"If jobs are reserved for locals, and if more populist restrictions follow, India will become a hostile labor market for poor Indians. And if internal labor movement get s restricted, growth will, over time, suffer, as will the fight against poverty"
Kamal Nath started his tenure as Madhya Pradesh chief minister posing as an anti- migrant, thereby landing himself in a soup and putting his party’s national chief, Rahul Gandhi, in a bit of a pickle. Surprisingly for such a veteran politician, Nath’s jobs-for-local-boys (no incentives for industry without 70% local employment) pitch lacked the minimum of political sense or grace. By dissing migrants from Bihar and UP, he made Congress look foolish at best in these two electorally vital states. By forgetting that he himself is not MP-born and that he got the CM’s job by edging out a local born, Jyotiraditya Scindia, he invited a fair measure of ridicule. And by ignoring the fact that MP is also a big source of inter-state migration in the country, the CM may have put migrants from his own state in the crosshairs of other state administrations.
But Nath and CMs from other parties, BJP included, who champion exclusionary policies against non-local born Indians are guilty of much more than political ineptitude they are a potential risk to economic well-being and efficiency.
Here’s a piece of data that CMs like Nath and Gujarat’s BJP CM, Vijay Rupani, who proposed not too long back a law that makes 80% local employment mandatory for any firm, as well as all Maharashtra politicians, should know: India is among the worst performers in the world when it comes to inter-state migration.
China, which doesn’t set much store on constitutional rights, has a system called ‘hukou’ that restricts migration. But even then democratic India, that doesn’t restrict movement, performs worse than its totalitarian neighbor when it comes to how freely people move across provincial borders.
India ranked last in a list of 80 countries in what experts called migration intensity, a measure of how easily people move within a country to settle down in a place they were not born in. So, Nath and others should know that their rhetoric against people from other states is fundamentally misplaced.
The Economic Survey of 2017 had sought to enthusiastically argue that inter-state migration rates in India are fast increasing. But as many experts had pointed out, some of the Survey’s analytics were questionable; for example, the analysis in ET by Amitabh Kundu and PC Mohanan. Basically, headline data that suggests 30% of India’s population are migrants hides the fact that two-thirds of this is intra-state migration, and a big chunk of movements across state borders is accounted for by women moving post-marriage.
So, India is far from being an integrated labor market, and politicians like Nath and Rupani exaggerate the migrants-taking-locals’-jobs issue to serve populist electoral aims. But the fact is that India will benefit immensely from more, not less, internal migration.
Even a quick study of any successful development and growth episode in any major country will show high internal migration accompanied these positive economic experiences. The reasons are simple. High migration rates mean the labor market can efficiently match workers to jobs.
Construction in the national capital region attracts migrant labor, including from MP, because locals don’t want these jobs. Farms in Punjab and Haryana attract migrant labor. Domestic services in all major urban centers will get terribly affected without migrant labor. Gujarat CM Rupani should know that Ahmedabad’s thriving local economy has a huge contribution from a migrant labor force that’s over 1.5 million, according to NGO Ajeevika Bureau.
Uttar Pradesh, Bihar, MP, Punjab, Rajasthan, Uttarakhand, Jammu & Kashmir and West Bengal, data shows, are major sources of migrant labor and states that are favored destinations are, Delhi, Maharashtra, Tamil Nadu, Gujarat, Andhra Pradesh and Kerala.
Look at this list – it’s India at work, north, south, east and west. If jobs are reserved for locals, and if more populist restrictions follow, India will become a hostile labor market for poor Indians. And if internal labor movement gets restricted, growth will, over time, suffer, as will the fight against poverty.
There’s also the social aspect. Nath and Rupani style exclusionary policy against migrants risks creating social tensions in a country where social relations in many areas are already a tinderbox, awaiting a political spark. We have caste and religious tensions, and now do we want to add local versus non-local tensions to that?
Enlightened policy will in fact foster higher rates of internal migration and recognize that non-portability of welfare benefits across state boundaries is a major reason for relatively low inter-state labor movement. Poor Indians get patchy welfare benefits from state administrators if they are domiciled in the state. If they move to another state, they lose most of those because states don’t recognize migrants as legitimate welfare recipients. With Aadhaar now almost universal in India, and with welfare provisioning linked to Aadhaar, policy makers must seriously think of making benefits portable across state boundaries.
Will this happen? Not any time soon, probably. State level politics is getting hypercompetitive. And for some parties, Congress, for example, hyper local populism may make electoral sense even for national politics. Congress may calculate that instead of allowing BJP to make 2019 polls a Narendra Modi versus Rahul Gandhi battle, it will concentrate on making the general election a sum of local fights. In that case, Kamal Nath may have done what some other Congress local leaders will do later.
For India to grow faster, Indians must move more. But politics may yet kill this moving story.
(https://timesofindia.indiatimes.com/blogs/open-patent/to-kill-a-moving-story-why-kamal-nath-and-other-cms-likerupani-are-so-wrong-on-reserving-jobs-for-locals/)
By Dr (Col.) A. Balasubramanian
