Reverse Migration

"Epidemics are not random events that can afflict societies capriciously and without warning" 

says historian Frank Snowden in his book Epidemics and Society. On the contrary, every society produces its own specific vulnerabilities.

The critical vulnerabilities of Indian society, that the Covid-19 has exposed is one of the worst humanitarian crisis the country has ever faced since independence, started with the 4- hour notice for a complete shutdown of the economy. The appalling details of the suffering by masses of the uprooted people lacking access to shelter, food or sources of income or even means of transport to take them back to their native places, depict the subhuman condition for a vast majority of the working class in the country at this hour. The shearing images of the endless ordeal of thousands of famished and exhausted “migrant workers” trying to make their way back to their home to escape starvation in cities will endure long even after the pandemic is over. Lockdown has dealt a body blow to their insecure and fragile urban livelihoods and many of them also faced imminent eviction. With public transportation not in force many began their long journeys on foot over distances that could span hundreds of miles. A large number of them died of heat, exhaustion and starvation; and quite a few were killed in horrific accidents. 

Why People Migrate?

 

Migrant workers are a part of the informal workforce which is 93% of aggregate labour force having hardly an access to the benefits in the formal organised sectors. Barring abnormal times, which includes current circumstances, the major part of the migrant labour flows in India has mostly been from rural to urban areas. Interstate migration for better employment, better wages and better standard of living has been an integral part of the humdrum existence of millions of landless and asset less poor for generations. As described by P Sianath migrants include the categories of people who migrate on permanent basis(having no plan to return); seasonal migrants (who temporarily return from urban to rural during the harvest and then go back to urban centres) and finally the footloose (hired from rural areas by contractors) who move from city to city in search of their livelihood. This usual pattern of migration, which pushes people from rural to urban areas can be described as ‘mobility by default. According to Harris-Todaro, migration proceeds in response to rural-urban differences in expected income rather than actual earnings and they tend to migrate if expected urban wage is greater that the actual rural wage including the cost of migration.

The reasons behind this include growing rural distress with agriculture and inadequate official policies to support the ailing rural poverty. Migration has also been facilitated by the prevailing familial links.

What is reverse migration & why is reverse migration taking place?

 

Migration from rural to urban areas is a key in any country’s development. But a shock such as Covid-19 puts the migrants in a vulnerable situation in which reverse migration might seem to be the least coping mechanism available to them. The current flow of reverse migration (a situation when labourers, workers, and people start migrating back to their native place in the backdrop of non-availability of livelihood and job opportunities) in India, which is from urban to rural doesn’t fall into the usual pattern of migration. Miles away from their villages the migrants were facing extreme financial crunch as the pandemic has rendered them jobless and the only path that was open to them was to return home. So, when thousands of migrants rushed to catch trains it led to chaos and confusion and opened up several issues. There is no doubt that the sheer size of this movement of workforce will have an immense impact on the urban economies and will lead to an increase in poverty, inequity and discrimination. Akhand Kumar,32, has been on a foot march from Ludhiana in Punjab to Allahabad in Uttar Pradesh for 14 days along with his wife and his kids. They have been surviving on water, biscuits and the food they got due to the kindness of others. Kumar worked at a textile factory earning Rs 10,000 per month and had been living in Ludhiana for the past 12 years. But the sudden lockdown forced him to return to his village in order to feed his family. There are thousands of migrant labourers like Kumar who have been forced to take an unprecedented journey after a lockdown was imposed. “In a recent note, Crisil estimates that India has a workforce of 46.5 crore individuals. Of this, around 41.5 crore individuals work in the informal sector of the economy, where no social benefits are available. This is why the lockdown has been so difficult for a large section of the population, said economist and author Vivek Kaul.

Are there any jobs for them in the rural sector? Will they return?

