The exodus of low-skilled migrant workers from larger metro cities to their home towns continues unabated. However, as states continue to issue more relaxations and allow more and more business-es to reopen, it is anticipated that many of these internal migrants would take the journey back to the metros, potentially impacting infection rates once again. We therefore need to analyze the reper-cussions of potential reverse migration that is anticipated in the informal sector of the Indian economy.
As per ILO, over 80 percent of the Indian economy is in the informal sector, while only 6.5 per cent constitutes the formal sector. The informal sector in India majorly constitutes migrant workers and if these migrant workers make a reverse movement to their home town when the lockdown is lifted, it would disrupt various sectors of the economy.
Agro-based industries :
The agro-based industries have already received a set back due to labour and supply chain disrup-tions. Migrant workers are hesitant to work even with government measures in place, due to the fear of getting affected. This would result in a steep increase in prices and availability of goods in the coming few weeks.
With mass reverse migration of workers from industrial belts of Delhi-NCR and Mumbai, this sector would face an acute shortage of labour when the lockdown is lifted. The automobile, engineering and textile industries are the most affected due to the lockdown. These industries could experience business continuity issues with shortages in labour due to travel restrictions and inadequate transport facilities available.
Small scale/cottage industries:
Taking the example of the cottage industries employing migrant workers, which supplies the house-hold and daily necessities of the people in the city, who will be affected when workers available before the pandemic are not available immediately after the lockdown is lifted.
The labour-intensive real-estate sector will have issues with the extension of the lockdown and re-verse migration of workers. Even with basic support from the government, many interstate migrants may return to their home states post-lockdown or those who had migrated earlier might delay their return. Reduction in the availability of labour for project execution along with the disruption in raw material supply chains and low purchase power of people is expected to result in a slowdown of real estate construction projects.
Transportation and logistics:
Transportation, a critical sector in a developing country like India will be facing new challenges due to COVID -19 and its uncertainties. Leading corporates are highly dependent on private transporta-tion for commuting, and these private transport providers employee drivers who are interstate mi-grants. The dearth of workers in local logistics, handling and delivering would lead to a delay in the supply chain of goods and services.
The domestic sector contributes to one’s everyday activities. Domestic helps and maintenance workers like electricians, plumbers, housemaids may delay their return, causing inconveniences for work to return to normal.
The aforementioned sectors of the Indian economy will be directly and indirectly affected due to the reverse migration of low-skilled workers that has already taken place and may continue post-lockdown. Migrants form the backbone of the informal sector in India, and the need of the hour is to watch out for them! Only time will tell how the impact of the pandemic pans, however these low-skilled migrant workers would be pivotal role players post-lockdown.
About the Author:
Ashwin Immanuel Dhanabalan is pursuing his Masters in International Studies at Christ University Banglore and is a graduate from Ramjas College, Delhi University. He is currently working as a Management Intern at MitKat's Advisory Services with the Information Services department.