At present only 15 urban centres account for 80% of the GDP. If employment is available in more urban centres then those who rushed back from far off places can perhaps find jobs nearer home.
When Raj Kapoor picturized lyricist Shailendra-composed Mukesh-Lata duet “aa ab laut chalen, nazren bichhaye baahen pasaare, tujhko pukare desh tera” in the 1960 movie, Ganga-Jamna, he could not have imagined that six decades later the theme of this song and the exodus back to villages which the song portrayed will be a reality in vast parts of India. In the movie it was a happy move back to rural moorings. In reality, the 2020 migration has been sorrowful. Workers in the unorganised sector, who live in urban centers sans any social security and for whom State is perhaps symbolised merely by legislated working hours, have chosen to move back to the warmth and safety of their home and hearth in the villages as a collateral to the Covid-19 crisis. They are being described as migrant labour and even Supreme Court has been seized with their plight. No one seems to have a solution to offer. Nearly 30 years after economic reforms were initiated and branded as inclusive by successive regimes, the benefit of economic growth has not cascaded down and has bypassed three-fourth of the population.
The Union government has announced a slew of measures, which, if not botched up by official inefficiency and insensitivity, can be a turning point. Plight of the workers in the unorganised sector was studied in depth between 2006-09 by an eminent committee headed by the late Arjun Sengupta, who had the distinction of having been appointed by Secretary General Kofi Annan as the United Nations expert on extreme poverty and human rights. B.N. Yugandhar, a distinguished bureaucrat with track record in poverty alleviation work and father of Microsoft chief Satya Nadella, was among the members. The committee had suggested a 13-point action plan, which was ignored by the regime of Manmohan Singh. The high pitch campaign by Sonia Gandhi and her allies (who were part of UPA) taking pot-shots at the Narendra Modi government during the present crisis was matched by UPA’s soft pedalling of the action plan suggested by Arjun Sengupta panel’s “Report” on the “Conditions of Work and Promotion of Livelihoods in the Unorganised Sector” published in August 2007 under the aegis of the National Commission for Enterprises in the Unorganised Sector. Sengupta suggested setting up a National Social Security Fund, which needed in 2007 prices 0.20% of GDP (a total of Rs 33,950 crore as per that estimate). NSSF was announced by Finance Minister Pranab Mukherjee in the 2010 budget and provided with a funding of Rs 1,000 crore. Over the years the budget allocation was tapered down. In its 2016-17 report, the CAG observed that Rs 1,927 crore allocated for this social security scheme in the last years of UPA and continued (later replaced with better scheme) by NDA was unutilized and had been ploughed back into the Consolidated Fund of India. There could be no better example to highlight the lip service provided to workers in the unorganised sector post the Sengupta report.
NDA in the past two years has introduced the Prime Minister Shramyogi Maandhan, which provides old age protection and social security for workers in the unorganised sector, engulfing rickshaw pullers, street vendors, head loaders, brick kiln workers, cobblers, dhobis, rag pickers, beedi workers, agricultural labour, etcetera. The scheme covers those between the age of 18 and 40 with a maximum monthly income of Rs 15,000. For monthly contribution ranging as per age, between Rs 55 and maximum Rs200, an old age pension on reaching age 60 and in case of death, family pension to widow, has been assured. The corpus of PMSYM is Rs 500 crore provided in the last Union budget. An outlay of Rs 180 crore has been made for a similar social security scheme for small shopkeepers (whose turnover will be ascertained through GST records for their eligibility): PM Karmyogi Mandhan (PMKYM). Here too the age and contribution and pension criteria are similar to that of PMSYM. The network of 3.2 lakh Common Service Centres providing e-services which are spread over the country, including in remote locations, are harnessed to register beneficiaries for these social security schemes. Aadhar card and an IFSC enabled Jan Dhan account are essential for being enlisted for these benefits. In the aftermath of Covid-19 the five tranches of relief announced by Finance Minister added some benefits for the unorganised sector, who account for 93% of the workforce.
The migrants who are returning to their villages have to be provided with incentives to return to their places of work. Attention is usually focused on the remittances in foreign exchange which Indian workers and other expatriates send from abroad. Domestic remittance market in India (money sent to villages from urban centers by workers) is estimated at Rs 1.5 lakh crore annually by the Economic Survey. If this remittance stops, the rural economy will go for a toss. Plus the availability of more labour in rural India will depress rural wages and also broaden the number of people seeking relief employment under schemes like MNREGA. Non-farm economy of rural India, which is largely unreported and thereby unassessed, may suffer due to lack of money in the hands of villagers deprived of remittances.
Some migration at this time of the year is seasonal. Workers go back home to help in family farms for Kharif harvesting. During monsoon when construction activity is at low ebb, many go back home, to return when work is available. But the migration this year is much larger due to closure of work in cities. Railways have ferried back so far 91 lakh workers. An unintended consequence of this migration has been that a massive database has emerged—Railways now have the names, addresses, phone numbers and Aadhar details of those who travelled. State governments too have collated similar data from those who travelled in buses from one state to other. So far planners had access to proxy indicators—they used to collate data on the basis of annual figure of those travelling by unreserved coaches in inter-state rail travel. (2017 Economic Survey, relying on these proxy indicators, had estimated 90 lakh migrate for work in a year. The number of migrants who used railway so far indicates that the Economic Advisor’s proxy estimate may not have been off the mark.)
The data collated during the migration can form the basis of economic incentive with a sunset clause. Assuming that data on one crore workers in the unorganised sector who have gone back is available, if per head Rs 5,000 handout through JAM mechanism is provided for three months, it will entail a cost of Rs 15,000 crore. (Those who are left out as they have not been collated can be included subsequently in the same manner in which relief rations have been extended to non ration card holders, on demand.) The budget allocation on MNREGA having been enhanced in the Atmanirbhar package to Rs 1 lakh crore, this outgo should not pose a problem. A further cash incentive for two or three months can be offered to those who return back to their urban jobs. This could restore availability of labour in urban India and take pressure off rural economy in the aftermath of the Covid crisis.
At present only 15 urban centres account for 80% of the GDP. There are nearly 100 cities in India and another thousand towns which together can absorb the employment urge of the rural migrant if economic activity is spread widely, decongesting the cities. If social security network and employment is available in more urban centres then those who rushed back from far off places across the country can perhaps find jobs nearer home. Covid-19 has shown that concentration in few cities has enormous hazards. Incentive for job creation and relocation of industries could be a collateral of the present crisis.
The government has indicated that definition of migrant worker is being relooked at and an updated Code on Social Security is on the anvil on the lines of reform suggested by a parliamentary committee headed by Biju Janata Dal leader, Bhatruhari Mahtab. Inadequacies of the present legal framework are being studied and may be remedied. The irony is that a key element of the legislation of 2008, which followed the watered down implementation of the Arjun Sengupta panel’s action plan, is yet to take off. The 2008 law provides for allotment of an Unorganised Worker Identification Number (U-WIN) for the deprived workforce to entitle them to social security benefits. This has been mired in a cesspool—no headway has been made. The collating of data on migrants, an unintentional collateral of the present crisis, may be put to use to put this reform on track.