OPINION: A roadmap to strengthen India’s rural economy

Desh Deepak Verma

Rajya Sabha Secretary General Desh Deepak Verma (File Photo)

Rajya Sabha Secretary General Desh Deepak Verma (File Photo)

The present crisis of the Coronavirus pandemic has thrown up several challenges, both social and economic before the world and in particular, for emerging economies like India. The biggest of them besides the health challenge, is to revive the economy which will involve some re-engineering and some reconfiguring of our socio-economic infrastructure. One important dimension of this reconfiguration relates to the behaviour of migrant labour during, and post this COVID-19 crisis, which may turn out to be a defining factor for our economy in the long run. This may not be so relevant for the developed economies but is crucial for developing countries like India and others where the proportion of labour-dependent informal sector in the industry is very high.

In India, we have an estimated migrant labour population of about 49.7 crores of which about 94 per cent is in the unorganised sector. If we exclude the inter-district migration, the inter-state migrant population is estimated to be around six crores. It is well known that a large percentage of this population is severely impacted by the COVID-19 crisis and wants to return to their respective villages, even though the government has allowed opening of several business and industries across the country during Lockdown 3.0. During Lockdown 1.0 and 2.0, despite restrictions, many migrant labourers returned to their villages by whatever means, some even on foot travelling long distances. The others remained stuck in their respective work places without any source of livelihood. Different NGOs and government agencies tried their best to provide food and ration to them but since their stream of daily income had dried up, most of them remained desperate to get back to their homes as soon as possible. The reasons are not far to seek. In their perception, the village ecosystem assures them emotional security, and to a large extent, food security as well. On May 1, Labour day, the Central Government announced permission for migrant labourers to go back to their villages and even arranged a train for those from Jharkhand. Subsequently, trains and buses have been arranged by the central and state governments to take the labour stranded in different parts of the country to their respective villages. Sadly, however, the spectacle of some groups of migrant labourers still walking long distances to reach their homes, continues to haunt the national conscience.

File Photo-Migrants travelling back to their homes. (PTI Photo)

File Photo-Migrants travelling back to their homes after lockdown is imposed in India to check the spread of COVID-19

Now the crucial question is as to what would be the behavioural pattern of these migrant labourers returning to their native homes, once the lockdown is completely or substantially lifted and after things start returning to normal. The widely held belief is that those who have already gone to the villages may not return immediately, on account of the perceived uncertainties over the time frame for complete return to normalcy, apart from the requirements of harvest season in the countryside. Those who have not moved over and are still at their work places may hang on to collect their pending wages and then they may also return to their villages to be with their near and dear ones. The memories of hardships faced by them during the lockdown period and the difficulties experienced by them during their return to their villages will not fade away from their minds soon. Indications are that many of the agricultural labourers would not like to, or at least would have some inertia, in coming back to their work places.

This would be an unprecedented situation in independent India which ironically, also provides an unprecedented opportunity for the nation. It is said that every challenge opens up a window for innovation and out-of-the-box solutions. This appears to be one such occasion. Over the years, we have witnessed a phenomenal increase in rural to urban migration in our country on account of declining opportunities in rural areas and the rapid urbanisation/industrialisation in cities. The dwindling returns in agriculture and lack of livelihood opportunities in the rural areas have added to the problem. This has brought about a mushrooming of slum clusters in metropolitan and big cities, resulting in severe strain on the urban infrastructure of water, sewage, transport and social infrastructure in urban conglomerations. In our efforts to quick-start the economy, mainly the Micro, Small and Medium Enterprises (MSME) sector, in the post-lockdown and postCOVID 19 crisis, the challenge may be to integrate the migrant workforce into our economy in some way. One possibility can be to try and integrate these reluctant-to-return migrant labourers into our rural economy. It seems like the Coronavirus has pushed a reset button to ensure seamless reverse-migration from urban cities to rural areas in India and we, if we so desire, have an opportunity to capitalise on this situation. This may also probably be an occasion to realise the dream of Mahatma Gandhi by making his concept of Gram Swaraj a reality, in a foreseeable time frame.

Special train ferrying migrant workers from Maharashtra to UP (Twitter image)

Special train ferrying migrant workers from Maharashtra to UP (Twitter image)

It is common knowledge that many districts of the country have certain type of skill-sets for a particular type of industry which have been inherited, evolved and nurtured through successive generations. When one labourer, skilled or otherwise, migrates to a big city in search of employment, he subsequently pulls in some more of his village folks to that city and gets them also employed in the same shop or factory. This effectively means that after this reverse migration triggered by COVID-19, we may have a pool of skilled labourers, proficient in activities relevant to a particular industry, available in a village or cluster of villages, and that can be leveraged for setting up a particular type of medium or small scale enterprises, provided other prerequisites such as credit, technical know-how and market support etc. are made available. Uttar Pradesh Chief Minister Yogi Adityanath had some time back mooted a plan of setting up one type of industry in one district in Uttar Pradesh. This could be an ideal time to give this plan a functional shape and a sharper focus.

The need is for the state governments and the Union Ministry of MSME to come up with a workable plan to encourage a cluster of cottage, small and medium enterprises in villages and mofussil towns of the hinterland. Significantly, the Prime Minister announced a stimulus package of Rs.20 lakh crore which is a phenomenal 10% of GDP. Several components of this package like special Rs.3 lakh crore window of collateral-free loan and Rs.50,000 crore equity infusion, are aimed at spurring the MSME sector. Some percentage of this money can be fruitfully utilised for the tiny and cottage industries also. Among the ongoing schemes, MUDRA could be of help. Further, such enterprises will need some entrepreneurial zeal on the part of labourers, especially those educated, and also some honing of their skills. This obviously may take a while. So, in the interregnum, an action plan could be drawn to take up all the pending village development works under MNREGA in which this labour could be employed temporarily. This again would require an upscaling of the MNREGA programme and a corresponding fund infusion. The educated skilled labourers, having been exposed to the processes and nuances of the small enterprises, can definitely come up with project to set up small and cottage units, especially in the food and fruit processing sector, making good use of the huge wastage in this sector because of the low shelf life of the harvested crops.

The need is to act with speed and with a definite plan. COVID-19 has provided an opportunity, which we need to leverage sooner than later. Obviously, time is of essence.

- Desh Deepak Verma, Secretary General of Rajya Sabha and ex-Secretary to Government of India