Demographic reset needed

 In India, the issue of labor migration has always been on the top of socio-economic and political agenda. The remittances from Indian workers in the foreign countries has been one of the primary sources of our current account financing. The issue of VISA for Indian students and workers (and their families) has remained one of the key contentions in our strategic diplomatic discussion with developed countries.

Movies like Do Bigha Zamin (1953, Bimal Roy) have been raising the issue of migrant workers for a long time. Songs like Ae mere pyare watan (Movie Kabuliwala, 1961) Chithi aayi hai (Movie Naam, 1986) have been favorites with all generations.

Political parties in the states like Maharashtra, Goa, Delhi, Tamil Nadu, Karnataka etc. have been consistently raising the issue of migrants straining the local economy. During Covid-19 induced lockdown, the issue of mismanagement of reverse migration had become one of the top controversies; and still continues to haunt the incumbent government.

In fact, Covid-19 appears to have added a significantly new dimension to the intra country migration, i.e., migration of white-collar workers away from metro cities to smaller towns.

The following two news items relating to migrants have drawn significant attention this week.

1.    As per Henley Private Wealth Migration Report (see here), most large emerging economies continued to witness migration of high networth citizens to developed economies. BRICs and the UK were the top sources of wealthy immigration; while Australia, UAE (mostly Dubai), Singapore and USA were the top destinations. China (13500) and India (6500), two top emerging economies, lost the most HNIs, followed closely by Russia and the UK.

There are multiple ways to look at this datapoint. For example—

·         Economies like China, India and Brazil are witnessing strong growth in their middle and upper class population. The number of HNIs immigrating should therefore be seen in the context of new families entering the HNI bracket every year. In the case of the UK and Russia, it could perhaps be more of a function of the political situation (Brexit, economic sanctions, etc.).

·         The wealth inequality may be rising faster than the economic growth in many emerging economies. This on hand pressurizes the governments to be more socialistic in their policy making (e.g., higher taxes and subsidies); and on the other hand, hinders the development of social and physical infrastructure commensurate with the incidence of taxes and desired lifestyle of the wealthy. HNIs thus look to immigrate to countries that offer much better lifestyle and growth opportunities.

·         After reaching a certain threshold, the entrepreneurs and professionals in emerging markets begin to feel constricted by the limitations imposed by the society, policy, technology, markets etc. and decide to venture out to broaden their horizon. They shift their physical base to convenient locations while maintaining their social and culture roots in their native countries.

2.    Communal clashes were reported in Uttarakhand where some organization(s) reportedly demanded that people from one particular community shall leave the state forthwith. There have been reports of widespread damage to the businesses and property of Muslim community people settled in the state.

Many observers have termed it an attempt at ethnic cleansing, similar to what happened with Kashmiri Pandits in Kashmir Valley in early 1990s. Whereas, some experts have attributed economic motives to these developments. The poor employment conditions; reckless development in the name of tourism promotion that has severely impacted the lives of locals in terms of strain on local resources especially water and overall cost of living; and rise in crime in the state due allegedly due to increased population of immigrant workers, etc. are cited as some of the reasons for locals’ resentment and aggression against immigrants’ even though present manifestation is against Muslim community only.

I feel that as the federal structure becomes more dynamic and regional aspirations become even more dominant, the issue of labor migration from mostly agrarian states to industrialized states will remain a key political issue.

As the Economic Survey for FY17 had noted, “Historically, migration of people for work and education has been a phenomenon that accompanies the structural transformation of economies, and has paved the way for the release of “surplus labour” from relatively low-productive agricultural activities to sectors enjoying higher productivity. The resulting remittance flows increase household spending in the receiving regions and further the economic development of less-developed regions.”

The survey admitted that the acceleration in migration has occurred in spite of discouraging incentives such as domicile provisions for working in different states, lack of portability of benefits, legal and other entitlements upon relocation.

Whereas there has been much debate about the slow urbanization rate in India, inequality in regional growth and concentration of economic activity in few areas, the debate about the state of migrant laborers is mostly confined to NGO academics. Unfortunately, we do not hear much debate or discussion about the undesirability of the accelerating trends in migration. In my view-

(a)   The urban development and town planning policies are mostly ineffective, without a comprehensive policy on workers' migration.

(b)   The women security strategies and plans without adequate attention to the fact of large-scale women worker migration are least likely to succeed.

(c)    Cooperative federalism is bound to fail, until and unless the States are empowered and encouraged to make bi-lateral treaties, especially in respect of the flow of workers. It is critical even for realizing the full benefits of GST.

(d)   In the Indian context, large scale worker migration may not be desirable. It is therefore important to make the Village as the primary unit of development, rather than State or Country.

In the words of Mahatma Gandhi, “Independence begins at the bottom. A society must be built in which every village has to be self-sustained and capable of managing its own affairs. It will be trained and prepared to perish in the attempt to defend itself against any onslaught from without. This does not exclude dependence on and willing help from neighbours or from the world. It will be a free and voluntary play of mutual forces. In this structure composed of innumerable villages, there will be ever widening, never ascending circles.

Growth will not be a pyramid with the apex sustained by the bottom. But it will be an oceanic circle whose center will be the individual. Therefore, the outermost circumference will not wield power to crush the inner circle but will give strength to all within and derive its own strength from it.”

Taking factories to the farms is the only sustainable development model for India. Everything else is bound to fail in due course.