States seek urgent funds to sustain women livelihood mission, no word on NULM 2.0 yet

AT LEAST five states cutting across party lines have written to the Centre warning that lack of clarity over financial support to the flagship urban livelihood mission, which has benefited more than one crore women over the last decade, will adversely impact social protection of the urban poor.

Tamilaga Vettri Kazhagam-ruled Tamil Nadu, Congress-governed Karnataka and BJP-led Maharashtra, Madhya Pradesh and Tripura have, in separate letters, told Prime Minister Narendra Modi and the Ministry of Housing and Urban Affairs (MoHUA) that a pause in funding will disrupt bank linkages and access to institutional credit.

In their letters, the states have sought the release of funds under the scheme, with Tamil Nadu demanding Rs 350 crore, Maharashtra Rs 81 crore, Madhya Pradesh Rs 101 crore and Tripura Rs 6.5 crore, among others.

The Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM), ran from 2014 until October 2024, creating over 10 lakh women’s self-help groups. After that, 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.

With the new scheme in limbo, Tamil Nadu Chief Minister C Joseph Vijay wrote to the Prime Minister on August 27 and noted that Chennai and Tiruppur were selected for the pilot from Tamil Nadu. “During the pilot period, around 1.26 lakh vulnerable occupational families have been identified and profiled and about 2,500 self help groups have been formed, creating a strong foundation for scaling up the programme. Further, the Ministry has advised all states to retain the existing Mission structure and workforce so as to ensure continuity of services and uninterrupted support to beneficiaries,” he wrote.

Tamil Nadu has 1.72 lakh self-help groups with 18.70 lakh members under the National Urban Livelihood Mission. Vijay pointed out that NULM funds in the state had been completely exhausted as of April 2025.

“Promotion of the self-help group activities in urban areas is indispensable for realising the objectives of the Urban Livelihood Mission and ensuring sustainable livelihood opportunities, financial inclusion and social protection for the urban poor. The proposed assistance would also enable the states to sustain the existing urban livelihood ecosystem, protect and strengthen the community institutions already created, and ensure continuity of essential Mission personnel and services,” Vijay wrote, seeking Rs 350 crore for 2026-27.

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Tripura Chief Minister Manik Saha wrote to Housing and Urban Affairs Minister Manohar Lal on September 11 on the “critical financial situation affecting the implementation of the Tripura Urban Livelihoods Mission (TULM)”. TULM had played an important role in the “socio-economic empowerment of the urban poor, particularly women” through self-help groups, area-level federations, community resource persons and bank sakhis, he said, adding no fresh funds had been received from MoHUA in the past two years.

“This financial constraint is seriously affecting the grassroots beneficiaries and the overall livelihood economy of Tripura. Lack of financial support to TULM may also disrupt bank linkage and access to institutional credit, resulting in the deterioration of the community-level institutional structure created over several years. Consequently, the benefits, outcomes, and progress already achieved through the Mission may be severely undermined,” Saha said, requesting release of NULM funds.

In July, the Tripura government had written to MoHUA seeking Rs 6.50 crore in committed liabilities, saying that a total of 6,796 self help groups were formed in the state under NULM. These groups were working in mid-day meal services, canteen operations, school uniform stitching, municipal service delivery etc, it said.

Maharashtra’s state mission wrote to MoHUA on September 29 seeking release of Rs 80.99 crore as Central share “so as to pay off previous dues and start new scheme afresh”. It said the ministry had asked states to expand DJAY-S scheme and directed that the scheme be implemented from October 1, 2024, onwards on pilot basis. It said Maharashtra last received funds in March 2024 for NULM, which it had already exhausted. “As a result, we are facing an acute financial crunch. Staff remuneration, interest subvention and revolving funds liabilities are constantly piling up every month,” the state mission wrote.

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Madhya Pradesh too wrote to the MoHUA on September 7 seeking release of Rs 101 crore, particularly Rs 13.71 crore for interest subsidy under the self-employment programme of NULM. “The interest subsidy mechanism was linked to the bank loans and was intended to provide continuing relief to eligible beneficiaries during the applicable loan period… The closure/ non-extension of the scheme does not automatically extinguish the financial obligations relating to eligible interest subsidy accrued on loans sanctioned under the scheme. The beneficiaries continue to service their bank loans, and in several cases the loan tenure extends beyond the date of closure of DAY-NULM,” the MP government wrote.

