Despite acknowledging India’s migrant distress, Budget 2021 fails to do much for workers

Highlighting the acute vulnerability of migrant workers in her Budget speech, Finance Minister Nirmala Sitharaman announced various allocations to ease the distress of migrants and emigrants/non-resident Indians hit by the Covid-19 crisis and lockdown. Food security and affordable housing were the most significant of these.

However, our analysis shows that most of these measures are not new – some have been around for a while and others are an extension of established practices such as a minimum wage floor and insurance. Yet, an acknowledgement of the unique issues that migrants face is critical because it paves the way for mainstream policies aimed at this vulnerable group, say experts.

The pandemic and ensuing lockdown have affected countries across the world. The Indian economy is estimated to have contracted by 8% in 2020 but is projected to be the only country to register double-digit growth (11.5%) in 2021, according to recent estimates of the International Monetary Fund.

Budget 2021-’22 arrives in the midst of an employment crisis – the lockdown resulted in the closure of informal sector industries including construction and textiles, as well as informal services such as those provided by gardeners and drivers. This left millions of internal migrants stranded in destination cities. With no work, food or shelter, 67 lakh migrants returned to 116 districts in six states, as per the Skill Development Ministry’s preliminary database.

India has over 45 crore internal migrants, of whom approximately 5.4 crore (12%) cross state borders, according to the Census 2011 data. This movement renders migrants particularly vulnerable, cutting off access to crucial social security schemes including the public distribution system for subsidised food grains, showed a November 2020 policy analysis by India Migration Now, a migration research non-profit, based on its Interstate Migrant Policy Index.

India’s emigrant population –1.8 crore, according to latest estimates from the United Nations Department of Economic and Social Affairs – were also rendered vulnerable during this time, with the government’s repatriation mission bringing home nearly 40 lakh from various destination countries.

In this story, we look at Budget announcements to assess their impact on migrants – the general schemes for rural and urban development that will impact migrants at source and destination, the boost for industries that are major migrant employers, and finally, the allocations for health and nutrition and how these are likely to impact migrants and their families.

Apart from housing, most are existing schemes

Of the six broad categories covered in the Budget speech, two dealt specifically with migrant issues – “Inclusive Development for an Aspirational India” and “Reinvigorating Human Capital”. The first included the One Nation One Ration Card scheme – a programme for ration card portability that would allow poor migrants access to subsidised foodgrain through PDS anywhere in the country.

The lack of access to PDS in destination regions – since ration cards are usually obtained at source and tied to fair price shops there – exposes migrants to food insecurity, IndiaSpend
reported in November 2020.

During the lockdown, multiple micro-surveys conducted by academics and NGOs found that migrants’ access to PDS was limited. These include the Stranded Workers Action Network which documented the experiences of 36,000 workers, Dvara Research’s study, Covid-19 Impact on Daily Life Survey and Habitat for Humanity, which surveyed migrant workers in Pune and Ulhasnagar.

The Budget extended till March 2022 a tax holiday of one or more years for affordable rental housing projects – commonly used by migrant workers. Affordable rental housing projects are also a part of the Pradhan Mantri Awas Yojana-Urban and earlier in June 2020, the Ministry of Housing and Urban Affairs had announced an Affordable Rental Housing Complexes Scheme to target approximately 3,00,000 beneficiaries, including urban migrants and urban poor.

“It is not very clear whether the rental housing scheme will impact the most vulnerable, but a tax incentive certainly indicates a shift in the government’s thinking around the needs of mobile/temporary populations in cities,” said Mukta Naik, a fellow at the Centre for Policy Research, a Delhi-based think-tank, “This is an important shift in the way Indian cities are conceptualised.”

Another measure targeted at workers, also likely to benefit migrant workers, is the setting up of an information portal to collect data on unorganised workers to help formulate policies on health, housing, skill, insurance, credit and food.

This is complemented by an approximately 10% rise in expenditure for labour, employment and skill development under the Ministry of Labour and Employment. But there are no specific provisions for the information portal in the demand for grants placed by the ministry.

The finance minister extended some existing protections to migrant workers, including those working in the gig and platform-based occupations as well as traditional ones such as construction. These protections include access to social security, minimum wage as well as coverage under the Employees’ State Insurance Corporation. Women migrant workers are to receive adequate protection while on night-duty, the minister said.

Three targeted measures were announced for emigrants and NRIs. There will be a tax relaxation for NRIs, correcting the burden of double taxation that many faced on foreign-accrued retirement accounts. NRIs will now be allowed to incorporate One-Person Companies in India, as part of a larger initiative aimed at stimulating the start-up ecosystem in India, which was earlier restricted to those resident in India.

For prospective emigrants, the partnership with the United Arab Emirates and Japan (as well as proposed ones with other countries) could result in skill certification, upskilling and deployment of new migration corridors, the government said.

However, many of these are not new schemes. Several – including, notably the One Nation One Ration Card scheme, the partnership with the UAE, and the Technical Intern Training Program with Japan – are existing initiatives. While the One Nation One Ration Card was first announced in June 2019, the Technical Intern Training Program was formalised in 2017, with a “Specific Skilled Worker” visa between India and Japan getting approved in January 2021.

