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Monday, August 4, 2008

Urban Livelihood


Livelihood is defined as a set of economic activities, involving self-employment, and or wage employment by using one’s endowments (both human and material) to generate adequate resources for meeting the requirements of the self and household on a sustainable basis with dignity for the purpose of the study. The activity is usually carried out repeatedly.

Sustainable Livelihood

A livelihood is sustainable when it can cope with and recover from stresses and shocks and maintain or enhance its capabilities and assets both now and in the future, while not undermining the natural resource base (Chambers, R. & Conway G., 1992). Livelihood promotion is about creating environments that will support such activity. It aims to equip people with assets and opportunities so that their resilience to cope is enhanced and they can meet their basic needs on a sustainable basis.

Urban Livelihood

Most of the urban poor are working poor, and form a major part of the informal sector of the economy. Although growingly invisible and casual, with changing employer-employee relationships in a range of occupations in recent times, the sector contributes nearly 65% of the national GDP, employing a sizable number of women, dalit and tribal groups who remain highly neglected and unprotected. The city economy and services depends largely on the urban poor, yet their livelihoods remain illegal and illegitimate in the eyes of the city authorities in many cases. The settlements they live in are either illegal or poorly served by the urban local bodies. It is thus important to also engage with urban governance to sustain the livelihoods of the urban poor.

Urban livelihoods in general, the experience shows that while it is true that an increasing gap does exist between the urban poor, especially a migrant’s skills and the opportunities offered by the urban economy causing a greater marginalization, there is an enormous potential for creating livelihoods for the urban poor in the informal sector through self-employment and job employment. However, the necessary understanding, skill and hands-on experience, to deal with the potential size and the complex challenges surrounding the urban informal sector, have remained either limited or few. Thus, a growing need of sharing and learning from the best practices in a collaborative manner with like-minded agencies is extremely needed at this particular moment.

Livelihood opportunities in urban areas for the poor are very limited. Facing the problems and considering all the viable options, migration occurs. The education system in India has widened the gap between the available employment opportunities and the employability of a person.

In urban areas, NGO/CBO’s work priorities must go beyond large metro cities, i.e. focus on medium and small towns from poorer regions/states especially in northern and eastern India. Urban population growth is much higher than the rate of overall population growth, and currently an estimated 30 percent of India’s population live in urban areas. By the year 2025, this number is expected to increase to 50 percent, with medium and small towns likely to experience the most rapid population growth.

A majority of the self-employed workers are poor women with limited formal education. They receive regular on-the job training and exposures where their learning outcomes are closely monitored and evaluated. The thrust remains not just on one-time training, but equipping groups to lay systems and process where training and learning outcomes are systematically measured on a regular basis to push each group member towards a higher degree of specialization and up the value chain. Ensuring such practices is not only critical for group enterprise to gain speed and reach higher productivity but it also helps in ensuring an appropriate return for each group member.

Many of the poor urban migrants, who have limited skills or formal educations, largely end up working in the urban informal sector. This generally offers them limited and unreliable livelihoods, with a lack of records pertaining to details of their employment and continuity, apart from exploitative terms of engagement. Large part of the income of the poorest-of-poor comes from unskilled labour and trade and service activity. Since demand for unskilled labour is unlikely to rise in the villages and a majority of the poor are landless and do not have access to agriculture. The sector, which has potential for growth, is the small-scale manufacturing and trade and services.

The big questions:

Employment Vs Employability

Every year millions of young first generation learners complete their secondary education will have to seek immediate employment to support their parents either displaced due to shrinking agricultural incomes or pushed into urban centers as unskilled daily wage earners by massive development projects. Majority of them end up as marginal workers since they do not possess skills needed in the service sector – construction industry, retailing, automobile, hospitality, banking and insurance sectors.

It has been noticed that 90% of the emerging employment opportunities in India require vocational skills[1] which are not imparted in schools/ colleges. Lack of skills or poor skills result in low incomes rather than unemployment – 58% of graduates make less than Rs.75, 000 per year[2]. Thus majority of young people in India suffer from skill deficit rather than unemployment.

Traditional vocational training programmes do not cater fully to the market needs as they do not include live and communication skills. Vocational training system needs to give interpersonal and teamwork skills. A focus on communication, leadership and basic IT skills is also needed.

Skill Up-Gradation Training Programme

Skill up-gradation training programme (SUTP) is different from vocational training, which aims at training people with only one time and short term course, whereas SUTP is a process of training an individual from time to time or at a regular interval, based on the various (each and every step) process involved in a particular trade/skill.

Industry recognition of the training course – Industry recognition and accreditation ensures full placement on completion of the course.

Placement and retention – Recognition ensures placement, however, retention is determined by various market conditions.

Financial Demand

Basis of an enterprise is capital. Most of the entrepreneurs could not perform due to the lack of 3As of Finance, i.e. availability, accessibility and affordability of funds and finance. It makes a lot of difference to any individual who can not afford even if having an access to credit facility. A long term sustainable model to finance the business models developed by the entrepreneurs is needed.


The required approach should be towards linking the urban poor and migrants with various types of self-employment and wage employment opportunities that are emerging in an urban informal sector economy, by taking full advantage of a growing economy, mainly around the growing services, manufacturing and construction sectors. This may include mainly-

Formation of collectives,

Promotion of saving and credit groups,

Exposure and training on employable skills,

Linking them up with markets, and

Promoting group enterprises.

Forming groups or collectives of urban poor enable them to better negotiate their terms of engagement. Some of the urban poor who have been mobilized for livelihood enhancement by the initiatives of various agencies, some of the targeted beneficiaries are construction workers, rickshaw pullers, home managers, rag pickers and sweepers.

Advocacy could be at basically four levels, they are-

Policy & planning

Central/state government

NGOs/CBOs and other social development agencies.

This would be the appropriate approach towards the building of a sustainable model for the urban poor towards sustainable livelihood opportunities.


Rajeev Ranjan Pandey


[1] Team Lease India Labour Report 2007.
[2] Team Lease India Labour Report 2007.


Ishaan Bhattacharya said...

It is good information.

Bhupendra said...

good effort but need to be very specific.

Alok said...

it is basic and informative on skill development

Rohan Goel said...
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