Deciphering the plan of the Center for migrant workers, writes Ram Madhav – analysis
Eight decades after formulating his general theory, John Maynard Keynes remains a demigod for many liberal economists. Keynes’ “drip” theory is seen by them as a panacea for the migrant working class affected by coronavirus disease (Covid-19). Keynes suggested that to boost a stagnant economy, the government should boost demand by cutting taxes, increasing public spending, and putting money in the pockets of the middle class.
Keynes’ disciples in the Opposition are criticizing the Minister of Finance (FM) package for not making direct money transfers to the accounts of the poor. The government has already provided substantial support to the rural poor, including migrant workers. The rabi crop has been purchased by the government at a cost of Rs 75,000 crore, benefiting more than 90 million farmers. In addition, Rs 19,000 crore has been deposited into the bank accounts of eligible farmers under PM Kisan. A harvest insurance bill of Rs 6,000 crore has been paid. Women from more than 300 million poor families have been receiving 1,500 rupees for three months on their Jan Dhan accounts.
To top it off, the FM announced the allocation of just over Rs 1.00 trillion to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), bringing the total man-days available to the rural poor to 300 Rs million. Economists’ estimates suggest that through these measures, around Rs 12,000 have been entered directly into the accounts of each poor family. All of this came from the Center, with the states doing their part.
However, there is anguish manifested in the large-scale flight of migrant workers from destination states such as Maharashtra, Gujarat, Punjab, Rajasthan, Haryana, Tamil Nadu, Karnataka and Telangana to the home states of Uttar Pradesh (UP), Bihar, Jharkhand, West Bengal, Orissa, Chhattisgarh and the northeast. There has been a lot of politics about this.
The problem of migrants in such circumstances is complicated. And it is not exclusive to India. Many countries in Europe such as Spain, Germany, Italy and France are struggling with the problems of agricultural workers who migrate in the harvest season from Eastern European countries. “The host countries are divided between the fear of losing crops, the fear of importing infections and the fear that precedes the pandemic, that of foreigners who take jobs. Populists perceive the opportunity as the economic consequences solidify the political battle lines, “according to an article in The Guardian.
India’s migrant population exceeds 130 million. Your move mass going back to their home states would have been an unmitigated disaster. To avoid this, the Center turned its attention to agriculture and micro, small and medium-sized enterprises (MSMEs). More than 44% of India’s workforce depends on agriculture. The government’s decision to allocate Rs 1 lakh crore for the development of farm infrastructure is to ensure that the workforce is engaged in productive agricultural activity. Of the rest, 70% of jobs are provided by the MSME sector. The government gave the sector a high priority by arranging additional easy loan options for the sum of more than Rs 400,000 crore.
Compared to fiscal measures taken by other G20 countries, India has performed better than most. According to a report by the International Monetary Fund, aggregate fiscal measures as a percentage of GDP have two dimensions: measures of spending and income; and loan, principal and guarantee measures. Germany, which topped the tax relief table, had announced 1% of GDP in additional spending and 6% in loan guarantees. India, with a stimulus package of 10% of GDP, is well ahead of its G20 peers.
It should be remembered that while a section of the migrants undertook their journey back home, a large number remained behind. There are two important reasons for this. One, the call to employers by Prime Minister (PM) Narendra Modi to continue paying wages; and two, the government stimulus for MSMEs and agriculture.
The migrants have been supported by states and non-governmental organizations during the shutdown. However, their anxiety to return to their families and towns has pushed many to challenge the confinement and go home. To manage this migration, a coordinated approach was needed between the Center and the states, and between the destination and origin states. Uttar Pradesh has set the example by organizing to transport not only its own migrants, but also those heading to neighboring Bihar, on more than 1,200 buses. It only received and transported more than two million workers to their destinations.
Gujarat has quickly arranged trains for these immigrants, while Maharashtra has been found lacking. The role played by the Indian railways is exemplary. So far it has transported more than two million migrants to their home states. Bihar and West Bengal are two states that did not show sufficient interest in receiving their own migrants, causing large numbers to be stranded in Mumbai and Delhi. Madhya Pradesh, while neither a destination nor a home, has unveiled 1,000 buses to help migrants reach their destinations.
Leo Varadkar, former Prime Minister of Ireland, joined the leaders of the European Union a few weeks ago in supporting the movement of cross-border agricultural workers. Back home, he criticized a Dublin fruit company for bringing Bulgarian workers to pick strawberries. Similarly, the Opposition criticizes the Center for the migration crisis, while the origin or destination of migrants is in the states under its control. What we need today is collective federal action to address the migrant issue, not the political blame game we are witnessing.
Ram Madhav is national secretary general of the Bharatiya Janata Party and director of the Indian Foundation.
With additional Rajat Sethi data entries
The opinions expressed are personal.