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Economy

Reverse Migration: An Opportunity to Develop the Rural Economy?


With the countries across the globe, forced to make a choice between safety and economy, the coronavirus pandemic has drastically increased the risk pertaining to the subsistence of many businesses, with many experiencing shocks in both supply and demand sides leading to increased unemployment and severe economic downfall…


Aakriti Bansal

Management Student | Marketing Professional

With the countries across the globe, forced to make a choice between safety and economy, the coronavirus pandemic has drastically increased the risk pertaining to the subsistence of many businesses, with many experiencing shocks in both supply and demand sides leading to increased unemployment and severe economic downfall. More than 10 crore people in India have lost their jobs and industries like manufacturing have taken massive hits.

It comes with no doubt that the government will have to support these industries to aid their existence and sustainability. However, it might be the time for these industries to go through an even greater trial, that is, resuming production and activities- the revival phase.

Recent times witnessed a reverse migration of around 25 million people wherein migrant workers and laborers who came to the urban areas in search of a livelihood, moved back to their rural hometowns. This created a shortage of ‘cheap’ workforce in a few states like Maharashtra and Gujarat and those left behind were unwilling to work due to safety concerns.

The revival phase endows the companies with the responsibility of not just bringing back customer trust but also the trust of its employees to resume activities.

It is obvious that the coronavirus will change the traditional ways we lived and worked. Hence, the companies, along with lucrative wages and safety measures, would have to explore various technologies that would not only reduce human exposure to touch but would also make the processes faster. The companies will need to change their modus operandi and adjust to the alternating labor and employee requirements in order to regain pre-COVID levels of production.

Having said that, there lies an even larger issue at hand that would require the government’s utmost attention. To address the 48% migrant population that has migrated back to the rural areas, since currently, India’s rural economy is incapable of absorbing such a number of people majorly for two reasons.

One, the rural economy is largely dependent on the agriculture sector which has been non-profitable for quite a while now. The reverse migration is likely to surge the employment in the agriculture sector with the sector absorbing the excess labor that has nowhere to go, as per CMIE. However, that might not add a lot to the economy as it might lead to disguised unemployment leading to no growth in average output.

Second, the output efficiency from the rural economy is way lower than that of the urban economy. 71% of India’s total workforce, that is, two-third of our population, is in the rural economy. Yet it contributes just 48% of the national income.

As per NITI Aayog, despite the rise of urbanization more than half of India’s population is projected to be rural by 2050. Hence, the growth and development of the rural economy and population are key to the overall growth and inclusive development of the country.

To combat this situation the government has launched various schemes to help and empower the migrant laborers and the poor facing challenges due to the pandemic wherein the migrants will be provided employment near their homes based on their skills and people’s talent will be used in the development of the rural sector, which will give more strength to the rural economy, as per the government.

However, according to the World Bank, the process of delivering social benefits includes three steps. First, is figuring out the potential eligibility via outreach, application, and registration for assessing people’s needs. Second, is to take decisions on the enrolment and benefits of the service package. The third and final step is carrying out the transaction implementation. 

The way in which India’s social benefit programs are set up, through the JAM infrastructure, it is easy to carry out the first and second steps. The government, however, is unable to effectively carry out the third steps due to the bureaucratic corruption prevalent at the lower levels.

With a large unemployed population to feed along with the additional challenge that the pandemic imposes, the effective implementation of the government schemes becomes all the more imperative to foster sustainable development.

In case the government is unable to address the employment crisis in these areas, India is likely to witness further deterioration in the economic conditions and might witness an influx of migrants back to the cities in the coming months. With the risk of worsening situations due to the pandemic and increasing uncertainties around vaccines, the government must increase focus on strengthening and developing parts of rural India to avoid a 2.0 of the Coronavirus pandemic.

Note: Digital Dialogues holds the right to use this piece of content as authorised by the owner. If you wish to use material from this article for purposes of your own that go beyond ‘fair use’ you must obtain permission from the copyright owner. The views expressed in the article are personal. Also, there might be references taken from various sources on the internet. The main intent is to share across information to the reader!

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