Will Bihar's Economy Rise to the Reverse Migration Challenge?

Even if up to half of the returned migrants leave the state again, the question of how the rest will find gainful employment is both a political and economic issue.

One way of looking at India’s lockdown’s strategy was that it came too early, was the strictest of any country, and is now being done away with at a juncture when cases have not even peaked. The worst is still to come, both for citizens’ health and livelihoods.

What is also undeniable is that the initial lockdown strategy was badly mishandled by the state machinery. Millions lost their jobs immediately, a majority were stranded in slums, and a considerable chunk set off on their feet to return homes by road. In this horrific situation, 667 people lost their lives until May 24, according to one assessment.

The lockdown also sparked a catastrophic reverse migration crisis, the economic effects of which will start to be felt in the coming months.

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Reverse migration and its reversibility

Chinmay Tumbe of IIM Ahmedabad puts India’s reverse migration since mid-March conservatively at 30 million or 3 crore. Professor Amitabh Kundu and his colleagues estimate that interstate migrants destabilised during March-April 2020 are around 22 million, but that only about 12 million have returned.

In this context, a question that is assuming both academic and political importance is what will happen in states like Bihar; whether the returned migrants will look for jobs outside the state anytime soon.

The occupational structure of Bihar suggests that 56% of the labour force is engaged in agriculture (India 44%), 8% in industry (23% India) and 36% in services. Employment elasticity of output in agriculture is already close to zero or negative. Further, increasing informalisation and higher costs of living in urban areas over time have led to a gradual increase in circular migration. In 2017-18, the share of casual labour in Bihar (32.1%) was significantly higher than in India (24.3%). At over 10% growth, Bihar has registered higher growth than India in the last three years, however, one-third of its population is below the poverty line. Further, nearly 40% of Bihar’s youth had no jobs and the unemployment rate had jumped to 7.2% in 2017-18 from 2.5%  in 2011-12.

Migrant workers with their faces covered and carrying their belongings walk along a railway track to return to their home state of eastern Bihar. Photo: Reuters/Adnan Abidi

Post-COVID-19, several newspapers have reported that around 25 to 30 lakh migrant workers have returned to Bihar. A CMIE survey pegged unemployment in Bihar for April 2020 at 46.6% (or 20 percentage points above the national rate). NSO’s PLFS (2019) unemployment rate in Bihar (7.2%) was already higher than the national average (6.1%). In Bihar, East Champaran, Katihar, Madhubani, Gaya, West Champaran, Darbhanga, Araria and Muzaffarpur are the major districts for return migrants.

Given this backdrop, the larger question is whether these migrant workers will go back to their previous place of work or go to other states any time soon.

Now, states like Punjab, Haryana and Telangana (both at the private and public level) are putting in efforts to bring migrant workers back from their home states. However, Bihar’s assembly elections are expected to take place in October-November. Accordingly, the Bihar government and those in the opposition have started approaching these migrant workers for votes. The incumbent government is assuring them of secured jobs. The government may announce some “freebies”. It is also possible that a large number of low-skill workers may choose to stay until the election period.

Also Read: Government Has Created an Archive of Distress, a Museum of Misery For Migrant Workers

In 2005, Nitish Kumar had promised that Bihari people would not have to migrate outside the state. However, little has changed since then. People understand that if migration has not declined in 15 years, it is unlikely to happen within the next year.

At the same time, media reports have documented how many migrants are afraid of going back, as a number of them have also had bad experiences with their employers. However, if the situation slightly improves, and if they have better living conditions, maybe a quarter to half of those who returned may choose to go to other states slowly (particularly younger workers). Bihar has the highest share of youth in India, 39% of 0-18 years (Census 2011) in India but 48% in Bihar. However, family members of workers including women, children, elderly and disabled may choose to stay in the state. And migrants might be disinclined to move to bigger cities like Delhi and Mumbai.

Overall, business will suffer heavily due to the shortage of workers and contraction of skilled labourers. Therefore, these units may persuade them to return to work at these places. Most of the migrants are only earning member and their family depends on the remittances. In 2007-08, remittances in Bihar accounted for 5.5% of the GDP, which is second highest after Kerala. Interestingly, many local newspapers recently reported that some of the migrants have already started going back to their earlier place of work.

Labourers work on an under-construction bridge as part of the ‘Garib Kalyan Rojgar Yojana’ in Patna, June 20, 2020. Photo: PTI

Immediate interventions needed

The state government has been dependent on central transfers and grants for resources due to limited own revenue receipts. In the wake of falling revenues and remittances, the government should also explore options to issue health bonds and mobilise resources to mitigate the crisis.

Bihar has become the first state to conduct a skill-mapping of migrant workers. Now the government has migrants’ data in hand, it should specifically target and reach out to them. The government needs to identify the thrust areas which are labour intensive. Construction is a strategic area where maximum efforts should be put to generate employment. The workers can also be employed in flood management work or Patna Metro Rail Project and speed up pending work.

In the short run, the maximum employment-generating prospects (in the short-term at least) appear to rest in MGNREGA only.

Given the weak industrial base, lack of borrowing capacities and weak entrepreneurship, the Rs 20 lakh crore package, relying upon bank lending to the MSME sector (which is already complaining in the rest of India) is practically irrelevant to Bihar. Without substantial support from the Centre, Bihar is ill-equipped to handle the impact of COVID-19.

So the Central government has, almost certainly keeping the Bihar elections in mind, launched a scheme on June 20. It would converge 25 rural-centric employment generation schemes to provide work for 125 days in 25 areas to the migrant workers in 116 districts of six states (Bihar, Uttar Pradesh, Rajasthan, Madhya Pradesh, Odisha and Jharkhand).

The scheme would not hit the exchequer as the Rs 50,000 crore allocated for various schemes in the Budget would be front-loaded for the purpose. However, after the front-loading, the entire sum would be spent in 125 days — by October-end, rather conveniently. As many as 32 of the 38 districts in Bihar are included under the scheme.

Santosh Mehrotra is professor of economics, JNU, and chairs the Centre for Labour. Baikunth Roy is assistant professor of economics at Patliputra University, Patna.