‘DUET is just an idea now’

Interview with Jean Dreze, economist.

THE EMINENT ECONOMIST, JEAN DREZE, IS well known for his far-reaching contributions to India’s public and social policy. Dreze’s research and deep knowledge of India’s development and economic landscape make him one of the country’s foremost authorities on rural unemployment, gender inequality, child health, famine and hunger. A key participant in drafting the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Dreze recently proposed an urban employment scheme called the Decentralised Urban Employment and Training (DUET) scheme. Excerpts from an interview to Frontline:

An urban employment scheme has been discussed by economists periodically. When did you initiate DUET?

The DUET proposal germinated in mid-2020, soon after the nation’s conscience had been stirred by the plight of migrant workers thrown out of work by the COVID-19 crisis and lockdown. It was also inspired by similar schemes that are being used in some European countries to subsidise domestic services. The basic idea of job stamps was adapted, with public institutions being the employers instead of private households.

Even before the pandemic there was a crisis in employment in urban areas. Did COVID-19 escalate the issue?

The Indian economy has a chronic problem of poor employment opportunities and slow rise in wages. It is actually more useful to look at real wages than employment rates because employment is hard to measure. According to the CMIE data, for instance, a beggar is considered employed. Wages are easier to monitor, and if wages are rising, it means that people have better jobs.

If you look at China, wages are rising fast. This is partly because China has a relatively healthy, educated and skilled labour force, so that most people are able to participate in the growth process. In India, there is a massive reserve army of people who have little education or marketable skills and keep working for exploitative wages.

Even before the COVID crisis there was a lack of remunerative jobs in both urban and rural areas. The pandemic, of course, made everything worse. We are still feeling the after-effects.

Has the Central government addressed the problem?

In the initial days of the COVID crisis, there were some relief measures such as extra money for pensioners and other cash transfers. Very soon, however, relief became more business-oriented than people-oriented. For people, the bulk of sustained relief came from pre-existing food subsidies and the MGNREGA. Today, there are no special relief measures other than foodgrain rations of 5 kg per person per month, which may be discontinued soon.

Has there been an interest in DUET from the Central or State governments?

The DUET proposal is just an idea as of now. Until it is tried, it is hard to guess how well the scheme is likely to work. DUET could be launched on a small scale with modest funds, and then expanded if it works. It is not like a demand-driven employment guarantee, where the financial cost is unpredictable. In a DUET scheme, the budget is a policy decision.

The Central government has shown no interest in an urban employment initiative, but several States are experimenting with urban employment schemes today, which is a good thing. In most cases so far, the budget is very small, like Rs.100 or 200 crore a year. Rajasthan, however, has committed Rs.800 crore this year for an urban employment scheme. This is an important initiative that needs to be watched.