9th Five Year Plan (Vol-2)
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Poverty Alleviation Programme
Poverty Alleviation in Rural India: Programmes and Strategy || Urban Poverty Alleviation || Public Distribution System


2.2.1 Poverty reduction is an important goal of the urban policy. Urban growth is a result of (1) natural increase in population (2) net migration from rural areas to urban areas and (3) reclassification of towns. The common notion that migration largely fuels urban growth is only partially correct. Therefore, it is necessary to view urban poverty as distinct from rural poverty and not as mere transfer of rural poverty into urban areas.

Urban poverty leads to :

(a) proliferation of slums and bustees; (b) fast growth of the informal sector; (c) increasing casualisation of labour; (d) increasing pressure on civic services; (e) increasing educational deprivation and health contingencies.

The Urban Poverty Alleviation Programmes (UPAPs) which were in operation during eighth plan are as follows:

Nehru Rozgar Yojana (NRY)

2.2.2 In order to alleviate the conditions of urban poor, a Centrally Sponsored programme - Nehru Rozgar Yojana - was launched at the end of the Seventh Five Year Plan (October 1989) with the objective of providing of employment to the urban unemployed and underemployed poor. The Central Government indicated its overall contribution while the essential task of identifying, earmarking and coordinating the relevant sectoral inputs was undertaken by the State Governments. The NRY consisted of three schemes namely (i) the Scheme of Urban Micro Enterprises (SUME); (ii) the Scheme of Urban Wage Employment (SUWE); and (iii) the Scheme of Housing and Shelter Upgradation (SHASU). The physical and financial details of the implementation of these Schemes are at Annexure-I and Annexure-II respectively. During the Eighth Plan, 92% of the available funds were utilised and but for the shortfall in the number of dwelling units upgraded/in progress under SHASU, the targets have been achieved under all the other schemes.

Urban Basic Services for the Poor (UBSP)

2.2.3 The UBSP Programme was implemented as a Centrally Sponsored Scheme during the Eighth Five Year Plan with the specific objectives of effective achievement of the social sector goals; community organisation, mobilisation and empowerment; and converence through sustainable support system. The expenditure on the Programme was being shared on a 60:40 basis between the Central and the State Governments and UTs (with legislatures). Further, the per capita expenditure on any slum pocket is Rs.75/- in the first year and Rs.50/- from the second year onwards after the basic infrastructure is developed. The UBSP was targetted to cover 70 lakh urban poor beneficiaries in 500 towns during the Eighth Plan period. The Programme has achieved the physical target of 70 lakh beneficiaries during the Eighth Plan period in 350 towns. Against the release of the Central share of Rs.8090 lakh, the release of the State share was Rs.3439.64 lakh. As on 31.03.1997, 353 towns and 4993 slum pockets have been selected for coverage and 75 lakh beneficiaries have been covered.

Prime Minister's Integrated Urban Poverty Eradication Programme (PM IUPEP) :

2.2.4 Recognising the seriousness and complexity of urban poverty problems, especially in the small towns where the situtation is more grave due to lack of resources for planning their environment and development, the PMI UPEP was launched in November, 1995. The PM IUPEP was a Rs.800 crore scheme approved for the period up to the year 2000. Programme was applicable to all Class II urban agglomerations with a population ranging between 50,000 and 1 lakh subject to the condition that elections to local bodies have been held. The Programme was being implemented on a wholetown/ project basis extending the coverage to all the targetted groups for recuring a visible impact. During 1995-96 and 1996-97, Rs.176.40 crore were released to the States/UTs. Most of the States are in the preparatory stages of the Programme, such as house-to-house survey, patial mapping, need assessment, developing lternative project reports, building community structures etc., which take quite some time. The physical achievements as reported by the States are as under:

  1. House-to-house survey has been completed in 213 towns.
  2. Town-wise project reports have been prepared for 229 towns.
  3. Under the self-employment component, 20775 applications have been forwarded to banks, out of which 3080 cases have been approved.
  4. Under the Shelter Upgradation Component, 10386 applications have been forwarded to banks/HUDCO, out of which 4743 cases have been approved by HUDCO.
  5. As many as 8382 Neighbourhood Groups, 1200 Neighbourhood Development Committees and 444 Thrift and Credit Societies have been formed.

