Enable migrant workers to return

Bharat Jhunjhunwala

The main reason for outward migration is the mismatch between geography and population. For example, the construction of the Bhakra Dam led to an increase in the area under irrigation in Punjab and to a higher demand for labour. Thus, large numbers of agricultural workers are migrating from Bihar, Jharkhand and UP to Punjab; and industrial workers are migrating to Surat. Same situation is leading to migration of agricultural labour from Tamil Nadu to Kerala. The same reason holds true internationally, for example, in the migration of nurses from Kerala to Italy. The second cause of migration is the poor state of governance in the home states. Today, an industrialist from Bihar establishes a power loom unit in Surat and employs workers from Bihar. The same industrialist and workers are unable to work together in Bihar. The cost of raw materials and electricity and price of finished cloth is almost same in the two areas. The cost of labour is also less in Bihar. Yet industrialists are fleeing from Bihar. The reason is that the politics of Bihar sees them as “exploiters.” The politicians extract “blood money” and bureaucracy wants grease money at every step. Perhaps Bihar can improve its governance yet the mismatch between geography and population will remain and migration will continue.

The consequence of outward preventing migration, that is, preventing the return of migrant workers to their host states, will be that the host states will make increasing use of automatic machines such as harvesters in agriculture and robots in industries. This will lead to less demand for labour in the economy both in Punjab and Gujarat and nationally. The reduction in demand for labour in Surat will stabilize the wage rates in Surat and this stability will overflow into Bihar and prevent increase in wages in Bihar as well. Another consequence will be that the cost of labour in Kerala, Punjab and Surat will increase due to less in-migration. The cost of production of pepper in Kerala and cloth in Surat will increase and we will price ourselves out of the global market. That will harm our economy. Therefore, we should consciously encourage migration.

The Mumbai-based International Institute of Population Studies has, however, recommended to the Government that efforts must be made to readjust and reintegrate the returning migrant workers in their home states. They should be provided with food under the Public Distribution Program (PDS), employment under MNREGA and health and education facilities at par with the host states, it has said. I think this would be counterproductive because such a policy would lead to increase in use of robots and increase in the cost of production in the host states and harm the welfare of all our citizens.

Further, there will be a huge mismatch in the skills of the returning workers and demand in the home states. Say, a worker has the skill of repairing power looms. Not only he would not like to carry mud under MNREGA in Darbhanga, such an employment will be downgrading his productivity and such reintegration will be regressive. There are limits to employment of these workers in agriculture as well. It is seen at a global level that the share of income and employment in agriculture declines along with economic growth. Less than one percent of workers are employed in agriculture in the industrial countries today. About 80 percent of our citizens were dependent on agriculture at the time of Independence. This is down to 20 percent today. Therefore, it will not be possible to absorb the large numbers of returning workers in agriculture.

A caveat is that we could yet absorb them in agriculture if we are able to develop niche agricultural products like tulips of Netherlands, olives of Italy, wine of France, oranges of Florida, walnuts of Washington, pepper of Kerala and coffee of Karnataka for the home states of Bihar, Jharkhand and UP. However, this will require deep efforts at research the results of which are uncertain and will take time to arise, if at all. Another negative impact of retaining migrant workers will be that the governments of the home states will be burdened by additional expenditures on PDS, MNREGA, health and education. That will lead to a reduction in the capital expenditures such as on the construction of village roads and further push down their already struggling rates of growth. For these reasons we must make urgent efforts to send back the returning workers to their host states. The economies of the host states will face a permanent setback if industries close due to unavailability of workers; and the job opportunities for our workers will decline if they start using robots. Time is short to repair the imminent permanent damage just as a damaged limb has to be imputed fast to prevent gangrene from spreading through the body.

The Government must take three steps immediately. One, a new law should be enacted and the migrant workers should be assured that in case of any lockdown being imposed in future, the Union Government will pay them day-to-day sustenance money. They may be required to register for this purpose. This should not be left to the whims and fancies of the employers or the state governments. Two, the governments of the home states should introspect as to why their industrialists and workers--both migrate to Surat and work together there instead of working together in their home states? These states have to honour the businesspersons instead of exploiting them. My ancestors were living at Luharu in Rajasthan. The Princely Ruler of Malsisar visited and implored them to settle in his village and undertake trade. My family sold seeds and bought the produce from the farmers and helped develop that village. Such honour and respect must be given by these home states to the businesspersons. These states must work closely with the State Chambers of Commerce and identify the corrupt politicians and bureaucrats and take punitive action against them. This will entail confronting their own party men which will require taking the people into confidence and building a public pressure against such crooks. Three, the Union Government must establish a mission to identify and develop hi-value crops suitable for each district or, at least, division of these states along the lines of tulips of Netherlands. This will generate some incomes for the workers in their home states without harming the national economy.

Dr. Bharat Jhunjhunwala, Formerly Professor of Economics at IIM Bengaluru

Back to Home Page

Jun 21, 2020

Dr. Bharat Jhunjhunwala

Your Comment if any