Global Economy

They have not returned: How Covid-19 has impacted labour migration in the country


The migrant workers’ long walk — from the cities they helped build to their homes in faraway villages — defined the first nationwide Covid lockdown in India. Three crop cycles, half a dozen festivals and two Covid-19 waves later, several lakhs of these workers have still not returned. The pandemic has had a profound impact on labour migration patterns — and this could shape work in rural as well as urban centres.

The rural-to-urban migration is probably at one of its lowest ebbs, say labour ministry officials, consultants and economists ET spoke to. There has been a near-10% decline in blue collar workforce moving to cities for jobs. This is enough to choke the labour supply lines to major industries.

According to the 2011 Census, India has 450 million internal migrants. The number of migrant blue-collar workers — who have moved inter-state — is around 150 million, according to Betterplace estimates.

“The quantum of migration has dropped considerably post-pandemic. People moving to larger cities and metros for work has fallen by nearly 10%,” says Pravin Agarwala, co-founder and CEO, Betterplace, which powers the Aatmanirbhar Skilled Employee Employer Mapping (ASEEM) platform, a directory of skilled workforce of the central government.

This is due to a combination of factors. After the traumatic return home, many workers prefer to stay back with their families and take up local jobs. The government’s rural employment schemes such as MGNREGA and Pradhan Mantri Rojgar Yojana help people earn a livelihood closer home. That apart, an upsurge in rural infrastructure projects, such as roads and highways, health centres and other public amenities, has given jobs to workers. Meanwhile, state governments are also filling up thousands of posts that are lying vacant. Above all, government subsidies and benefits till Diwali and, in some cases, loan waivers have quelled the need for migrant labourers to return to cities immediately.

“When the first lockdown was imposed last year, many people went back to their villages. In a short span of time, they got jobs closer to their homes,” says DPS Negi, chief labour commissioner (central), Ministry of Labour & Employment. “Many do not want to head back to the cities due to fears around Covid. They are also not very sure of the job situation in cities. So there is an 8-9% drop in the number of migrant workers heading back to cities for jobs,” he adds.

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REVERSE MIGRATION


The government has earmarked nearly Rs 5.5 lakh crore to be spent on various welfare and rural development projects. This, according to economists, has started a trend of reverse migration. Higher rural spending has allayed the need for people to migrate immediately to urban centres. NGOs like Jan Sahas, which work for migrant labour protection, say these welfare initiatives have reaped rich rewards.

“As per the Periodic Labour Force Survey 2019-20, roughly 32 million people moved back to agricultural sector; this translates to a 3% net rise in the share of workers in agriculture. This has never happened ever since this data-set started getting captured,” says Sachchidanand Shukla, chief economist, Mahindra Group. “Money transfers to farmers, higher spending on rural welfare projects and even free food distribution helped people stay back. But this will change, as agriculture is not viable for such a large number of people. Once the situation normalises, people will head back to cities for jobs, better earnings and quality of life,” he adds.

The labour force in India comprises permanent and circular migrant workers. Permanent migrants stay in a place for more than a year and go back to their villages for a short period of time. This class of labourers are usually skilled, with many having diplomas or ITI certificates. Circular migrant workers are relatively unskilled with an average education of Class X or XII. But their jobs are interchangeable and they typically return to their villages every five-six months.

“There is always a cyclical demand for some job profiles that are mostly filled up by circular migrant workers. For instance, when IPL starts, there is demand for delivery boys; this is met by people who migrate to the city for a few months, earn and save and go back. Such job profiles are seeing a supply shortage,” says Agarwala of Better place.

Sectors such as manufacturing, ecommerce, logistics, construction and real estate are facing an acute labour shortage — of about 20-25%, say job consultants and CEOs of large companies. This is prompting many companies to step up local hiring.

