Unemployment allowance
Topic: Employment, Unemployment and Informalisation · NCERT: Class 10, Ch 2 "Sectors of the Indian Economy"
Meaning
An unemployment allowance is cash the government must pay a person who applied for guaranteed work but did not get it on time. It turns the promise of work into a legal right, because the state pays a penalty for failing. Under MGNREGA (2005), work must be given within 15 days of applying. If it is not, the allowance is at least one-quarter of the wage for the first 30 days and at least one-half of the wage after that. The 2025 replacement law, VB-G RAM G, keeps the allowance.
Example
A rural household in Rajasthan applies for MGNREGA work. If no work is given within 15 days, the state must pay the household at least a quarter of the daily wage for each day without work, and at least half after 30 days.
Don't confuse with
- Unemployment benefit in rich countries: that is paid to people who have lost a job, often from an insurance fund. India's allowance is paid only when the state fails to give work that a person demanded under a job guarantee law.
Related concepts
- Employment generation
- Direct and indirect employment generation
- Employment generation programmes
- Green jobs
- Right to work
- Wage employment guarantee