How can Modi govt revive economic activity when CMs want migrant workers to return home?

While the Modi govt looks to gradually restart the economic activity, states like Uttar Pradesh and Madhya Pradesh have started bringing their migrant population back.

Illustration: Soham Sen | ThePrint

As India enters the last week of the 40-day lockdown, the Narendra Modi government is looking at ways to gradually restart the economic activity. But many large states like UP and MP, which send huge labour workforce to India Inc’s factories and construction sites, have started bringing their migrant population back. Centre has told the Supreme Court that migrant labourers do not need to go home as their needs are being addressed.

ThePrint asks: How can Modi govt revive economic activity when CMs want migrant workers to return home?

Migrants who go home will regain a sense of security and come back to places of work in 3-4 weeks

Arvind Mayaram
Former finance secretary

There is no option but to allow migrant workers to return because of the fear that pervades their lives right now. Lockdown has not been kind to them and many are going hungry and living in terrible conditions. After returning home and regaining a sense of security, they will come back to places of work in about 3-4 weeks, in my assessment.

Meanwhile, the Modi government should start withdrawing its lockdown directives. There should only broad central guidelines in place and the states should be allowed to follow their own strategies for a calibrated opening up of the economy. At the moment, there are too many micro-directives from New Delhi for the states — right down to barbershops and eateries — which are counterproductive.

It’s important to note that even before coronavirus, the Indian economy was precariously slowing down and growth projection was 4.8 per cent for the last fiscal. The problem has been demand destruction, which has only worsened. According to CMIE, 12 crore jobs were lost just a few weeks after the lockdown was imposed. Therefore, the Modi government has to come up with a large fiscal stimulus that will put money in the hands of people — just enough that they start spending. Only then can demand begin to come back and trigger virtuous cycle of economic activity. It certainly won’t happen overnight.

Industry has a key role to play in restarting the economy so that migrant labourers come back

Chandrajit Banerjee
Director General, CII

Migrant labour population is extensively deployed in transportation, construction work and MSME sectors. Getting them back to work as we exit from the lockdown is a challenge but we need to ensure them their safety and health. Most of them want to return home due to uncertainties coupled with fear. I think there is a large role for industry at this juncture. We have to help in working towards restarting the economy to enable regular jobs or livelihood which in turn would help them earn incomes and shore up their depleted savings after a month of lockdown.

To do this, workers should be reassured that precautionary measures will be in place for which strong messaging is required. Moreover, transport to return to the workplace is required with all health protocols, along with facilities for daily commuting. While arrangements are being made to help distressed workers to return to their villages, a reverse organised movement back to the place of work can be coordinated with state governments.

Basic minimum living conditions would encourage them to get back to work quickly. Currently, the requirement of rent and absence of support while looking for new work in the case of job losses is constraining workers from coming back to zones of employment. We are working with skill missions in states to map the skills of the laborers who are available and accordingly ensure that they reach to the closest places where these skills are needed in industry.

Unless migrants are sent under point-to-point surveillance, they will need to be quarantined again at home

Nilotpal Kumar
Assistant Professor, Azim Premji University

The Narendra Modi government is correct to shift from its policy of only containing Covid-19 to balancing the attempt to contain the virus spread with the revival of the economic activity. And dissuading chief ministers from calling back migrants to their home states is crucial for the success of this policy.

Movement of millions of migrants is likely to continue for weeks. Unless they are sent under point-to-point surveillance, which is a tough task, they will need to be quarantined again at home. Most migrants belong to states that have poorer capacity for welfare distribution and health services. Citizens have a right to return to their homes, but there will likely be widespread consequences, which some CMs like Nitish Kumar have rightly underlined.

In urban centres, a resumption of economic activity will require coordination between the non-containment wards and sufficiently large companies. Firms, public and private, with an annual turnover of $1-2 million, may be in a better condition to provide ‘point to point’ transport and emergency health care. Certain economic activities like construction may still require sourcing local labour from non-containment zones, and in small numbers in the beginning.

In rural areas, long distance demand and supply chains of essential goods are being opened up through digital platforms by some state governments. But both the Centre and state agricultural agencies will need to coordinate with district-level marketing boards to resume supply chains to organised retail chains across cities and towns.

Migrants looking for assurance; addressing sentiment and liquidity concerns will help recovery

Ashutosh Sinha
Business journalist

For kickstarting the economy, governments together need to improve sentiment, boost liquidity, before it reverses economic fundamentals.

Migrant workers are looking for manufacturing jobs and some guarantee from state governments. Companies may kickstart manufacturing and construction activities but need working capital to survive the period with reduced demand. Governments wants economic activity to resume for employment generation and its tax revenues.

In uncertain times, everyone is looking for some sort of assurance. The assurance not only around jobs but also for safety of workers. Something that can provide a calming impact and revive sentiment.

The government, briefly, needs to play the role of a market maker to revive the economic cycle. Manufacturing and construction companies need to get the wheels whirring with better credit availability. Once manufacturing and construction is revived, more jobs will be available. Better credit for businesses will add liquidity to the economy.

For example, Uttar Pradesh and Odisha have announced a plan for the urban poor, many of who could be migrant workers. This shows governments are acting quick giving spending power to people. Ultimately, consumer spending will change economic fundamentals.

The first two steps –addressing sentiment and liquidity– if done well engender an economic turnaround.

By Pia Krishnankutty, journalist at ThePrint