Holistic Livelihood Support for Urban Informal Workers
The government is preparing a comprehensive Urban Workers Socio-Economic Upliftment Programme aimed at supporting nearly 2 crore urban informal workers through a mix of credit, skilling, and market access.
Under the scheme, 5 lakh first-time entrepreneurs from women, SC/ST, and marginalised communities will be eligible for loans up to ₹2 crore, supported by enhancements under the MUDRA framework. Beneficiaries will also receive skill vouchers worth ₹50,000, enabling training in business management, digital tools, and sector-specific capabilities.
To ensure demand linkage, enterprises will be onboarded onto GeM, expanding procurement access for products and services. Priority sectors include food processing, apparel manufacturing, and homestays, aligned with urban employment intensity and MSME scalability.
Urban Infrastructure and Connectivity Push
Complementing livelihood support, a ₹1 lakh crore Urban Challenge Fund has been proposed to accelerate urban infrastructure creation. The fund will finance up to 25% of eligible PPP projects in areas such as water supply, sanitation, housing redevelopment, and urban mobility, with the remaining 50% mobilised through banks and bond markets.
To incentivise state participation, an additional 0.5% of GSDP borrowing headroom will be provided to states implementing power sector reforms, ensuring reliable energy supply for urban economic hubs and MSME clusters.
Inclusive Growth and Employment Impact
The programme is projected to lift nearly 10 million urban households above the poverty line, while generating ₹5 lakh crore in incremental economic activity over the medium term. A strong focus on women-led enterprises and Self-Help Group (SHG) federations aims to push female workforce participation to nearly 70% in targeted urban clusters.
Policymakers view the initiative as a critical step toward formalising urban informal labour, strengthening MSME-led job creation, and building resilient city economies aligned with inclusive growth goals.
