Funding Delays and Uncertainty Over Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM)

Key Highlights & Summary 

• States Demand Fund Release: Five states—Tamil Nadu, Maharashtra, Madhya Pradesh, Karnataka, and Tripura—have urged the Centre to release pending funds for urban livelihoods to prevent disruption in grassroots social protection. 

• Impact on Women Self-Help Groups (SHGs): DAY-NULM enabled the creation of over 10.02 lakh SHGs, benefiting nearly 1 crore urban poor women over the last decade through credit linkages, interest subventions, and skill training.

• Transition and Scheme Limbo: The scheme ran from 2014 to October 2024, followed by a pilot project—Deendayal Jan Aajeevika Yojana - Shehari (DJAY-S)—ending December 2025, leaving NULM 2.0 uncertain.  

• Committed Liabilities & Staff Salaries: States report severe financial distress in covering committed interest subsidies for bank loans and disbursing salaries to mission personnel. 

• Disruption of Institutional Credit: Non-release of funds threatens bank linkages, interest subvention mechanisms, and community support structures created over years.  

• Inter-Scheme Convergence: The Ministry of Housing and Urban Affairs (MoHUA) highlighted that SHG cadres are being leveraged across other schemes such as PMAY, Swachh Bharat Mission, AMRUT, and PM Surya Ghar.  

Essential Definitions  

• Deendayal Antyodaya Yojana-NULM: A flagship Centrally Sponsored Scheme under MoHUA aimed at reducing poverty and vulnerability of urban poor households by enabling access to selfemployment and skilled wage opportunities.  

• Interest Subvention: A concession on the interest rate provided by the government to lower the cost of bank loans for beneficiaries, ensuring financial inclusion.  3. Proposed Reforms in National Competitive Examinations and Systemic Integrity 

• Self-Help Group (SHG) Bank Linkage: A financial model connecting informal affinity groups of urban/rural poor with commercial banks to build credit history and access micro-finance.  

Legal and Constitutional Framework 

• Article 39(e) & (f) (Directive Principles of State Policy): Directs the State to secure economic security, protect workers, and offer opportunities for healthy development of citizens. 

• Article 243W (12th Schedule): Envisages powers and responsibilities of Urban Local Bodies (ULBs) regarding urban poverty alleviation and socio-economic development. 

• Fiscal Federalism Principles: Governs financial relations between the Centre and States regarding fund transfers for Centrally Sponsored Schemes (CSS) under Article 282. 

Conclusion Sustained financial backing and structural clarity regarding NULM 2.0 are essential to preserve the socio-economic empowerment gains of urban poor women. Streamlining fund disbursement and strengthening institutional convergence will protect grassroots livelihoods and secure urban poverty alleviation goals.  

UPSC Relevance 

• GS Paper II (Polity & Governance): Issues and challenges pertaining to federal structure, scheme implementation, and welfare schemes for vulnerable sections. 

• GS Paper III (Indian Economy & Development): Urbanization challenges, poverty alleviation mechanisms, financial inclusion, inclusive growth, and employment generation models.