Rajasthan’s landmark minimum income bill to provide relief to the urban poor

Wages for work done will be disbursed within a fortnight, though the wage rate has not been disclosed in the bill. Under the pension scheme, the bill proposes a monthly payment to the old, specially-abled, and widowed or single women, with a 15 percent annual increment.

In rural Rajasthan, the bill proposes guaranteed employment for at least 25 days in a financial year, over and above the 100 days already assured under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA).

Nikhil Dey, Founder Member of Mazdoor Kisan Shakti Sangathan (MKSS) and the National Campaign For People’s Right to Information (NCPRI), told Moneycontrol that this bill addresses the need for minimum income guarantee for crores of vulnerable families across the country.

“The law provides an employment guarantee for those who can work (both in rural and urban areas), and a pension for those who can't, thereby ensuring a minimum income for all. This will be a breakthrough because there has been a long-standing demand from across the country for an urban employment guarantee, as well for an increase in the number of days of work assured under MNREGA. This demand went up dramatically during and after Covid,” said Dey.

Economist Jayati Ghosh finds it shocking that the central government has “chosen to starve” MNREGA of funds despite serious unemployment.

“The Rajasthan government should be congratulated for increasing the number of days of guaranteed work on its own, as it will help ensure basic livelihood with dignity, as well as provide a demand impetus in rural areas, which will in turn help other economic activity to expand,” Ghosh added.

Ghosh was referring to the 33 percent cut in the budgetary allocation of MNREGA, from Rs 89,400 crore FY22-23 to Rs 60,000 crore in FY 23-24.

Dey pointed out that the Rajasthan bill is the first instance of a legally-guaranteed social security pension. “The provision of a minimum amount of Rs 1,000 with a 15 percent increment every year is significant, and a breakthrough in the demand for indexing payouts to the economically vulnerable," he said.

In contrast, the central government — through a centrally-sponsored scheme that only applies to outdated BPL (below the poverty line) lists — gives the paltry sum of Rs 200 per month, which has been stagnant since 2007.

Ghosh said that the Rajasthan bill was not the first employment guarantee scheme for the urban poor in India, and states like Kerala, Odisha, Madhya Pradesh, and Jharkhand have already introduced such measures.

“The Ayyankali scheme in Kerala is the oldest such programme and probably the most successful so far. It is important to recognise that urban poverty is a serious concern, which we do not know enough about because the consumption surveys of the NSSO (National Sample Survey Organisation) have not been conducted after the completed survey was junked in 2017-18. The results of the survey that has finally started now will not be known until late 2024,” said Ghosh.

Acknowledging that there will be an additional burden on the state exchequer because of these schemes, Ghosh added, “Ideally, this should have been sponsored by the central government or at least, the centre should have shared the cost of this.”

News reports have suggested that the state government anticipates these schemes to cost Rs 2,500 crore annually. But since the pension comes with a 15 percent annual increment, and wages would also likely be indexed to inflation, the outgo would probably increase year on year.