COVID 19 has without a doubt had many implications on the Indian economy, as it has on states worldwide. However, the most consequential impact it has had is the migrant workers’ crisis. Given the developing nature of India’s economy, industrialisation is a key aspect in supporting the foundation of the economy. These sectors, such as the mining industry, construction and textile industries are extremely labour intensive and require a large unit of cheap labour. This, therefore, leads to a demand for workers, many of whom migrate from different states of the country in search of jobs.
Prior to COVID, this was definitely beneficial to the economy as it increased the demand for workers fulfilled by migrant workers. This led to a higher rate of employment and the overall increase in the goods and services produced. However, with COVID 19 gaining momentum in India and the imposition of the lockdown, factories and workplaces were shut down resulting in a large number of layoffs. This then left migrant workers with no source of income and no means to return back to their hometown. Foreseeably, it caused major grievances amongst people and the government was forced to take action.
To cater to these grievances the government launched schemes (Yojana’s) and transportation plans to aid a smooth transition between states. The Indian Railways conducted an operation with 4,286 trains (Shramik Trains) to help 58Lakh workers return back to their hometowns. While it successfully covers the issue of migrant workers not being able to sustain themselves in the states they worked in, it then raises an important question of what it means for the economy and employment in varied sectors.
Although economic dualism in a developing country is not unusual, this economic crisis is definitely a significant setback in India’s plans to industrialise for economic growth and overall development of the country. The loss of livelihood combined with the massive reverse flow of workers (from urban to rural areas) leads to the aggravation of a phenomenon called economic dualism, meaning a co-existence of traditional and industrial sets of the economy. The worker’s return to their hometowns will either leave them unemployed or will push them to indulge in manual labour or agricultural labour as a temporary source of income which is most likely less than their wages in the industrial sector. Hence, increasing the gap between the rich and the poor, heightening the involvement of the labour force in the agrarian and rural sector while second handedly also intensifying dualism.
Pertaining to the same, disruption of the supply chain due to constant lockdowns and lack of workers, increased rate of unemployment, and fluctuations in demand patterns can be anticipated. This is evident in the projections of India’s GDP for the year 20202, which predicts a fall by 4.5% due to COVID and in totality, the impact of the migrant workers’ crisis will undoubtedly be adverse.