2.2.5 The performance of the UPAPs in the Eighth Five Year Plan reveals:

  • that although urban poverty is no less severe than rural poverty, the priority accorded to alleviation of urban poverty is low as the common perception is that urban poverty is a transfer of rural poverty into urban areas;
  • that UPAPs are highly fragmented and have overlapping objectives and strategies.
  • that integration of UPAPs with sectoral development and area development programmes has been overlooked.
  • that the role of voluntary organisations and community based organisation in planning and implementation of UPAPs is on the periphery.

2.2.6 The Planning Commission's (Modified Expert Group) estimates of urban poverty show a decline in the percentage of urban poor from 38 percent (1987-88) to 32.36 percent (1993-94). As per the Modified Expert Group the number of urban poor is 763.37 lakh in 1993-94. The Hashim Committee, which was set up to review and rationalise Centrally Sponsored Schemes for poverty alleviation and employment generation, had gone into the question of rationalisation of the existing poverty alleviation programmes and recommended that:-

1. the self-employment component of NRY and PMIUPEP be combined into a single programme valid for all the urban areas all over the country;

  • The Planning Commission’s (modified Expert Group) estimates of urban poverty show a decline in the percentage of urban poor from 38 percent (1987-88) to 32.36 percent (1993-94). As per the Modified Expert Group the number of urban poor is 763.37 lakh in 1993-94.
  • The Hashim Committee, which was set up to review and rationalise Centrally Sponsored Schemes for poverty alleviation and employment generation, had gone into the question of rationalisation of the existing poverty alleviation programmes.
  • Based on the recommendation of the Committee the Swarna Jayanti Shahari Rozgar Yojana (SJSRY) has been launched with effect from 1.12.97 and NRY, PMIUPEP and UBSP have been phased out.
  • The programme has two sub-schemes namely, (a) Urban Self –Employment Programme and (b) Urban Wage Employment Programme. The self-employment and wage employment components of the NRY and PMIUPEP have been re-organised under this single programme. The shelter upgradation components of both NRY and PMIUPEP has been merged with the National Slum Development Programme.

2. the urban wage employment component as well as the physical infrastructure development component under the NRY and the PMIUPEP be merged and be made applicable to all the urban areas with a population less than 5 lakhs. This component may be separated from the self-employment component as a separate scheme with a distinct identity; and

3. the shelter upgradation/housing component under NRY and PMIUPEP be retained either as a separate scheme or merged with the Slum Development/Basic Services Schemes operating at present.

The Swarna Jayanti Shahari Rozgar Yojana (SJSRY):

2.2.7 In pursuance of the above recommendations, during the Ninth Plan it is proposed to launch the Swarna Jayanti Shahari Rozgar Yojana (SJSRY) and phase out NRY, PMIUPEP and UBSP. The SJSRY is to be a Centrally Sponsored Scheme applicable to all the urban areas with expenditure to be shared in ratio 75:25 between the Centre and States/UTs. The programme has become operational on December 1, 1997. This programme would have two sub-schemes, namely, (i) UrbanSelf-Employment Programme and (ii) Urban Wage Employment Programme. The self-employment and wage employment components of the existing NRY and PMIUPEP have been reorganised under this single programme. Further,the shelter upgradation components of both NRY and PMIUPEP will be merged with the National Slum Development Programme.

2.2.8 The Swarna Jayanti Shahari Rozgar Yojana (SJSRY) seek to provide gainful employment to the urban unemployed or underemployed poor by encouraging the setting up of self-employment ventures or provision of wage employment. This programme will rely on the creation of suitable community structures on the UBSP pattern and delivery of inputs under this programme will be through the medium of urban local bodies and similar community institutional structures.

