By Gaurav Taneja & Adil Zaidi
The Covid-19 pandemic has brought to the fore many deep-rooted problems of the economic and social fabric of India. Some of the worst-hit sectors like construction, hospitality and manufacturing are among the largest employers of migrant and contractual workers. These workers live on subsistence wages, have no alternative earnings, and lack both social and financial security. The complete shutdown of the economy impacted this group the most, which resulted in a mass exodus and multiple tragedies associated with it. Such unprecedented crisis unveiled the gaps and loopholes in our labour management and administrative policies. However, these shortcomings and challenges can be used as a learning opportunity to strengthen socio-economic policies and create robust systems to tackle such issues in future.
Surprisingly, it was observed that the states prone to natural disasters like floods and cyclones dealt better with the mitigation strategies than others. They were better equipped with ground-level data, logistics and supply chain facilities to effectively reach out to the affected people. The migrant labour crisis faced by the country during the lockdown has created a consensus amongst policymakers on the need to strengthen management of migrant labour in India. At the macro level, there is a need for a well-crafted employment strategy to promote jobs and productivity in key sectors. Some crucial measures that should be undertaken to counter this in future are:
Creation of a digital labour database: A national labour database (local and migrant), linked with Aadhaar and Jan Dhan accounts, can help capture and monitor various indicators like wage-trends, skillsets, education, etc. Such data would provide in-depth understanding of movement, regional development, quality of skillsets, based on which policy and welfare measures could be devised. Mandating all employers to update the database with details of their permanent and well as contractual workers would ensure the plugging of any data gaps. It will also boost formalisation of the unorganised sector and aid in upholding of human rights.
Preventing migration of labour: It is crucial to focus on dispersing economic growth across the country by creating growth centres in the less industrialised and backward regions. Initiatives such as One District One Product (ODOP) could be game-changers in tackling migration of labour, and a well-thought-out policy/package for industries should be drafted to encourage industries to relocate to tier 3-4 cities.
Upskilling labour: Setting up labour-industry linkages through Skilled Labour Banks would ensure labourers are registered in their local/regional skill banks, which can then be accessed by industry and skills training institutes. Industry could suggest requirements and hire local labourers, and if there is a supply gap, industry-linked training and upskilling could be done for the workers through the PPP mode. Technology platforms can be set up at the national and state levels, which can help in identifying industry’s region-specific demand and providing skills-training accordingly.
Private sector participation: Policy initiatives and the role of private sector to create conducive living conditions by providing rental housing facilities for labourers working near industrial areas is the need of the hour.
This can further be linked with schemes like the PMAY (Pradhan Mantri Awas Yojana).
Financial safety net: It is important to enhance the coverage of pension for unorganised sector and labourers. The Pradhan Mantri Shram Yogi Mandhan (PMSYM) is the right initiative to ensure financial security by making a corpus available for times of exigencies and retirement. The scheme could be linked with the labour data bank of each state in order to ensure deeper and wider coverage and awareness. This will also require creating financial discipline and literacy amongst labourers for micro-savings.
Social security framework: One Nation, One Ration Card scheme of India is a well-thought-out scheme and is the need of the hour. At present, 28 states/Union territories have been brought under this scheme. The effort to onboard all states should be expedited as Public Distribution System with ration-card portability, digitised and linked with Aadhaar, will provide much-required food security migrant labourers. This can also be linked with the digital labour databases for efficient food management and improved governance, bringing transparency to the Public Distribution System.
In today’s world, where “social and economic inclusion” is one of the major priorities of nation, India will have to quickly look at such reforms to bridge the existing disparities.
A virtuous cycle of social and financial security, access to health and education and providing sustainable employment is critical for India to be a developed economy. These initiatives would require both government and private stakeholders to join hands and implement these reforms.
Taneja is Partner and Leader, Government and Public Sector, and Zaidi is Partner and Leader, Economic Development Advisory, EY India
Views are personal