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Economic Survey 2017: Significant uptick in migration of labour

Sumant Banerji     January 31, 2017

There has been a significant increase in migration of labour from one state to the other as well as one district to another in the last 5 years, the Economic Survey 2016-17 has revealed.

"The new Cohort-based Migration Metric(CMM) shows that inter-state labour mobility averaged 5-6.5 million people between 2001 and 2011, yielding an inter-state migrant population of about 60 million and an inter-district migration as high as 80 million," the survey says.

"The first-ever estimates of internal work-related migration using railways data for the period 2011-2016 indicate an annual average flow of close to 9 million migrant people between the states. Both these estimates are significantly greater than the annual average flow of about 4 million suggested by successive Censuses and higher than previously estimated by any study."

Search for employment and education are the two primary reasons why people tend to migrate from their home state or district. Between 2001 and 2011, the rate of growth of labour migrants nearly doubled relative to the previous decade, rising to 4.5 per cent per annum. The acceleration of migration was more pronounced for females that increased at nearly twice the rate of male migration in the 2000s. There was also a doubling of the stock of inter-state out migrants to nearly 12 million in the 20-29 year old age group.

"One plausible hypothesis for this acceleration in migration is that the rewards (in the form of prospective income and employment opportunities) have become greater than the costs and risks that migration entails. Higher growth and a multitude of economic opportunities could therefore have been the catalyst for such an acceleration of migration," the survey says.

Not knowing the native language of a state no longer appears to be a reason for not migrating to that area even as political borders do impede migration. At the same time conventional knowledge that people from poorer states with lower per capita income and expenditure tend to migrate to states that are better off has been reinstated.  States such as Bihar and Uttar Pradesh have high net out-migration while others like Goa, Delhi, Maharashtra, Gujarat, Tamil Nadu, Kerala and Karnataka have relatively higher net in-migration.

The higher level of migration in India, coupled with poor mapping creates a problem of duplicity that hinders correct measurement of the state of the economy. Former RBI governor Raghuram Rajan had in the past raised this issue. He did not endear himself with those in the government due to the same.

"There are problems with the way we count GDP which is why we need to be careful sometimes just talking about growth, he had said.

"We have to be a little careful about how we count GDP because sometimes we get growth because of people moving into different areas. It is important that when they move into newer areas, they are doing something which is adding value. We do lose some, we gain some and what is the net, let us be careful about how we count that."

Cheif Economic Advisor Arvind Subramanian has projected a wide GDP growth range between 6.75-7.5 per cent for the fiscal ending March 31, 2017. GDP growth in the previous fiscal 2015-16 was 7.6 per cent.

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