2.2.9 The Swarna Jayanti Shahari Rozgar Yojana rests on the foundation of community empowerment. Towards this end, community organisations like Neighbourhood Groups (NHGs), Neighbourhood Committees (NHCs) and Community Development Societies (CDSs) will be set up in the target areas based on the UBSP pattern. The CDSs will be the focal point for purposes of identification of beneficiaries, preparation of applications, monitoring of recovery and generally providing whatever other support is necessary to the programme. The CDSs will also identify viable projects suitable for that particular area.

2.2.10 These CDSs may also set themselves up as Thrift and Credit Societies to encourage community savings, as also other group activities. A maximum expenditure at the rate of Rs.100 per member for the first year and Rs.75 per member for each subsequent year will be allowed for activities connected with the CDSs.

The Urban Self Employment Programme (USEP):

2.2.11 This programme will have three distinct components:-

  1. assistance to individual urban poor beneficiaries for setting up gainful self-employment ventures.
  2. assistance to groups of urban poor women for setting up gainful self-employment ventures. This sub-scheme may be called "The Scheme for Development of Women and Children in the Urban Areas (DWCUA)".
  3. training of beneficiaries, potential beneficiaries and other persons associated with the urban employment programme for upgradation and acquisition of vocational and entrepreneurial skills.


  1. The programme will be applicable to all urban towns in India.
  2. The programme will be implemented on a whole town basis with special emphasis on urban poor clusters.

Target Groups:

  1. The programme will target the urban poor,i.e those living below the urban poverty line, as defined from time to time.
  2. Special attention will be given to women, persons belonging to Scheduled Castes/Tribes, disabled persons and other such categories as may be indicated by the Government from time to time. The percentage of women beneficiaries under this programme will not be less than 30 per cent. The SCs and STs must be benefited at least to the extent of their proportion in the local population. A special provision of 3 percent will be reserved for the disabled under this programme.
  3. There will not be any minimum educational qualification set for beneficiaries under this programme. However, to avoid an overlap with the PMRY scheme, for self- employment component, this scheme will not apply to beneficiaries educated beyond the IX standard. As regards the wage employment component, there will be no restrictions of educational qualifications whatsoever.
  4. A house-to-house survey for identification of genuine beneficiaries will be undertaken. Non-economic parameters will also be applied to identify the urban poor in addition to the economic criteria of the urban poverty line.

2.2.12 All other conditions being equal, women beneficiaries belonging to women-headed households will be ranked higher in priority than other beneficiaries.


(i) Self-employment through setting up Micro-enterprises and Skill development:

2.2.13 To avoid duplication with the ongoing Prime Minister's Rozgar Yojana (PMRY), this component of SJSRY is confined to the below poverty line beneficiaries who have no education upto ninth standard, with emphasis on those accorded a higher priority on the basis of the non-economic critera. The maximum unit cost will be Rs.50,000 and the maximum allowable subsidy will be 15 percent of the project cost, subject to a limit of Rs.7,500. The beneficiary is required to contribute 5 percent of the project cost as margin money. In case a number of beneficiaries decide to jointly set up a project, such project will be eligible for a subsidy which will be equal to the total of the permitted subsidy per person as per the above criteria. In this case too the provision relating to 5 percent margin money per beneficiary will apply. The overall project cost, which can be permitted, will be the total of the individual project cost allowable per beneficiary.

2.2.14 Skill development through appropriate training is another element of this programme. The unit cost allowed for training will be Rs.2000 per trainee, including material cost, trainers' fees, other miscellaneous expenses to be incurred by the training institution and the monthly stipend to be paid to the trainee. The total training period for skill upgradation may vary from two to six months, subject to a minimum of 300 hours.