The UAE Skills Partnership also dates back to 2018, according to an announcement by the Abu Dhabi Dialogue, a consultative process between various labour-sending countries in Asia. Others, including minimum wages benefits, social security and the Employees’ State Insurance Corporation, only extend existing benefits to migrant populations.

Too little for urban livelihoods

The budget estimate for 2021-’22 sees a 19% rise in allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme over 2020-’21 – from Rs 61,500 crore to Rs 73,000 crore. However, this is a 35% reduction from the 2020-’21 revised estimates (the amount estimated to have been spent) for MGNREGS, Rs 1,11,000 crore – the year that saw immense migrant distress.

Added to this, there is also an 89% rise in revenue expenditure for village-based and small-scale industries over 2020-’21. Many migrant workers who returned home to their villages sought local employment under MGNREGS, as IndiaSpend reported.

The Budget doubles the investment in micro, small and medium enterprises, which also include self-employed workers. Nearly half of India’s rural-urban migrants work as casual wage workers or are self-employed in the unorganised sector, as per this 2011 paper.

However, this allocation may not be adequate as 64% of it is channelled towards an emergency credit line scheme – something that may see limited uptake in unorganised sector enterprises, according to IndiaSpend’s recent Budget analysis.

The budget is focussed on rural livelihoods and employment generation but there is little for urban livelihood issues that are all grouped under the larger category of urban development.

Interstate migrants lose out on social security entitlements when they work in destination cities, IMN’s IMPEX analysis showed, as IndiaSpend reported in October 2019. An earlier analysis of Census 2011 data had also found that a majority of migrants to India’s metro cities typically settle in urban peripheries where access to crucial services is already limited, as IndiaSpend
reported in October 2019.

Boost for migrant-centric sectors

Agriculture, manufacturing, public services, construction and traditional services such as wholesale and retail trades, hotels and restaurants, transport, storage and communications are sectors dependent on migrant workers, as per a recent analysis by the Centre for Policy Research.

The budget for the forthcoming year aims to encourage manufacturing through production-linked incentive schemes, set to cover 13 sectors with an outlay of Rs 1.97 lakh crore. There is no clarity on which sectors stand to benefit but the measure could create jobs, including for migrant workers.

Sectors such as textiles and construction also received a boost with seven mega textile parks – to be called Mega Investment Textile Parks – to be set up in three years. Textiles are the second-largest source of employment in India and 70% of the workers in some of the biggest apparel hubs – National Capital Region Delhi, Tirupur and Bengaluru – are circular or temporary migrants, according to this 2017 report.

An Rs 18,000 crore allocation will go to new public-private partnership projects for public bus transport as well as Rs 88,059 crore to metro rail projects in Chennai, Kochi, Bengaluru, Nagpur and Nashik. A new Development Financial Institution will provide loans to infrastructure projects to the tune of Rs 5 lakh crore in the next three years. These measures benefit the construction sector, one of the biggest employers of migrant workers in India.

With India likely to become the world’s third-largest construction market by 2022, the budget is backing large-scale road and highways infrastructure in a big way. Up to 91% of the total allocation for the Ministry of Road Transport and Highways is for capital, the highest ever allocation for the ministry. The construction industry in India employs 5.1 crore workers and almost half of them are estimated to be seasonal migrants.

The tourism and hospitality sector, affected by the pandemic crisis, has not received any direct support (immediate or short term) from the budget. But the emphasis on roads and railways development could improve connectivity, which is crucial for this sector.

The Indian retail sector, also a major employer of migrant workers, was among the worst affected by the lockdown, according to a 2020 paper published in the Journal of Health Management. It has also not received any direct support, but the focus on infrastructure development and aid to MSMEs could help in revitalising the sector by generating jobs and driving consumption.

However, big infrastructure projects may not be enough to solve the employment crisis, IndiaSpend’s budget analysis said, as mechanisation and large capital spending has reduced the need for labour in these projects.

Other schemes

Allocations to health and nutrition will benefit all Indians, including who face exclusions in both areas, as IMN’s policy analysis in IndiaSpend showed. For the Covid-19 vaccine, Rs 35,000 crore has been allocated, with the promise of further funds, while the new PM Atmanirbhar Swasth Bharat Yojana has been announced with an outlay of Rs 64,180 crore over the next six years to support 17,000 rural and 11,000 urban wellness centres as well as public health labs across the country.

Although neither targets migrant workers specifically, their countrywide net will benefit migrants and their families. On the other hand, the reduced allocation for nutrition, including for children, will affect all poor families, including migrants’.

However, the budget has no provision for returnee emigrants at the central level, leaving key source states such as Kerala, Telangana, Andhra Pradesh, Uttar Pradesh, Bihar, and Rajasthan to tackle the issue independently.

Of the 1.8 crore emigrant population that the country had in 2020, about 40 lakh were brought back during the Covid-19 crisis, as we said earlier. Although the Budget does propose measures that will impact both NRIs and prospective migrants, there is no reintegration policy for the sizable returnee populations in source states.

This article first appeared on IndiaSpend, a data-driven and public-interest journalism non-profit.