Summary
At least five states - TVK-ruled Tamil Nadu, Congress-ruled Karnataka and BJP-ruled Maharashtra, Madhya Pradesh and Tripura - have written to the Centre between July and September 2026 seeking funds for urban livelihood work.
The Deendayal Antyodaya Yojana-National Urban Livelihoods Mission closed on 30 September 2024 and a pilot meant to bridge the gap ended in December 2025. Over its life, the mission built 10.02 lakh women's self-help groups covering about one crore members.
According to sources cited by The Indian Express, the successor scheme is no longer under consideration. The states are left holding staff salaries, interest subsidy on loans still being repaid and revolving-fund dues. Because the complaints cross party lines, this is not a partisan quarrel.
It exposes a design flaw: centrally sponsored schemes that can end without any rule for settling the obligations they created.
WHY IT MATTERS FOR UPSC & STATE PCS
The Indian Express reported on 13 October 2026 that Tamil Nadu, Karnataka, Maharashtra, Madhya Pradesh and Tripura had written to the Prime Minister and the Ministry of Housing and Urban Affairs. They warned that the funding gap after DAY-NULM threatens the bank linkages and credit access of urban women's self-help groups. Ministry sources were reported as saying no state demand is pending.
Standard News
The Mission Closed on Time
- Its Promises Did Not A government scheme is easy to start and easy to end. What it promises in between is harder to close. DAY-NULM ended on 30 September 2024. The obligations it created did not end with it:
- interest subsidy on loans that women are still repaying; - revolving funds owed to self-help groups; - salaries of mission staff the states recruited to run it. The scheme had a closing date. It had no rule for who settles what was still owed on that date.
What the
Constitution assigns and what it does not The text is revealing. The Twelfth Schedule lists urban poverty alleviation as Entry 11, a municipal function. But Article 243W, which links that list to municipalities, is permissive: a State Legislature may endow municipalities with these powers.
Nothing obliges it to and nothing obliges anyone to fund them. In practice, then, urban poverty has been municipal on paper and central in money. The Centre designs a mission, pays its share and sets its end date. States and cities deliver it, hire its staff and sign up its beneficiaries.
When the Centre's share stops, the obligations stay at the bottom of that chain.
What the letters show The demands are specific:
- Tamil Nadu sought ₹350 crore for 2026-27. It has 1.72 lakh SHGs with 18.70 lakh members and its mission funds ran out by April 2025.
- Madhya Pradesh sought ₹101 crore, including ₹13.71 crore for interest subsidy. It argued that closing a scheme does not cancel subsidy owed on loans still being repaid.
- Maharashtra sought ₹80.99 crore, having last received mission funds in March 2024.
- Tripura sought ₹6.50 crore in committed liabilities for 6,796 SHGs.
- Karnataka asked whether ₹4.48 crore released for the Bengaluru pilot could pay staff unpaid since July 2025. These come from states ruled by three different parties. That removes the usual partisan reading. This is not opposition states complaining about the Centre. It is a design problem every state has met. The Centre's position, as reported through ministry sources, is that states recruited the staff, that those staff now serve other missions such as PM SVANidhi and that no demand is pending. Ministry sources also say SHG women now work across other urban missions - over 1.5 lakh with Swachh Bharat and 50,000 as AMRUT Mitras. That is real redeployment. It does not, however, pay the interest subsidy on a loan taken in 2023.
The design flaw A sunset clause tells a scheme when to stop.
It should also say who completes its unfinished business. DAY-NULM's closure had the first and lacked the second. A December 2024 ministry letter reportedly asked states to keep staff and claim back transition-period spending under a future mission. Sources now say that mission is no longer under consideration.
Quick Facts
Key numbers & takeaways — revise these first
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DAY-NULM ran from 1 April 2014 to 30 September 2024, succeeding the Swarna Jayanti Shahari Rozgar Yojana.
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The mission created 10.02 lakh urban self-help groups covering about one crore women.
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Each SHG received a revolving fund of ₹10,000.
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Total spending over the mission's life was ₹8,838.71 crore, including a Central share of ₹5,733.13 crore.
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The mission facilitated ₹72,518 crore in subsidised bank loans for micro-enterprises.
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The Deendayal Jan Aajeevika Yojana-Shehari pilot ran from October 2024 to December 2025 in 25 cities across 13 states.
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Tamil Nadu sought ₹350 crore for 2026-27 and Madhya Pradesh sought ₹101 crore, including ₹13.71 crore for interest subsidy.
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Urban poverty alleviation is Entry 11 in the Twelfth Schedule of the Constitution.
Connect the dots for your UPSC preparation.
Standard news covers the event. Log in to read our comprehensive analysis and uncover the hidden constitutional, structural, and ethical dimensions of this topic:
Why Article 243W's word "may" leaves urban poverty alleviation constitutionally municipal but fiscally dependent on central missions.
The four structural causes behind stranded liabilities, from fixed sunset dates to state-recruited staff tied to central funding.
How Kerala's Kudumbashree survives funding cycles by being rooted in local government and what a national model could borrow from it.
A concrete transition-clause design for centrally sponsored schemes, covering live loans, staff and revolving funds.
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