Rural India is highly dependent on the agricultural sector which is over-burdened and over populated with an underemployed working population. Its excessive reliance on agriculture and the lack diversified economic structure makes it tough to create alternative sources of income. Due to the current circumstances of nationwide lockdown thousands of migrants are returning to their villages which will lead to a sudden spike in the number if engaged in one mode of subsistence and it will be an impossible situation to provide jobs, food to millions of workers going home. It is likely that reverse migration is temporary and will return to normal once the threat of the pandemic is receded. However, it is impossible for rural India to match wage expectations of inter-state migrants and as India continues to develop there will be an increase in the job opportunities which will lead more migration from rural to urban areas.

How it can affect the economy?

Migrants workers are mainly hand-to-mouth consumer earning subsistence earning and they spend a large part of their income in the economy. This creates a separate level of demand which will likely to exit. As a consumer they are a part of an informal economy which generates and sustain volumes for the FMCG industries, which will take a blow due to reverse migration. Reverse migration may delay a part of interstate migrant workers returning to their workplace which in turn may create labour shortages and thereby further hinder an economic recovery. The lack of demand from them and the mini economies they sustain implies that forward and backward linkages to the formal sector will be weakened. Maharashtra, Delhi, Punjab are the most vulnerable states as these states attract migrant workers the most. Since sectors like transport, hospitality, construction and service sector mainly employ a higher proportion of them, they are more likely to be hit. Migrants also tend to have a high marginal propensity to consume and reverse migration will dent on consumption which will be disastrous for the economy as a whole. Meanwhile, rural distress is set to increase as the workforce which has returned to villages would put a huge burden on the already-crumbling rural economy. Reverse migration is likely to speed up the spreading of the virus as when migrants flee from the city, they not only lose jobs but also, they carry the infections to their native places which will make the situation even worse.

Way out!

These migrants are mainly a voiceless community and there is no one to raise their voice for them. Someone has to take the responsibility and it can be none better than the government. They government should bring in a road-map of how they are going to employ such a large number of migrants who have returned their homes. It is the perfect time to revamp schemes like MGNREGA and relocate the budget for them. Sectors like agriculture and industry-based agriculture should be given priority in order to provide them proper jobs. According to many this is an opportune for the government to uplift the rural economy since the workforce has returned but it would also have some consequences as well for the society. 

The people who have returned are the ones who actually run the society. There has to be a holistic approach for the migrant labourers and stress should be given on the rural economy else the economy will collapse as stated by the father of the nation Mahatma Gandhi “India does not live in its towns but in its villages”.  

MIGRATORY DILEMMAS

As the monsoon clouds enveloped Kerala, thousands of workers from across India were migrating to their villages. Even though they had been surviving on daily wages, May is the month they would normally return to their original—and seasonal— source of livelihood: farming.

On the contrary, India’s monsoon season has begun with a deluge of woes—for workers, farmers and farming. And this is going to be the most devastating spill over of the covid-19 pandemic.

Amid the lockdown—India’s 68 days is the longest in the world—the country not only reported a consistent rise in covid-19 cases, it also willingly reconciled to live with the virus. By May 31, most of the restrictions were lifted but gave rise to another crisis of a much bigger scale.

Forced Migration

For the past few months, millions of workers were forced to return to their villages. But this was not the usual monsoon reverse migration; they were left unemployed due to the cessation of economic activities in cities and towns. It was found there were more people on the roads than in the villages.

According to the report collected by officials travelling with the migrant workers, it was seen that around 31,424 migrants between April 11 and May 20 returned to their villages. Of the 24,681 stranded adults, 37 per cent were daily-wage earners, followed by industrial labourers such as construction workers (30 per cent), farm labourers (26 per cent), and labourers employed in the service sector (7 per cent).

It is estimated that 100 million workers have moved away from

urban areas in these two months. Hence making it the largest

movement of people in India’s history. But it is also the most disruptive economic development. India’s villages were already economically weak, forcing people to migrate to towns and cities for livelihood. Now, with millions returning to the villages, an urgent expansion of the rural economy is required to sustain this transition.

To begin with, each of these workers has a family to sustain.

Together, these informal workers contribute around 10 per cent to India’s GDP. With this the agriculture sector’s contribution

to GDP is 15-16 per cent; which also primarily comes from these workers.

