Income support to vulnerable migrant workers in the informal sector, who fear loss of livelihood as also life, is the right step
By Pravakar Sahoo & Abhirup Bhunia
India has been recording lakhs of fresh Covid-19 cases every day over the last few days. Most major cities and growth centres—Delhi, Mumbai, Chennai, Bengaluru, Surat, etc—continue to witness rising cases at an alarming rate. Although the governments, both at the Centre and states, are trying to address the emergency, the health infrastructure has been too stretched to accommodate rising cases, forcing state governments to impose severe restrictions or lockdowns to break the transmission chain. Delhi has gone in for a lockdown and Maharashtra has opted for severe restrictions till May 1.
The fear of complete lockdown across states is looming large. Fears of a lockdown, livelihood uncertainty and community spread of the virus create ground for mass reverse migration from big cities—like last year, which magnified the spread of the virus to different parts of the country and gave a severe blow to the country’s supply chain for months. It’s time to stop reverse migration with financial assistance, provision of subsidised food and other benefits in kind to assure migrant labourers to stay wherever they are.
In this context, the Delhi government’s decision to provide financial assistance of Rs 5,000 to registered construction workers to contain another episode of reverse migration is timely. The Centre should come up with a financial package and coordinate with states for an effective solution in a localised way to stop reserve migration.
The first spike in Covid-19 cases last year, and the fear of strict lockdowns, triggered an unprecedented exodus of 1.14 crore migrant workers from cities, back to their villages. A survey conducted in 179 districts during May-June 2020 reveals that the second most important factor that made migrants make the difficult choice to return to their villages was economic (33.2%)—the top factor being the fear of contracting Covid-19 (35.6%).
When economic activities began to pick up last year, this led to labour shortages in important sectors like manufacturing (especially labour-intensive sectors such as footwear, textiles, etc), mining, retail and trade and hospitality, which have high dependence on migrant workers. Small and medium sized enterprises were hit badly, given their increased dependence on migrant labour. The latter includes both inter-state and intra-state migrants, but both categories represent rural-urban migration—often termed as distress migration.
The sudden exodus of labour force created multiple challenges including issues with capacity utilisation, affecting entire supply chains, putting severe cost pressures on firms and construction activities, and eroding operating profits, as wages rose and revenues fell. States with large manufacturing presence, such as Maharashtra and Gujarat, were particularly affected, as was Delhi with trader bodies estimating that 60-70% of the labour force employed in Delhi left the city during the 2020 lockdown.
The second fallout of reverse migration was the spread of the virus in rural areas in migrant-origin states like West Bengal, Odisha, Uttar Pradesh, Bihar and Jharkhand, from where lakhs of workers come to affluent states—mostly capital cities—in search of work. The return of migrants put strain on fragile rural health systems, where health infrastructure, human resources and trained personnel were inadequate, coupled with low testing capacity. By June 2020, Covid-19 had spread to 98 of the 112 poorest rural districts, up from 34 in mid-April 2020. Studies show routine health services in rural areas were disrupted in light of Covid-19 last year, putting vulnerable populations—pregnant women, undernourished children and the elderly—at heightened risk of non-Covid-19 diseases and mortality. The mass reverse migration not only spread the virus, but also created challenges for the state governments in terms of managing quarantine and other basic facilities.
At the height of the pandemic last year, when the economy was all but closed, income support—through one-time direct benefits transfers (DBT) to around 20 crore women, and around 9 crore farmers—was provided by the government. Also, 80 crore beneficiaries were entitled to additional 5 kg of foodgrains free of cost every month. But most of these relief measures were subsequently discontinued November onwards as the Covid-19 case-load had begun to subside.
The IMF suggested this month that an additional fiscal stimulus would be helpful in supporting India chart its economic recovery. If a fiscal stimulus is under consideration, it is a good idea to start thinking of the stimulus by supporting the most vulnerable. Seen from that lens, income support to vulnerable migrant workers in the informal sector, who fear loss of livelihood as also life, is the right step. The government also must assure these migrants of basic health facilities, including vaccination. All types of efforts—financial and non-financial incentives—should be made to contain another episode of mass reverse migration till we have structural reforms in place in the areas of rural development, urban livelihood guarantees, inter-state migration policies, and inter-state portability of government subsidies and entitlements.
Given the dual risk of economic disruptions in urban centres in key sectors due to sudden labour shortages, and the risk of Covid-19 spreading fast in rural areas, financial support mechanisms to abate mass reverse migration is a move in the right direction, particularly one that has been taken in a crisis mode. The government is vocal and deeply concerned to stop reverse migration this time. It is working with local administrations to convince factory managers and trade unions in industrial clusters, etc, to convince migrant workers and stop reverse migration. It is a case of once bitten, twice shy—migrant workers fear lockdowns and the fact that they may have to remain without food and housing and endure loss of income just like last year, and feel that going back to their villages is the best option. Some out-of-the-box thinking in terms of a special financial package is required to convince them to stay put.
Sahoo is professor, Institute of Economic Growth, Delhi. Bhunia is an international development consultant