Hyderabad: The best way to grow out of nativism is to ensure economic recovery. Nativism, the cry for job protection of locals, is rearing its head again in India. The new government in Maharashtra has announced its resolve to reserve 80% of jobs for local workers.
The present Andhra Pradesh government has passed a few months ago “The Andhra Pradesh Employment of Local Candidates in the Industries/Factories Bill, 2019”. As per this law, 75% of jobs in industries are to be reserved for locals.
Industry has three years to comply and, if adequately skilled people are not available, firms will have to train local people with the required skills.
The move could hamper fresh investments in the state and deter industries in the region leading to loss of jobs and reduced economic growth. Similar to what one sees in UK due to Brexit. However, it could work initially in a developed state but in the long run, may lead to a disparity of income and opportunities amongst the poorer states, specially BIMARU states.
Considering nearly 20% India’s or 100 million workforce in the country is migrant; lack of skills among the locals will further affect profitability.
In fact, the Maharashtra government came up with 80% local jobs quota for state subsidies in 2008 but due to skill set unavailability with locals the proposal could not be successfully implemented. Similarly, Karnataka came up with the proposal for 100% local quota in 2016 but the legal department vetoed it as unconstitutional.
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Madhya Pradesh is mulling over a similar law. Goa and Odisha may be next in line. Maharashtra and Assam have seen similar nativist agitations for decades in varying intensities. And as more people from North India move to the south, as a result of a major directional shift in India’s economic migrant trail, voices of anti- north Indian migrant sentiments are also beginning to surface, albeit softly.
The latest to join this line of thinking is Karnataka government. The state is trying to scale up talent of local people to exploit jobs in IT sector. The Karnataka CM has announced this in his Independence Day address.
Political jingoism rarely rests on data, but in this case, even those who chose to look at the evidence to make claims about the changing nature of India’s migration had nothing to rely on—until late-last month. Much delayed data from the 2011 census shows that most work-related migration remained within state borders even as India’s economic growth quickened considerably in the 2000s, that interstate migration did not dramatically rise between 2001 and 2011, and that the case against nativism, adequately enshrined in India’s Constitution, is firmly backed by data.
The new insight the census offers is a decisive directional shift in India’s migration story—with the Hindi heartland exodus no longer directed at just the economic hubs along the western coast, but also along a newly emerging north-to-south corridor. More Indians are also moving across state lines in search of better educational opportunities. But despite these newly emerging trails, in a majority of India’s districts, less than one in 10 (or less than 10%) of the urban workforce is an interstate migrant. In Madhya Pradesh, where there are calls for a quota for locals, that share is 5%.
Interstate migration
The Constitution of India guarantees freedom of movement and consequently employment within India through several provisions. Article 19 ensures that citizens can “move freely throughout the territory of India". Article 16 guarantees no birthplace-based discrimination in public employment.
Article 15 guards against discrimination based on place of birth and Article 14 provides for equality before law irrespective of place of birth. Some of these Articles were invoked in a landmark 2014 case—Charu Khurana vs. Union of India—when a trade union had declined membership to a make-up artist because she had not lived in Maharashtra for at least five years, as per the union’s rules. The trade union lost the case. The recent job protection law passed by the Andhra Pradesh government can and should therefore be challenged primarily on constitutional grounds.
But constitutional provisions aside, the numbers on interstate migration should also influence the debate on job protection for locals. Census figures on absolute magnitudes of interstate migration are usually underestimated since they do not capture short-term and circular migration very well, but inferences can still be gleaned from growth rates and comparative percentages.
North-South corridor
There is also a distinct north-to-south corridor observed in the data. If Uttar Pradesh, Bihar, and West Bengal are considered as one bloc and Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Telangana are taken as another bloc, 85% of the bilateral flows between the two blocs are directed towards the south.
Since 2011, field reports suggest that this corridor has grown substantially and it should be confirmed by the next census in 2021. Between 2001 and 2011, the total number of interstate migrants who moved for economic reasons, in particular, rose marginally from 11.6 million to 13 million. Their share in the urban workforce hovered at only 8%, with substantial regional variation.
