A model problem

Mains Paper 4: Society
Prelims level: Not Much
Mains level: Migration labour force

Context

•  The Gulf had, for long, funded the Kerala development story by absorbing its labour and providing remittances.
•  But the recent changes in migration trends pose challenges for the state of Kerala in terms of the economy, labour and welfare.
• Reason behind migration
•  Nearly a quarter of the households in Kerala have a migrant, and 90% of migrants from the state are in Gulf countries.
•  Kerala’s outward migration has co-existed with inward migration of labour from northern and eastern India.
•  Nearly 2.5 million migrants, mainly from WB, Odisha, UP, Bihar, are a part of the workforce in Kerala, in relatively low-paying jobs.

What are the recent changes?

•  The overall migration from the state has been showing a negative trend in the last 5 years.
•  Over the past decade, the number of people migrating to the Gulf has fallen.
•  It stands at 1.89 million in 2018, down from 1.94 million in 2008.
•  On the other hand, the number of reverse migrants has gone up in the same period.
•  The factors forcing reverse migration of Keralites from the Gulf region include -
•  economic slowdown in the Gulf countries
•  state policies favouring replacement of migrants with local labour
•  influx of workers from Africa and countries such as the Philippines
•  The prolonged slowdown since 2008 and visions of a post-oil economy influenced some of the labour polices.
•  E.g. Nitaqat in Saudi Arabia encouraged employment of local labour over migrants
•  Also, over the period, the high remittances facilitated Kerala's welfare society and significantly, the wages remained higher.
•  But now, cheaper labour is available from other countries in the Gulf and from other states of India in Kerala.
•  With this, Kerala labour has become non-competitive in both the Gulf countries and within Kerala.
•  Moreover, demographic changes, especially population reduction in the migration prone age-group, also affect the migration scenario.

Possible implications

•  The change of migration trend has serious repercussions for Kerala’s economy and society.
•  Any large-scale change in the numbers are sure to influence spending patterns at home, and thereby, Kerala’s service economy.
•  Fortunately, the rising dollar-rupee exchange rate has prevented a fall in foreign remittances to Kerala.
•  However, the return of a large number of migrants, many of them blue collar workers, could affect employment in Kerala.
•  The trend may also impact the consumption and retail trade in the state.
•  Moreover, the low-skilled among them have to now compete with the non-Malayali internal migrants.

Way forward

•  The state government realises the implications of this trend and has been introducing policies to balance the reverse migration's impact.
•  The recent state budget has proposed new pension, savings and loan schemes for expatriates.
•  Loans, technical advice to start businesses, have been offered to integrate the returning migrants in the local economy.
•  However, it is too early to say if these steps are sufficient to address the looming crisis.

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Prelims Questions:

Q.1) Consider the following statements regarding Core Investment Companies (CIC):
1. They belong to the category of NonBanking Financial Company.
2. They are all mandatorily required to be registered with the Reserve Bank of India.
3. Only a Systemically Important CIC can accept public funds.

Which of the statement given above is/are correct?
(a) 1 only
(b) 1 and 2 only
(c) 3 only
(d) 1, 2 and 3

Answer: A

Mains Questions:
Q.1) Why the changing migration trends in Kerala?