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How Migration in India can Mitigate Poverty

Migration in India
The migrant population is a large driver of India’s economy. India has one of the largest migrant economies in the world. Many Indian workers travel hundreds of miles to work in certain areas of the country to support their families back home. GDP growth rose by over 8% between 2005-2012. In addition, over 137 million people escaped poverty as a result of large-scale migration. There is tremendous potential in using migration in India as a poverty alleviation tool based on past numbers. The Mahatma Gandhi Employment Guarantee Act of 2005 (MGNREGA) is the primary national legislation of the nation geared towards solving its poverty crisis. However, it stagnated as of late due to COVID-19. Migration is a tool towards recovery from the consequences of COVID-19 and it offers a long-lasting solution to poverty in India.

About MGNREGA

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a poverty alleviation legislation. It went into effect in August 2005. The act guarantees a hundred days of wage employment in any given financial year to rural households who have adults willing to volunteer for unskilled manual labor. The MGNREGA focuses on empowering women both socially and economically. The act also focuses on providing green and decent work by conserving natural resources. Although the MGNREGA is successful to some extent, greater poverty alleviation demands the use of migration as well.

Many Indian policymakers fail to recognize the potential benefits of migration. They often view it as a response to tragedy instead of those seeking greater economic freedom and opportunity. The MGNREGA originally intended to provide 100 days of work, now only providing  50 days of work in the majority of Indian states. Migrants can find higher-paying and more stable work within large urban areas and cities. MGNREGA reform is necessary along with the implementation of new migration legislation in order to further mitigate poverty in India.

The Benefits of Large Scale Indian Migration

Based on the same rate of migrant increase in the 2010s, over 56 million individual migrants would have traveled in 2020. Those benefiting back home in rural villages would have totaled 224 million, had COVID-19 not occurred and MGNREGA not reduced Indian migration. In comparison, 37 million families will benefit from MGNREGA during the fiscal year 2020-2021 according to the rural development ministry. Migration benefits a much higher percentage of the Indian population in poverty than MGNREGA does.

Migrants additionally have an easier time assimilating to their destination once their financial situation improves with higher quality work and wages. Women working in agriculture in the Eastern Indian state of Bihar can more than double their daily wages by moving to Patna, the capital of Bihar. Men from Bihar can increase their earnings even more at an increase of approximately 66% by relocating to Punjab and can have an even higher earning potential if they decide to move to major cities such as Ahmedabad, Surat, Delhi or Mumbai.

The Impact of COVID-19 on Migration in India

India’s lockdown period due to the COVID-19 virus lasted over a year, beginning on March 25, 2020. As a result, migration throughout the country came to a standstill as trains and planes stopped operating leaving many Indians trapped. Many migrants lost their jobs due to the toll the virus took on major Indian industries and were far from their homes without any options to get back.

Reducing poverty in India is no small task as it possesses the second largest population in the world. Passing anti-poverty legislation that provides migrants in India more options to travel within Indian borders for work could create millions of new jobs and greatly benefit both the Indian economy and people.

– Curtis McGonigle
Photo: Flickr

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Job Guarantees and Fighting Poverty

job guarantees
As global unemployment and food insecurity (as a result of the COVID-19 pandemic) rise — there is a great need for innovative macroeconomic solutions to mitigate the adverse effects of these crises on the world’s poor. The idea of a federal job guarantees has become more popular lately. This perhaps is a response to the mass international unemployment and recession caused by the COVID-19 pandemic.

Job guarantee programs, which have been implemented across the world, involve mass public employment for all people who are seeking a job. These programs are helping to lift millions out of poverty while also offering non-monetary health benefits. Creative ideas like job guarantee programs are imperative to consider when seeking solutions for the devastating harm that the COVID-19 pandemic has caused to the world’s poor.

The Benefits of Employment

Employment offers the obvious benefit of the income and the corresponding ability to provide for oneself and one’s family, monetarily. Mass public employment can reduce the need for many social welfare programs and replace them with salaries earned from substantive, productive and helpful work. In certain scenarios, job guarantees can provide healthcare, childcare and other benefits to the world’s poor.

Job guarantees can also provide individuals with non-monetary benefits that only employment can offer. Employment and higher income have been consistently correlated with better physical and mental health. Yet another reason why this type of program can be incredibly beneficial. Employment has also been linked to lower mortality rates and a reduced risk of depression and other mental illnesses. Furthermore, working individuals feel a higher sense of self-esteem and even recover more quickly from sickness, when employed.

Where It Has Worked

Countries across the world, most famously India and Argentina, have implemented employment guarantee programs. In Argentina, the government started the “Plan Jefes y Jefas” program in response to the country’s 2001 financial collapse. This program sought to improve public infrastructure such as sanitation, roads and schools by guaranteeing employment to any heads of households for a maximum of 20 hours per week.

The program specifically targeted female heads of households, as women are often left out of the labor force in Argentina and are quick to be labeled “unemployable.” In fact, 71% of the beneficiaries of the program were women. At the time, Argentina was classified as a developing economy — proving that job guarantees can thrive outside of the developed world.

In 2005, the Indian government passed the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) — which provided guaranteed jobs to India’s poorest rural population. The program has been an unprecedented success in raising wages for rural workers, helping women enter the workforce, increasing access to healthy foods and education and decreasing the number of people who unwillingly leave their home villages to seek employment in cities.

The program reached more than 54 million households, underscoring its ease of access. The success of the Indian job guarantee program demonstrates how transformative these types of programs are in fighting extreme poverty.

The Power of a Job Guarantee

Along with the individual relief that job guarantees provide, they also offer significant macroeconomic benefits. Job guarantees empower workers and increase their bargaining power against global conglomerates. Also, job guarantees can increase consumer spending and therefore boost tax income for developing governments. In that same vein, it is these very types of governments that would benefit greatly from the increased revenue. These programs can help steady the economy during recessions while also maintaining inflation through stabilizing purchasing power.

Job guarantee programs have serious potential to effectively fight poverty while also providing benefits to the governments that administer them. These programs have the potential to provide income, power, health benefits and other opportunities to the world’s poor. Moreover, as proven tools in the fight against global poverty, their use may be paramount.

– Garrett O’Brien
Photo: Flickr