies turned to civil society. Odisha is home to a thriving network of community-based organisations like women’s self-help groups, thrift and credit cooperatives, and slum development associations. Government is already accustomed to working with such groups through the JAGA Mission, which has issued land titles to nearly a million slum dwellers in Odisha since 2017.

The first tranche of 1 billion rupees (US$14.3 million) was rolled out from within the Odisha state budget. Community-based organisations earn 7.5 percent of the cost of the project in exchange for supervision and management. Workers, in turn, earn a minimum wage that is paid via bank transfer as opposed to the cash wages typically paid to day labourers.

The urban local bodies provide municipal engineers to support the projects and over time the community-based organisations gain skills to tackle more complex projects. So far, 601 community centres have been completed with an additional 324 under construction, while 6,525 other public works have been completed or are ongoing, with a target of 18,000.

Timely intervention

“It was a very timely intervention because many of us with large families did not have access to good food, especially those of us from urban poor households,” said Rekha Pradhan, President of the Mahasanga Self-Help Group in Bhubaneswar. “It provided a kind of succour to families by providing work which was not available at that time.” Pradhan’s own husband did not receive wages for 45 days.

The Mahasanga Self-Help Group’s 400 members painted murals, planted trees, and built a community centre. “Through this initiative, many women came out of the house for the first time to enhance their household income, which was a source of great pride and confidence,” said Pradhan. “They felt very happy to contribute to the family income at a time when the main members of families were struggling to get work.”

Ashok Kumar Rout is the secretary of a slum development association in Dhenkanal. His slum had recently been upgraded, a process which built on the association’s capacity to recruit workers from within the slum and assign them to tasks appropriate to their skillset. That experience left the association in a good position to serve as both implementing agency and partner to manage and execute public works like the construction of a community centre, rainwater harvesting infrastructure, and road improvements. The association named its completed centre “Identity House.” It is the slum’s first public building to celebrate festivals and host functions like birthdays and marriages.

“This amount really helped tide us over during the crisis,” said Rout, whose car mechanic shop had no revenue for 90 days. “It was a very crucial time during which the supervision charges from the programme were really useful for my own family.”

Despite taking inspiration from India’s rural employment guarantee scheme, Odisha’s Urban Wage Employment Initiative is not a carbon copy. “That’s a good thing,” said Gautam Bhan, Senior Lead for Academics and Research at the Indian Institute for Human Settlements. “Urban employment programmes cannot simply be transplanted from the rural and UWEI makes some good distinctions in its design, starting with the ability to contract slum dweller associations, for example, to decide and carry out very local public works.”

With Odisha’s temporary scheme set to become permanent and a growing chorus for a national urban equivalent to India’s rural employment guarantee scheme, Bhan sees Odisha’s innovation as generating significant momentum.

“Now is certainly the time to do it as a key part of post-COVID recovery that is inclusive and more equitable and doesn’t just focus on the return of the stock exchange or the formal economy,” Bhan said.

“For Odisha to transition the programme into something more permanent, they have to think about how to expand to include basic services, address the state’s migration structure as a net-out-migration state for labour, and integrate skills and enterprise development. There is a lot of potential here and I hope they take it up.”

Odisha is one of 15 finalists in the Guangzhou Awards. The winners will be announced later this year. The biennial Guangzhou Award was launched in 2012 and is run in partnership with the City of Guangzhou, China; United Cities and Local Governments (UCLG); and the World Association of the Major Metropolises (Metropolis). It recognises innovation in social, economic and environmental issues and aims to share best practices between cities globally.

Image: Ishan Khosla (Flickr)