Draft National Sample Survey Office’s (NSSO) job survey for 2017-18 pegged the unemployment rate in India in 2017-18 at 6.1%, a 45-year high. The yet to be released report stated that nearly one-third of the Indian states (11) had unemployment higher than the national average in 2017-18.
The Economic Survey 2017 revealed that the annual average labour migration was close to 9 million between states during 2011-16. States like Delhi, Maharashtra, Tamil Nadu, and Gujarat attracted large numbers of migrants from the Hindi-speaking states of Uttar Pradesh, Bihar, and Madhya Pradesh. Census 2011 also reported an increase in inter-district migration (within the same state) from 30% between the 1991 and 2001 census to 58% between 2001 and 2011.
Ironically, the state of Kerala with the highest literacy rate of 93.91% as per Census 2011 recorded the maximum number of jobless people at 11.4% along with an increase in internal migration rate as per Economic Survey 2017. Possibly a reflection of an under-skilled industry-ready workforce is pushing locals to migrate to other regions within the country.
Real jobs are not created by law but by industries coming in the region. In the long run subsidies and reservations may not be the solution for sustainable growth. What is required is an enabling environment that has simple investor-friendly policies, skill development and ease of doing business in the state.
One has to recognize that there is difference in passing a law and its implementation. Even in the case of Andhra Pradesh, there is a gap where the new law exempts industries like fertilisers, coal, pharmaceuticals, petroleum and cement for now; and it is likely that the stipulation does not extend to IT industry.
In city-like states and Union territories such as Delhi, Chandigarh or Daman, the figure of migrant workers to total workers was over 40% (of active workforce). In Mumbai, the figure stood at 24%, while for Bengaluru, Chennai, and Hyderabad, the figure was below 15%. In over 410 out of 640 districts, especially districts in South India, the figure was well below 5%. In Tamil Nadu, the migrant workforce drawn to its manufacturing hubs such as Tiruppur mostly came from other districts within Tamil Nadu.
As per the census, work-related interstate migration to urban areas comprises, on average, less than 10% of the urban workforce. Even if these figures are doubled to account for underestimation, they would form only about 20% of the urban workforce, a far cry from concerns on interstate migrants swamping the labour market.
Instead of nativism, states need to create a framework where safe interstate migration for work is facilitated and fiscal coordination is pursued to enable the portability of social security benefits.If this is done, interstate migration would rise and provide more opportunities to remedy regional disparities.Matching skills seamlessly across geographies within India would also facilitate the ease of doing business, a much-valued goal continually emphasized by the current central government.
Curious case of AP
While interstate migration for work has constitutional safeguards and is not a large phenomenon, it is puzzling that states such as Andhra Pradesh of net out-migration, should consider legislating job protection for locals.
If Telangana were to reciprocate with a similar legislation, it would be Andhra Pradesh that would suffer more (because of reduced access to the economic boomtown of Hyderabad). Census figures clearly show that economic migrants in the urban areas of districts that comprise the newly carved Andhra Pradesh mostly came from within those same districts (originating from a nearby town or village) and a miniscule proportion of the urban workforce came from outside.
In such a scenario, nativist legislation is unlikely to be a binding constraint but it begs the question of its necessity in the first place. Andhra Pradesh has set a dangerous precedent, which, if pursued by other states, will lead to a collective race to the bottom.
Thus, calls for nativism and their critiques are not new in India and they tend to occur during periods of economic sluggishness. The calls for nativism should also be seen against the backdrop of the economic slowdown. The best way to grow out of nativism is to ensure that the economy is back on track at the earliest.
The Economic Survey of 2017 had sought to enthusiastically argue that inter-state migration rates in India are fast increasing. Even so, (ayinappatiki,) India is far from being an integrated labour market, and politicians like the CMs of MP, Gujarat, and the Shiva Sena leaders 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.
Construction in the National Capital Region attracts migrant labour, including from MP, because locals don’t want these jobs. Farm labour in Punjab and Haryana attract migrant labour. Domestic services in all major urban centres will get terribly affected without migrant labour.
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 labour market can efficiently match workers to jobs.
Paritala Purushotham