Putting together, these workers decide the economic fate of the country.

The challenge now is how to reinvent an economy of such scale

immediately to sustain the homecoming workers.

For instance, since January unseasonal rains and extreme

weather condition resulted in the damage of the winter cash crops. Due to a low demand in the markets, farmers were not even earning a fair price for their produce, thus taking a further cut in their meagre earnings. Around 100 million informal workers in India have returned to their villages due to job loss because of the lockdown. 

DISPLACED PEOPLE, MISPLACED MINDSET

 Internal displacements because of disasters like cyclones and floods are common in India. There were more than 5 million new displacements in 2019—the most in the world—according to Geneva based Internal Displacement Monitoring Centre (idmc). And the bulk of the displacements were triggered by extreme weather events that are linked to climate change. In terms of scale, India saw the wettest monsoon in 25 years in 2019, which triggered 2.6 million new displacements. Cyclone Fani was responsible for another 1.8 million new displacements in the same year. Similar trend was noticed as the Cyclone Amphan swallowed around 80 individuals and causing a severe level of destruction.

However, the lockdown—coinciding with the harvesting season for winter crops—means that the farmers are losing a significant chunk of their earnings. More than half the farmers who harvested their crops this year suffered a lower yield during the nationwide lockdown, compared to the last season of sowing the same crop, says the survey of 1,500 farmers in 200 districts across 12 states. The lockdown also forced 55 per cent of farmers to store their crops as they were unable to sell them.

The top six industrialised states in India, which account about 60 of industrial output, have been severely affected by the covid-19 lockdown. These are the states that have reported the maximum outflow of workers. This means that employment generation would be very difficult in these states in the near future.

So we can easily say that as the COVID-19 (Coronavirus) pandemic continues to have widespread impacts on workforces globally, migrant workers are among those bearing the brunt of the crisis.

Komal Wahi for Ecobuzz

Does Indian economy have the potential to rebound fast after the COVID-19 crisis – The way forward.

“When we are aware of our inner growth potential yet have no pretentions about ourselves,when we are vulnerable, then we can change.”                                                                                                 – Amit Goswami

Undoubtedly, India needs strong leadership & effective planning to strengthen its economy. The crisis turned a lot of tables. Some countries emerged as the new global powers in terms of technology and resources whereas some countries lost their hold and global authority. The pandemic also taught us the importance of developed infrastructure and healthcare facilities. The factors of growth are in favor of India. India has a huge labor force consisting of 500  and a well-established consumer market. These factors are enough to recover after a global pandemic. The recovery of our economy dwells upon the productiveness and the health of our population. 

