Strategic Measures to Support Urban Unorganised Labour in India

Walk through any Indian city and the economy on display is largely an unorganised one. The vegetable seller at the corner, the construction worker on a half-built apartment, the domestic helper, the rickshaw puller, the waste picker, the roadside cobbler. These workers form the backbone of urban life, yet most of them have no written contract, no fixed employer, no pension, and little protection if work dries up. Recognising this gap, the government has built a layered set of measures over the decades to give urban unorganised workers a degree of income, shelter, and security. Understanding these schemes is essential to understanding how the state tries to convert precarious urban survival into something closer to a dignified livelihood.

Why urban unorganised labour needs targeted measures 🔗

The unorganised sector employs the overwhelming majority of India’s workforce, and in cities it absorbs wave after wave of migrants arriving from villages in search of work. These workers face a common set of problems: irregular income, no social security cover, poor housing, weak access to formal credit, and constant exposure to harassment or eviction. Unlike factory workers covered by labour laws, they fall outside most protective frameworks. This is why urban labour measures usually attack the problem from several directions at once, combining employment generation, housing, credit, and legal protection rather than relying on a single solution.

Employment through the Swarna Jayanti Shahari Rozgar Yojana 🔗

The Swarna Jayanti Shahari Rozgar Yojana (SJSRY) was for many years the central government’s flagship urban poverty alleviation programme. Launched on 1 December 1997, it aimed to provide gainful employment to the urban unemployed and underemployed poor by encouraging self-employment ventures and providing wage employment. The scheme was funded on a 75:25 basis between the Centre and the states, and it deliberately worked through urban local bodies and community structures rather than top-down bureaucracy. Official SJSRY guidelines describe how Neighbourhood Groups, Neighbourhood Committees, and Community Development Societies were set up so that the urban poor themselves could identify beneficiaries and shape local priorities.

The Urban Self Employment Programme 🔗

The Urban Self Employment Programme (USEP) targeted individual urban poor beneficiaries who wanted to set up small enterprises. It provided a subsidy along with bank credit to help a person start a micro-business such as a small shop, tailoring unit, or service venture. A defining feature was its focus on weaker groups: a fixed minimum share of benefits was reserved for women, and Scheduled Castes and Scheduled Tribes were to benefit at least in proportion to their share in the local population. The idea was simple but powerful, give a poor worker a small capital push and the skills to use it, and self-employment can become a stable source of income rather than a desperate fallback.

The Urban Wage Employment Programme 🔗

The Urban Wage Employment Programme (UWEP) took the opposite route, creating direct wage work. It provided employment to people below the poverty line by using their labour to build socially and economically useful public assets such as community centres, drains, and infrastructure under the mid-day meal scheme. This component was aimed at smaller towns and ensured workers were paid the prevailing minimum wage, with a defined material-to-labour ratio to maximise how much employment each project generated. Alongside USEP and UWEP, SJSRY also ran skill training and a dedicated women’s self-help component, recognising that employability and group enterprise mattered as much as one-time financial aid.

It is worth noting that SJSRY has since been restructured into the National Urban Livelihoods Mission, now known as the Deendayal Antyodaya Yojana – National Urban Livelihoods Mission. The core logic, however, remains the same: combine self-employment support, skill training, and group enterprise to lift urban workers out of poverty.

The 74th Constitutional Amendment and urban local bodies 🔗

Schemes only work if some institution delivers them on the ground, and in cities that institution is the municipality. The 74th Constitutional Amendment Act of 1992 transformed how urban governance functions in India. As explained by the Directorate of Municipal Administration, the amendment added a new Part IXA to the Constitution covering Articles 243P to 243ZG, granted constitutional status to urban local bodies (ULBs), and introduced the Twelfth Schedule listing eighteen functional areas that municipalities can handle.

These functions include urban poverty alleviation, slum improvement, public health, and the provision of basic services, all of which directly touch the lives of unorganised workers. By making municipalities a constitutional tier of government with elected representatives, reserved seats for women and weaker sections, and devolved responsibilities, the amendment gave urban local bodies the authority to plan and implement development projects close to where workers actually live. In practice, most centrally funded urban schemes, from employment programmes to housing, are routed through these bodies, which is why strengthening them was a precondition for everything else.

Housing security through VAMBAY and successor schemes 🔗

For an unorganised worker, a secure roof is not a luxury but the foundation of a stable livelihood. The Valmiki Ambedkar Awas Yojana (VAMBAY), launched in 2001, was designed to provide shelter or upgrade existing shelter for urban slum dwellers living below the poverty line, with the stated goal of “shelter for all” and slum-free cities. According to a government release, the scheme was a centrally sponsored programme that funded the construction and upgradation of dwelling units along with community toilets, with costs shared between the Centre and the states.

