Coronavirus: India’s migrant workers are leaving cities. That’s a big problem for the economy

By Kunal Purohit

Published: 10:00am, 7 May, 2020

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  • Trauma from a lockdown handled poorly by the Modi government is making many migrant workers want to return to their hometowns

  • Some 4 in 10 workers are migrants and to stop them from leaving, several states have cancelled train and bus services

Many migrant workers do not want to return to the big cities after India’s lockdown left them without jobs. Photo: EPA-EFE

In Surat, a textile hub in India’s western state of Gujarat, losses are mounting for Bhagwandas Maloo, whose five garment factories producing traditional festive outfits have been shut for seven weeks due to the 

coronavirus lockdown.

 

He was relieved when the government announced it would allow some businesses to resume production this week. But traumatised by the lockdown, Maloo’s group of about 250 migrant workers, who are skilled craftsmen from India’s northern and eastern regions, announced they wanted to return to their villages.

“I tried to talk to them, but they said their families are very worried,” Maloo said, adding that as the local labour force was less skilled, production could only restart in October and this would result in sales falling by some 80 per cent this year compared to the last.

Maloo’s story echoes across industries in India, where 40 per cent of the workforce is made up of migrant labour.

A photograph showing the aftermath of the explosion in Kashmir on February 14. Photo: Reuters

A health worker checks the temperature of a labourer in Ahmedabad, India. Photo: Reuters

When Prime Minister Narendra Modi’s government abruptly announced a lockdown on March 24 as coronavirus infections rose, millions of informal migrant workers – who were left with no jobs, money or food – began flocking back to their villages, some undertaking the journey on foot.

Some chose to remain in the urban centres and industrial hubs, but as they stay confined in their rooms with no salaries and a shortage of food supplies, these workers now want to return home, too.

The coronavirus crisis has thrown a spanner in the works for Asia’s third-largest economy, where a steep decline in economic activity is likely to plunge the country into a deep recession. According to a recent estimate by an Indian think tank, unemployment reached 27.1 per cent between March and April, with 114 million jobs lost.

“Historical comparisons with GDP data suggest that India’s economy contracted at an annual rate of 15 per cent in April,” said Joe Hayes, an economist at IHS Markit, on Wednesday. “It is clear that the economic damage of the Covid-19 pandemic has so far been deep and far-reaching in India.”

INDIA’S LABOUR BACKBONE

Local governments are panicking at the prospect of a fresh economic crisis. In Navi Mumbai, a city on the outskirts of Mumbai, a trade association of more than 4,000 micro, small and medium enterprises (MSMEs), which employs a combined total of about half a million workers, has written to ask the local government to stop workers from leaving.

Some authorities have issued fervent appeals to get migrant workers to stay, while others are cancelling train and bus services that are meant to transport migrants home. This comes amid reports of several states charging workers exorbitant fares to take the trains, with the opposition Congress Party saying it would help fund the cost of tickets for impoverished workers.

In Surat’s population of about 5 million, migrants make up nearly six in 10 people, among the highest proportion in the country. Workers have waged at least four demonstrations over the past seven weeks to demand the right to return home, with some clashing with police. A similar protest also took place in Mumbai last month.

Champalal Bothra, secretary of the Federation of Surat Textile Traders Association, said entire sectors were run on skilled migrant labour.

“For instance, weaving is done by migrant workers from the state of Odisha, mills are run by those from Uttar Pradesh and Bihar, whereas migrants from Rajasthan engage in trading,” he said. “With any of these communities missing, the industries will collapse.”

Yet despite India’s dependence on migrant workers, this group has been poorly treated. A survey by the Stranded Workers Action Network, a group of researchers and academics, found that 89 per cent of workers polled had not been paid during the lockdown, 96 per cent had received no food supplies from the government, and 74 per cent had less than half their salaries left after three weeks of the lockdown.

The lack of work and wages has driven many into a state of desperation, including Vinod Mondal, 33, a building construction worker who travels 1,700km from his home in Jharkhand to work near Mumbai every year.

Mondal’s employer refused to pay him two weeks after the lockdown, leading him to run out of money and food. His days were filled with anxiety about his meals, his future looked uncertain, and the constant phone calls from his family did not help.

With the government now allowing builders to restart construction projects, Mondal’s employer says he wants him back.

“He told me to stay,” Mondal said. “But after what he did to me, I don’t want to remain a single day. So I refused.”

A migrant worker carries his son as they make their way back to their village during India’s lockdown. Photo: Reuters

SMALL TRADES HARDEST HIT

Vinod Kumar, president of the India Small and Medium Enterprises (India SME) forum, a trade association of over 86,000 members, sympathised with workers such as Mondal, but pointed to the difficulties faced by MSMEs that power the economy.

MSMEs contribute up to one-third of India’s GDP and nearly half its exports. About eight in 10 of the firms, which include industries such as textiles, car parts and housekeeping or wellness services, are self-financed.

Kumar estimated that about 65 per cent of SMEs did not pay workers their salaries in April, the full month of the lockdown.

“The problem is, larger companies, which are the main buyers for SME products, have stopped making payments to their suppliers and vendors. As a result, the cash flows have stopped completely,” he said.

A migrant worker cooks food for her family after returning home from New Delhi during India’s lockdown. Photo: Reuters

Kumar said cities in southern India had been hit the hardest. “Our reports indicate that up to 45 per cent of the workforce has gone back home. These cities are going to face a crippling shortage of labour in the next six months,” he said.

For migrant workers like Mondal, the experience has made him wary of risking his life once again in the big cities.

He has no plans to leave his hometown any time soon, and said he would do odd jobs while he works on his family’s farm, which grows mostly rice and some pulses, enough for his family’s annual needs.

“When we go back home, we have farms that can help us with our food supplies,” Mondal said. “It might not fetch much money, but it is a much better life.”

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