India must focus on a planned and systematic recovery process that starts with- defeating COVID-19, Calculating and analyzing the social and economic costs, maintaining health and infrastructural structures, and finally getting back to work. Certain studies have claimed that the social distancing measures must be maintained until 2022 as the virus may stay and not fully obliterate. The above-mentioned problems can be solved by reviving the nation's core sectors, creation of demand, generation of employment, and circulation of currency. Our honorable Prime Minister, Shri Narendra Modi has also shown us the path towards de-globalization or “Atmanirbharta” which was first introduced as a protectionism mantra by Jawaharlal Nehru when India was poor and struggling. From the “Atmanirbhar Bharat” plan we can interpret that the protectionism laws and policies will become more effective and stringent by the end of 2020. As history says, India can re-emerge as a global leader amid the global crisis as it is unquestionably a recognized land of opportunities. India has a very good network of roadways and railways to execute effective domestic transportation. These roads and railway tracks link various industrial corridors and special economic zones. The reverse migration due to the pandemic provided an opportunity to engage the laborers in gainful employment. Our agricultural sector accounts for 14% of our GDP and can recover quickly if effective plans are implemented and investments are truthfully realized. The government has already announced a 20-lakh crore package for sectorial boost and favors our agrarian economy. 3rd tranche mainly focuses on the agricultural sector. The agricultural stimulus is of Rs.1,50,000 crores according to the distribution of the economic package. The MSMEs have been the key focus of the government and the economic advisors it constitutes around 30% of the nation’s GDP, other sectors like metal and mining industries, the generic pharmaceutical industry are a part of our economic lifeline. The lockdown has undoubtedly disrupted the supply chains and agricultural activities. There will be a 40,000-crore boost in spending for the “Mahatma Gandhi National Rural Employment Guarantee Act” which will help to generate work for the affected laborers. A provision of 30000 crores has been created as “Additional Emergency Working Capital” for farmers through NABARD. Rs.2 lakh crores credit has been ascertained to boost 2.5 crore farmers under “Kisan Credit Card Scheme”. The primary agriculture cooperative societies, farmers & producers organizations, and the agricultural entrepreneurs have been allotted finance facilities of Rs.1,00,000 crore and a scheme of 10,000 crores has been formulated for the Micro Food Enterprises. The fisheries and hatcheries have also been taken care of. The permits for the hatcheries expiring on 31st/3/2020 had been extended for 3 months. Certain reforms for the governance and administration for the agricultural sector has also been made, a barrier-free inter-state trade and e-trading of agricultural produce has been announced. If we take a look at the trend of the Indian economy during the pre-COVID period we can observe that the GDP rate was on a downward trajectory with the annual growth rate falling 6.04% from 2018-2019 to 3.89% in 2019-2020 which is lowest since 2002-2003. Now about 30% of this GDP comes from the industries which majorly consists the micro, small, and medium enterprises or in other words the MSME sectors and provides employment to around 120 million peoples. Given the backdrop of the weak economy, the pandemic of COVID-19 is creating two major commotions for these industries in two ways one in the supply side of it and the other one in the demand side. If we look at the supply side disruption of the MSME sector the main cause for the disruption is due to the non-availability of loanable funds and disruption of the labor services. The availability of loanable funds is important for this sector as it functions as a source of credit, now due to this COVID-19, the banks have stopped giving credit facilities to this sector, as due to the lockdown no business activities are taking place as a result, the banks are not assured about the repayments of the loanable funds. Now coming to the labor part to control the spread of the virus the government has announced only 50% of the labor force can be employed in factories at a time as a result of which the factories cannot yield at its full potential and production has substantially declined. Now if we observe the demand side disruption it is mainly occurring due to the lockdown situation, due to lockdown, most people are out of their jobs as many firms are not able to provide salaries to their employees. Due to this problem, most people are out of their income as a result demand for products has declined. To boost the MSME sector the government announced some relief packages. If we look at the salient fiscal packages announced by the government to boost the MSME sector include Collateral-free bank loans of up to Rs.3 trillion to MSMEs with 100% credit guarantee and Government investment of Rs.100 billion in funds that in turn will invest Rs.500 billion in the equity capital of MSME. A key constituent of the ‘fiscal package’ is the MSME loans backed by 100% government assurance. Given the risk repugnance in the banking system, the government must step in to bear some of the credit risks, so that banks can do what they are good at, which is, assigning capital. A credit guarantee scheme is a step in the right track. Another benefit is that the government won’t be affected immediately due to the credit guarantee. But some loopholes must be rectified, the credibility of a credit guarantee scheme and the lenders trust in it depends a lot on the details of the scheme. There may not be any take-up until the government clarifies the system of the scheme, for example, the conditions imposed on the availability of the guarantee and the timeline to make claims. 

To conclude we must say the government has correctly recognized the two sectors (Agriculture and MSMEs) that have immense potential to change the game and help India not only to fight back but win over COVID-19 and set an example for the rest of the world. The economic advisors have shown the correct path but the implications and the loopholes pointed out throughout the essay must be taken care of. There must be proper and unbiased allocation of funds. The primary and the only concern must be the welfare of the public, our farmers, and entrepreneurs. This is an opportunity for our nation to rectify its previous policy measures, whether it be fiscal or monetary.

                      

                      THANK YOU.