VAMBAY also built in a social justice dimension by reserving housing for Scheduled Castes, Scheduled Tribes, backward classes, and persons with disabilities, and by giving priority to women in allotment. The scheme was later merged into the Integrated Housing and Slum Development Programme, and urban housing for the poor is now pursued mainly through the Pradhan Mantri Awas Yojana (Urban). The principle established by VAMBAY endures: housing is treated as a core element of social security for urban labour, not a separate welfare add-on.

Microfinance and self-help groups 🔗

Access to credit is one of the sharpest divides between organised and unorganised workers. A salaried employee can borrow from a bank against a payslip; a street vendor or a daily-wage worker usually cannot. To bridge this, urban poverty schemes have leaned heavily on microfinance and the self-help group (SHG) model. Under programmes like SJSRY and its successor mission, poor women are organised into groups that pool small savings, build a credit history, and then access bank loans at affordable rates to set up group enterprises.

This SHG-bank linkage approach does two things at once. It provides working capital to people the formal banking system would otherwise ignore, and it builds collective bargaining power and confidence among members who were previously isolated. Subsidies on group enterprise costs, combined with bank loans, allow urban poor women to run thrift and credit societies, small manufacturing units, or service businesses. Microfinance, in this sense, is not just about money; it is about pulling informal workers into the formal financial system and giving them a stake in it.

Protecting street vendors 🔗

Few groups capture the vulnerability of urban labour better than street vendors. They are self-employed, provide affordable goods to millions of city residents, and yet for decades operated under constant threat of eviction, confiscation, and harassment. An estimated ten million people earn their living through street vending in India, with the largest concentrations in cities like Mumbai, Delhi, and Kolkata, and street vending is reckoned to account for a significant share of urban informal employment.

The Street Vendors Act, 2014 🔗

The turning point was the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014. The full text on the India Code portal describes it as an Act to protect the rights of urban street vendors and to regulate street vending activities. The law gives vendors legal recognition through a certificate of vending, sets up Town Vending Committees with vendor representation to decide on vending zones, and crucially prohibits arbitrary eviction or relocation without following due process. It draws its constitutional strength from the fundamental right to practise any trade or profession, converting what was once an informal and precarious activity into a legally protected livelihood.

Implementation gaps and continuing support 🔗

Legal recognition on paper does not automatically translate into protection on the street. A parliamentary committee review found that many states and union territories had still not fully implemented key provisions of the Act years after its passage. Independent assessments by labour advocacy organisations such as WIEGO reach a similar conclusion, noting that the law is widely admired internationally but suffers from only partial implementation on the ground. To complement the legal framework, the government has also launched targeted microcredit support, the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme, to help vendors access small working-capital loans, especially after the disruption of the pandemic.

How these measures fit together 🔗

Taken individually, each of these measures addresses only one slice of the problem. SJSRY and its successor provide employment and skills. The 74th Amendment creates the local institutions that deliver schemes. VAMBAY and later housing programmes secure shelter. Microfinance opens the door to credit. The Street Vendors Act provides legal protection. Together, they reflect a recognition that the insecurity of urban unorganised labour is multidimensional, and that income, housing, credit, and legal status all reinforce one another. The persistent challenge is implementation, ensuring that a worker who is technically eligible for a scheme actually receives its benefits in a city that often treats the informal poor as an inconvenience rather than as essential workers.

What do you think? If you had to strengthen just one of these measures, employment generation, housing, microfinance, or legal protection for vendors, which would deliver the greatest improvement in the daily life of an urban unorganised worker, and why? And given the repeated gaps between law and implementation, what role should urban local bodies play in closing that distance?

References

1. https://www.mohua.gov.in/upload/uploadfiles/files/7(3).pdf
2. https://mahadma.maharashtra.gov.in/en/74th-constitutional-amendment-and-urban-local-bodies-in-india/
3. https://archive.pib.gov.in/release02/lyr2002/rapr2002/02042002/r020420028.html
4. https://www.indiacode.nic.in/handle/123456789/2124?locale=en
5. https://prsindia.org/policy/report-summaries/implementation-of-street-vendors-protection-of-livelihood-and-regulation-of-street-vending-act-2014
6. https://www.wiego.org/blog/indias-street-vendor-protection-act-good-paper-it-working/