2.2.15 Infrastructural support may also be provided to the beneficiaries setting up micro-enterprises in relation to marketing of their products etc.

(ii) Development of Women and Children in Urban Areas (DWCUA):

2.2.16 This scheme is distinguished by the special incentive extended to urban poor women who decide to set up self-employment ventures as a group as opposed to individual effort. Groups of urban poor women will take up an economic activity suited to their skill, training, aptitude and local conditions. Besides generation of income, this group strategy will strive to empower the urban poor women by making them independent as also providing a facilitating atmosphere for self-employment. To be eligible for subsidy under this scheme, the DWCUA group should consist of at least 10 urban poor women.

Financial Pattern

2.2.17 The DWCUA group society will be entitled to a subsidy of Rs.1,25,000 or 50% of the cost of project whichever is less.

2.2.18 Where the DWCUA group sets itself up as a Thrift and Credit Society, in addition to its other entrepreneurial activity, the group/Thrift and Credit society will also be entitled to a lump sum grant of Rs.25,000 as a revolving fund at the rate of Rs.1000 maximum per member. This revolving fund will be available to a simple Thrift and Credit Society also even if the society is not engaged in any project activity under DWCUA.

The Urban Wage Employment Programme (UWEP):

2.2.19 This programme seeks to provide wage employment to beneficiaries living below the poverty line within the jurisdiction of urban local bodies by utilising their labour for construction of socially and economically useful public assets.

2.2.20 This programme will apply to urban local bodies, the population of which is less than 5 lakhs as per the 1991 Census.

2.2.21 The material-labour ratio for works under this programme will be maintained at 60:40. The prevailing minimum wage rate, as notified from time to time for each area, will be paid to the beneficiaries under this programme.

2.2.22 This programme will be dovetailed with the State sector EIUS scheme as well as the National Slum Development Programme (NSDP). This programme is not designed to either replace or substitute the Environmental Improvement Of Urban Slums (EIUS), the NSDP, or any other State sector schemes.

Project Administration :

2.2.23 At the community level, a Community Organiser(CO) will be appointed for about 2000 identified families. The Community Organiser should, as far as practicable, be a woman.

2.2.24 At the town level, there will be an Urban Poverty Eradication Cell under the charge of a Project Officer. The Project Officer will be responsible for coordinating the activities of all the CDSs and COs.

2.2.25 At the district level, the State Government will constitute a District Urban Development Agency (DUDA) with an officer designated as the District Project Officer.

2.2.26 At the State level, there will be a State Urban Development Authority (SUDA), which will be headed by a full-time senior officer of the State Government. The SUDA will be designated as the State Nodal Agency for urban anti poverty programmes.

2.2.27 At the national level, the Department of Urban Employment and Poverty Alleviation will be the nodal department. The programme will be monitored and overseen by the UPA Division.

2.2.28 The Ninth Plan, in particular, needs to focus on the effective implementation and management of urban poverty alleviation programmes (UPAPs). Targetting of urban poor is essential for the success of any anti-poverty programme. Therefore, the UPAPs should be designed to accomodate flexibility in operation. The key components of the Ninth Plan strategy would be:

  • effective targetting using either a self-identification system or a selection process by institutions responsible for financing and managing UPAPs as faulty targetting will enhance income inequalities.
  • a "bottom up" approach should be adopted for UPAPs which should be routed through community based organi- sations. There should be effective participation of community institutions for extending loans and for aiding loan recoveries made under UPAPs.
  • since the problem of urban poverty is a manifestation of the higher incidence of marginal and low income employment in the informal sector, it is essential to upgrade informal sector occupations. Hence there is a need for emphasis on generation of self-employment in processing and services sector, improving the acccess to technology and credit and above all improving the general legal and physical environment which governs the working of the informal sector.

2.2.29 The policy framework adopted by the Government of India also mentions that "a frontal attack on poverty is an important element in development policy. This is the main rationale for anti-poverty programmes".

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