“Failure to settle these committed interest subsidy liabilities may adversely affect beneficiaries who had availed bank credit in good faith under a Government-supported livelihood programme,” the state said.

Karnataka wrote on September 6 to MoHUA seeking clarity if the state can use the amount released for the pilot scheme, Rs 4.48 crore in case of Bengaluru, for “payment of staff salary”.  “…no funds are currently available to disburse salaries from July 2025 onwards…In view of the ongoing fund shortage impacting implementation at the field level, we seek guidance from the Ministry on utilizing the pilot implementation fund for payment of staff salary,” Karnataka sought to know.

Though the scheme had ended and the pilot project started in 25 cities in 13 states, the Ministry had written to all states/UTs on December 4, 2024 saying that “in-principle approval” of the Department of Expenditure had been received to expand the pilot to all states and UTs. The remaining states were asked to prepare action plans for the smooth transition to the new scheme to be rolled out.

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“Further, the existing administrative structure in the States/ UTs may be retained for ensuring continuity in beneficiary support and transition to new Mission. The cost of human resources must be must be met from own resources of ULBs [urban local bodies] and/or already approved…funds available with the state under schemes of MoHUA…Expenditure incurrent on administrative structure and implementation by States/UTs during pilot/transition period from 1st October 2024 till approval of new Mission shall be proposed for recoupment under the new Mission,” the letter said.

According to the MoHUA source, states were responsible for recruiting support staff for the functioning of the scheme, as per the operational guidelines under NULM. “Presently, various ongoing Missions such as PMSVANidhi and State government programmes have leveraged this existing staff,” the source said.

When it comes to the self-help groups, the source said these groups were now being “leveraged by various ongoing missions of the government of India such as Pradhan Mantri Awas Yojana, Swachh Bharat Mission, AMRUT, and PM Surya Ghar: Muft Bijli Yojana”.

Explained

Mission covers nearly 1 cr women

NULM led to the creation of 10.02 lakh self-help groups, covering nearly 1 crore women across cities. The scheme provided the groups with a revolving fund of Rs 10,000 each, as well as training, interest subvention for bank loans and help in setting up micro enterprises.

MoHUA sources said around Rs 9,000 crore was spent by the Centre and states in the 10-year NULM period. In the pilot scheme, 25 cities across 13 states were selected. “There is no pendency of any demand from any state. Due to various such government schemes, 24.82 crore Indians have escaped Multidimensional Poverty in last 9 years, as per NITI Aayog, 2024. Based on the learnings of the pilot initiative and emerging opportunities in urban sectors, new contours of a livelihood programme are being discussed and explored,” the source said.

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“Presently, over 1.5 lakh SHG women are engaged with Swachh Bharat Mission and 50,000 SHGs women as AMRUT Mitra. Some of the SHGs have been mapped with One District One Product and efforts are being taken to support them under the program through convergence. Similarly, around 38,000 SHGs have been supported under Pradhan Mantri Formalization of Micro Food Processing Enterprises scheme. Therefore, the Ministry is constantly working to involve SHGs in urban areas through various ongoing schemes,” the source said.

Started in 2014 as the successor to the UPA-era Swarna Jayanti Shahari Rozgar Yojana, NULM led to the creation of 10.02 lakh self-help groups, covering about 1 crore women across cities. The scheme provided the groups with a revolving fund of Rs.10,000 each, as well as training, interest subvention for bank loans and help in setting up micro enterprises.

While DAY-NULM’s target beneficiaries were the urban poor, particularly women, the pilot had focused on six “vulnerable occupational groups” – gig workers, transportation workers, construction workers, waste workers, care workers and domestic workers.

In a reply in the Rajya Sabha in February this year, MoHUA had stated: “Under the Mission, as on September 30, 2024, over 1 crore urban poor women brought into Self Help Groups (SHGs) fold, over 39.43 lakh livelihoods created through skill training & placement, access to subsidized credit to individual and groups for setting up micro-enterprises and saving corpus-based bank linkages to SHGs, over 6.56 lakh SHGs received bank linkage.”