In Stimulus, The Helping Hand
The Times of India Mumbai|June 30, 2021
FM’s policy of guaranteed loans to urban poor is superior to other welfare schemes
Krishnamurthy Subramanian
In Stimulus, The Helping Hand

Among proposals announced by FM Sitharaman on Monday, an important element is the credit guarantee scheme to incentivize microfinance institutions (MFIs) to lend to the urban poor.

Undoubtedly, the urban poor has experienced stress due to the pandemic and consequent economic restrictions. Several commentators have suggested a job-guarantee scheme for urban areas to alleviate their distress.

This suggestion is based on the rural job guarantee scheme MGNREGA. While MGNREGA has been useful in alleviating rural distress during the unprecedented pandemic, we must not forget the large inefficiencies that stem in normal times from the permanent entitlement it creates.

Extensive research on MGNREGA provides evidence of such inefficiencies. In a democratic polity, permanent entitlements created by schemes such as MGNREGA, the National Food Security Act, etc are hard to unwind. An urban job guarantee scheme would suffer the same fate.

Second, replicating the rural MGNREGA to urban areas poses several challenges because of key differences between rural and urban employment. Unlike rural employment, urban employment is not seasonal. Moreover, as skill levels vary significantly in urban employment, having one wage for all will not work as with rural MGNREGA.

Third, an unintended effect of an urban job-guarantee program would be to increase migration into urban areas. Given the differences in the cost of living, the wage under an urban job-guarantee programme has to be higher than the rural one. This difference would increase urban migration.

Bu hikaye The Times of India Mumbai dergisinin June 30, 2021 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

Bu hikaye The Times of India Mumbai dergisinin June 30, 2021 sayısından alınmıştır.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

THE TIMES OF INDIA MUMBAI DERGISINDEN DAHA FAZLA HIKAYETümünü görüntüle
US soccer scrubs Islamic emblem from Iran flag
The Times of India Mumbai

US soccer scrubs Islamic emblem from Iran flag

The federation said in a statement Sunday that it decided to forego the official flag on social media accounts to show “support for the women in Iran fighting for basic human rights.”

time-read
2 dak  |
November 28, 2022
Pyar Ke Saat Vachan Dharam Patnii begins on TV tonight
The Times of India Mumbai

Pyar Ke Saat Vachan Dharam Patnii begins on TV tonight

What happens when kismet takes over the lives of two couples belonging to two different sections of society?

time-read
1 min  |
November 28, 2022
Arijit serenades music lovers in Mumbai
The Times of India Mumbai

Arijit serenades music lovers in Mumbai

Arijit Singh casts a spell with his voice

time-read
2 dak  |
November 28, 2022
ARGENTINA LIVE TO FIGHT ANOTHER DAY
The Times of India Mumbai

ARGENTINA LIVE TO FIGHT ANOTHER DAY

Messi's Strike Rattles Mexico And Lusail, Brings Team Back From The Brink

time-read
4 dak  |
November 28, 2022
Costa Rica come alive
The Times of India Mumbai

Costa Rica come alive

Los Ticos Stun Japan With Late Fuller Winner

time-read
1 min  |
November 28, 2022
Morocco's moment under the sun
The Times of India Mumbai

Morocco's moment under the sun

Inspired Atlas Lions Shock Belgium For First WC Win In 24 Years

time-read
3 dak  |
November 28, 2022
ON YOUR MARK, GET SET, SOAR
The Times of India Mumbai

ON YOUR MARK, GET SET, SOAR

Athletics Icon Usha Set To Become First Woman President Of IOA

time-read
2 dak  |
November 28, 2022
Industry body calls for slower rate hikes
The Times of India Mumbai

Industry body calls for slower rate hikes

CII Asks RBI To Moderate Pace Of Raising Repo As Global Woes May Impact Growth

time-read
2 dak  |
November 28, 2022
The Times of India Mumbai

Insurance reforms may see PE funding surge in sector

Irdai Raises Investment Cap, Allows PEs To Be Promoters

time-read
1 min  |
November 28, 2022
Cut ties with child-killing regime, Khamenei's niece tells world, held
The Times of India Mumbai

Cut ties with child-killing regime, Khamenei's niece tells world, held

Iranian authorities have arrested a niece of supreme leader Ayatollah Ali Khamenei after she recorded a video describing the authorities led by her uncle as a “murderous and child-killing regime”.

time-read
1 min  |
November 28, 2022