States Seek Urgent Funds to Sustain Urban Livelihood Mission

Syllabus: GS2/Govenance

Context

• At least five states have written to the Centre highlighting that lack of clarity over financial support to the flagship urban livelihood mission will adversely impact social protection of the urban poor.

About

• The Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM), ran from 2014 until 2024, creating over 10 lakh women’s self-help groups. 
  • The Ministry of Housing and Urban Poverty Alleviation had been implementing a Centrally Sponsored Scheme Swarna Jayanti Shahari Rozgar Yojana (SJSRY) since 1997. It has been restructured as DAY-NULM since 2013.
• MoHUA carried out a pilot project, Deendayal Jan Aajeevika Yojana – Shehari (DJAY-S), until December 2025. 
  • This pilot was meant to pave the way for a new scheme, but sources said it was no longer under consideration.

Key Features of DAY-NULM

• Formation of SHGs: It organised urban poor women into self-help groups to promote collective action and financial independence.
• Financial assistance: Provided a revolving fund of ₹10,000 per eligible SHG, along with access to subsidised credit and bank linkages.
• Skill development: Supported employment through skill training, placement and assistance in establishing micro-enterprises.
• Social empowerment: Strengthened community institutions and improved access to formal financial services for vulnerable urban households.

Major Concerns Arising from the Transition

• Funding Uncertainty: Several states, including Tamil Nadu, Tripura, Maharashtra, Madhya Pradesh and Karnataka, have reported exhausted funds, pending liabilities or uncertainty over the payment of staff salaries.
• Disruption of livelihoods: Delayed funding may affect SHG operations, bank linkages, interest subsidies and access to institutional credit for urban poor households.
• Risk to community institutions: The discontinuation of financial and administrative support could weaken SHGs and federations built over a decade.
• Uncertainty over staff continuity: States have sought clarity on funding salaries and administrative costs during the transition, while the Centre has indicated that states and urban local bodies should initially meet these expenses from available resources.
• Uneven state-level implementation: Differences in states’ financial capacities may affect the continuity and quality of livelihood support across urban areas.

Government’s Position

• MoHUA has stated that the experiences of the pilot project are being used to explore a new urban livelihood programme.
• Existing SHGs are being integrated with other government initiatives, including the Pradhan Mantri Awas Yojana, Swachh Bharat Mission, AMRUT, PM Surya Ghar: Muft Bijli Yojana and the PM Formalisation of Micro Food Processing Enterprises scheme.
• The Ministry has also emphasised the importance of retaining existing administrative structures to ensure continuity of beneficiary support during the transition.

Way Forward

• Ensure funding continuity: The Centre should clarify the timeline and structure of the proposed mission and settle eligible committed liabilities.
• Provide transitional financial support: Dedicated funding can be made available for essential staff, SHG activities and beneficiary services until the new scheme is operational.
• Institutionalise SHG convergence: Link urban SHGs with municipal services, waste management, food processing, housing and renewable energy programmes to diversify livelihood opportunities.
• Design an inclusive urban livelihood framework: The new mission should combine the broad-based poverty alleviation approach of DAY-NULM with targeted support for vulnerable occupational groups identified under DJAY-S.

Conclusion: 

• The transition from DAY-NULM to a new urban livelihood framework must protect the community institutions and livelihood opportunities created over the past decade. 
• Timely funding, policy clarity and effective Centre–State coordination are essential to ensure that the urban poor do not lose access to established support systems.

Source: IE