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Sodexo, one of the largest food and facility management and technical service providers, has tied up with over 100 partners — including some leading corporates — to train the local youth and later extend them employment opportunities. “There is a sizeable reduction in the migrant workforce. Training and empowering local youth through our train-and-hire partners is our strategy to future-proof the availability of trained workforce and address the issue of labour shortage in the long run,” says Pradeep Chavda, director, human resources (India) at Sodexo. “We are forging similar partnerships in Gujarat, Goa, Tamil Nadu and Hyderabad. Hiring locally also gives a cost advantage as accommodation, transportation, etc are not needed.”

Others such as RPG Group’s KEC International, a leading power transmission EPC company, have also increased their intake of local workforce. “We are not facing any significant shortfall at the moment. While some people may have decided to stay back and work locally, we have also stepped up local hiring to meet the shortfall. Hiring locals will also be cheaper, ” says Vimal Kejriwal, MD & CEO, KEC International.

Labour supply in the manufacturing and construction sector has only reached 70-80% of pre-pandemic levels. But many jobs in these sectors are not fungible as they require specific skills. These sectors, which have seen a robust recovery and need additional workforce to ramp up production, are reeling from shortage of labour, say top company officials.

“Real estate sector is facing labour shortage because we have done well over the past few months. We are not getting additional workforce for our projects,” says Niranjan Hiranandani, MD of Hiranandani Group.

Take the case of the private security industry, one of the largest employers of migrant blue-collar workers. It employs around 9 million people, 60-70% being migrants. It is facing a 30% shortage of labourers. “As more businesses open up, there is demand for more security guards. But many who left the cities in the beginning of the pandemic are finding local jobs and some others are wary of working away from their homes, thus leading to a dearth of workers in all big cities,” says Kunwar Vikram Singh, founder of Lancer Network and chairman of Central Association of Private Security Industry.

Hotels and restaurants and MSMEs are also heavily dependent on migrant workforce, but these sectors have not started operating full steam so far. “Our hiring of migrant labour has dropped nearly 50%, as we are not operating at full capacity even now. We are not seeing a lot of migrants approaching us for work. This could be because they have not come back from the villages,” says Sukesh Shetty, secretary, Indian Hotel & Restaurant Association.

In MSMEs, even well-managed units in buoyant sectors such as manufacturing are running at 60-70% capacity. So, there is a hiring pause across the sector. “We are not able to offer jobs to a lot of people. This could be one reason why workers are hesitant to come to cities now; they are not sure if they will get a job,” says Mukesh Mohan Gupta, president, Chamber of Indian MSMEs.

However, corporate India is hopeful that a complete vaccination status may reverse the trend. India has fully vaccinated 23% of adult population while 66% have received the first dose. The movement of migrant population back to the cities will also depend on the progress of vaccination in major supply states such as Uttar Pradesh, Andhra Pradesh, Bihar, Jharkhand and Odisha, say experts.

“The slow progress of vaccination in many of these states is a major hindrance to the return of workers. Most companies would only take back fully vaccinated people and that is keeping many people back in their villages,” says Rituparna Chakraborty, executive vice-president, TeamLease Services. “Workers with specific skills such as electricians, plumbers, carpenters, etc come from specific pockets of the country. For those skills, even companies that are stepping up local hiring will have to rely on migrants,” says Chakraborty.

That apart, labour market experts are of the view that many migrants want to wait and watch as there are chances of a third wave.

“Covid and lockdown fears are making people reluctant to come back to cities for jobs. But as businesses grow back, and Covid fears come down, there will be a rush of people from rural India to cities,” says Hiranandani. “Agriculture alone will not be able to provide jobs to so many people. Rural-to-urban migration will continue unabated for several years to come,” he adds.

However, some are of the view that the transition from rural to urban areas will come down as there are better opportunities for workers closer home. However, this need not create a permanent labour shortage, they say. “As tier-2 towns start developing more and farming becomes more profitable, there will be further reduction of migrant workforce. The shortage of labour may not be a long-term problem as people from local areas will get skilled and local catchment areas will be created,” says Ajit Menon, former HR head of Dalmia Cement.



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