UPSC Darpan

SocietyGS114 October 2026

Urban livelihood mission DAY-NULM lapses with no successor as five States plead for funds

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The news

New Delhi. At least five States across parties — Tamil Nadu, Karnataka, Maharashtra, Madhya Pradesh and Tripura — have told the Prime Minister and the Ministry of Housing and Urban Affairs (MoHUA) that a funding pause in the urban livelihood mission will disrupt bank linkages for the urban poor, The Indian Express reports. Tamil Nadu seeks ₹350 crore for 2026-27, Madhya Pradesh ₹101 crore (₹13.71 crore for interest subsidy on running loans), Maharashtra ₹80.99 crore and Tripura ₹6.5 crore. Karnataka asked whether it may use pilot money, ₹4.48 crore for Bengaluru, to pay staff unpaid since July 2025. Per a Lok Sabha reply of April 2025, the mission ended on 30 September 2024 and a 25-city pilot ran from 1 October 2024 to 31 March 2025. Sources say the new scheme is “no longer under consideration”; a MoHUA source says “new contours” are being explored.

The chain in one line: Mission ends with no approved successor → central funds stop → organisers go unpaid and subsidy dues pile up → SHG bank links weaken → urban women lose their first rung of credit

Static syllabus linkage

  1. Urban poverty alleviation is a municipal subject. The 74th Amendment (1992) added Article 243W and the Twelfth Schedule, whose entry 11 is “urban poverty alleviation”.
  2. A long line of urban employment schemes. DAY-NULM succeeded the Swarna Jayanti Shahari Rozgar Yojana (1997). Per MoHUA, by September 2024 the Centre had released ₹5,733.10 crore and the mission had formed 10,02,545 SHGs.

Why UPSC loves this

  1. Can welfare built on women’s collectives survive a gap between two schemes?. GS2 lists “welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes”. Expect SHGs as a credit tool, scheme continuity and Centre–State funding, and how urban poverty is counted.

Prelims nuggets

  • DAY-NULM was run by the Ministry of Housing and Urban Affairs; its rural counterpart DAY-NRLM is run by the Ministry of Rural Development.
  • “Urban poverty alleviation” is entry 11 of the Twelfth Schedule (74th Amendment, 1992).
  • The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014 (Section 22) provides for a Town Vending Committee in each local authority, chaired by the Municipal Commissioner or CEO and constituted under rules made by the appropriate Government.

Analysis

  1. A scheme gap costs more than it saves, because SHG trust takes years to build and weeks to lose. Banks lend because an organiser checks the books and the government shares the interest; remove both and lending slows. Only 6,42,207 of 10,02,545 groups were bank-linked by September 2024 (MoHUA), so a third had not yet reached credit. Madhya Pradesh warns that loans outlive the mission, so unpaid subsidy hurts those who borrowed “in good faith”. The other view, from MoHUA: groups now work under Swachh Bharat (1.5 lakh women) and PMFME (about 38,000 groups). That gives them work, not a credit pipeline.
  2. Lens — Federal: when a CSS lapses, States inherit its staff and its debts. MoHUA’s letter of 4 December 2024 told States to keep mission staff on their own funds and claim the cost back “under the new Mission”. With that mission doubtful, recoupment has no vehicle: Karnataka has had no salary money since July 2025 and Maharashtra last got funds in March 2024. The other view: urban poverty is a Twelfth Schedule subject, so States can run it themselves. That holds for rich States; Tripura (6,796 groups) has had no fresh funds in two years.
  3. Urban poverty is counted less carefully than rural, so it is easier to wind down. Migrants, renters and vendors slip past household surveys. MoHUA cites NITI Aayog: 24.82 crore people left multidimensional poverty in nine years. But that index counts schooling, health and housing, not insecure income or eviction. The Planning Commission’s 2012 expert group under S.R. Hashim proposed identifying the urban poor by residential, social and occupational vulnerability; Tamil Nadu’s pilot profiled 1.26 lakh “vulnerable occupational families”. Cities do raise incomes, but only on average.

Possible Mains question

Self-help groups need continuity more than money. Examine this in the context of the lapse of DAY-NULM and its impact on the urban poor. (15 marks, 250 words)

Model approach

  1. Directive — Examine. Test the claim with evidence; reach a view.
  2. Introduction — a mission that built ten lakh groups ends without a successor. Sample: DAY-NULM formed over ten lakh urban women’s SHGs; since it ended in 2024, five States warn their bank linkages are at risk.
  3. Body — SHG credit rests on an organiser, a subsidy and time, not a one-time grant. Value addition: 6,42,207 of 10,02,545 groups bank-linked. Draw a ladder: savings → revolving fund → first bank loan → enterprise.
  4. Body — a lapse leaves committed liabilities with States and borrowers. Madhya Pradesh’s ₹13.71 crore subsidy dues; Karnataka’s unpaid staff; the December 2024 recoupment promise.
  5. Body — convergence absorbs groups but does not replace the mission. Swachh Bharat and PMFME employ, not form, groups.
  6. Body — urban poverty is under-identified. The MPI misses income and eviction risk; cite the Hashim group’s vulnerability approach.
  7. Conclusion — MoHUA settles dues, then launches a lean successor. Sample: MoHUA must first clear the dues it promised to recoup and then notify a lean NULM 2.0, so that a woman’s first loan does not depend on a budget cycle.

Administrator's brainstorm

As Municipal Commissioner, your city’s livelihood mission staff have gone unpaid for months and SHG leaders say banks are slowing loans. What do you do?

My options: let the staff go, keep them unpaid, or pay a core team from the corporation’s funds. Letting them go breaks groups mid-loan. I would keep the core community organisers on the city’s own funds, as MoHUA’s December 2024 letter allowed, account for every rupee for recoupment, and send the State mission the liability figure. I would also give groups municipal work, such as canteens and sanitation. The stakeholders are SHG women, staff, banks and the city’s finances. The deciding principle: a government promise to borrowers must hold while the paperwork is pending.