Mil­lions of work­ers fled In­dia’s cities and don’t want to re­turn

Iran Daily - - Global Economy -

From March through May, around 10 mil­lion migrant work­ers fled In­dia’s megac­i­ties, afraid to be un­em­ployed, hun­gry and far from fam­ily dur­ing the world’s big­gest ANTI-COVID lock­down.

Now, as Asia’s third-largest econ­omy slowly re­opens, the ef­fects of that mas­sive re­lo­ca­tion are rip­pling across the coun­try. Ur­ban in­dus­tries don’t have enough work­ers to get back to ca­pac­ity, and ru­ral states worry that with­out the flow of remit­tances from the city, al­ready poor fam­i­lies will be even worse off — and a big­ger strain on state cof­fers, Bloomberg re­ported.

Mean­while, migrant work­ers aren’t ex­pected to re­turn to the cities as long as the virus is spread­ing and work is un­cer­tain. States are rolling out stim­u­lus pro­grams, but In­dia’s econ­omy is hurtling for its first con­trac­tion in more than 40 years, and with­out enough jobs, a volatile po­lit­i­cal cli­mate gets more so.

“This will be a huge eco­nomic shock, es­pe­cially for house­holds of short-term, cycli­cal mi­grants, who tend to come from vul­ner­a­ble, poor and low-caste and tribal back­grounds,” said Varun Ag­gar­wal, a founder of In­dia Mi­gra­tion Now, a re­search and ad­vo­cacy group based in Mum­bai.

In the first 15 days of In­dia’s lock­down, do­mes­tic remit­tances dropped by 90 per­cent, ac­cord­ing to Rishi Gupta, chief ex­ec­u­tive of­fi­cer of Mum­bai-based Fino Paytech Ltd., which op­er­ates the coun­try’s big­gest pay­ments bank.

By the end of May, remit­tances were back to around 1750 ru­pees ($23), about half the PRE-COVID av­er­age. Gupta’s not sure how soon it’ll fully re­cover. “Mi­grants are in no hurry to come back,” Gupta said. “They’re say­ing that they’re not think­ing of go­ing back at all.”

If work­ers stay in their home states long term, pol­i­cy­mak­ers will have more than remit­tances to worry about. If con­sump­tion falls and the new sur­plus of la­bor drives wages down, Agar­wal said, “There will also be a sec­ond-or­der shock to the lo­cal econ­omy. Over­all, not look­ing good.”

In­dia an­nounced a $277 bil­lion stim­u­lus pack­age in May and fol­lowed it up with a $7 bil­lion pro­gram aimed at cre­at­ing jobs for 125 days for mi­grants in vil­lages across 116 dis­tricts. Sep­a­rately, lo­cal au­thor­i­ties are also look­ing for so­lu­tions.


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