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Locking down the country in March, Indian Prime Minister Narendra Modi unwittingly triggered acute unemployment and mass migration. "We will die poor," said one migrant who struggled to return home.   © Reuters
The Big Story

India's migrant exodus foreshadows an economic crisis

Modi's lockdown hit the poorest hard. His recovery plan may leave millions more behind

MEGHA BAHREE, Contributing writer | India

NEW DELHI -- Chiles and dried mango powder have helped Govind Jogi swallow handfuls of plain boiled rice -- the only food on which he and his wife have survived these past two months.

Jogi, 21, usually works as a seller of idlis, a savory rice cake, at a roadside stand in Ahmedabad, a city in Indian Prime Minister Narendra Modi's home state of Gujarat. Along with millions of other migrant workers, his income vanished overnight when Modi on March 25 imposed a nationwide lockdown in an attempt to rein in the spread of the novel coronavirus.

With no money and no way to make it back to his village of Simalwara, about 160 km away in the next state of Rajasthan, Jogi and his wife have lived on next to nothing: rice bought with a $20 advance from his employer, a one-off donation from a nonprofit organization and the occasional generosity of neighbors. The state promised to supply poor workers with food during the lockdown, but Jogi was not able to access the rations.

"We eat little," he said. "We don't want to ask the neighbors for food."

Migrant workers and other marginalized groups have borne the brunt of India's lockdown, which has destroyed their already fragile livelihoods. Millions of daily wage laborers have been stranded in the cities they moved to for work. Many others, with no food or help in sight, have chosen to make their way back to their families in their native villages -- a mass exodus by road, rail and foot. Thousands of people walked for days in India's searing temperatures, relying on the charity of strangers for food. Some died of exhaustion and hunger; others in train and traffic accidents.

Crowds wait to cross the border into the state of Uttar Pradesh: India's lockdown has revealed the country's dependence on migrant labor.   © Reuters

The crisis caused by the lockdown, and the lack of preparation, are a stark reminder that the poorest in India are often missing from the national debate. It has also revealed just how dependent India has become on an underappreciated and underserved population.

"The government ... failed to imagine that there would be a point that migrants will start walking home," said Rahul Verma, a fellow at the Center for Policy Research, a New Delhi think tank.

The lockdown, and a global downturn caused by the coronavirus pandemic, are likely to erode the economic gains of the past three decades of which India has been proud. Opening the economy and embracing global markets has helped to pull millions of people out of poverty. But over the same period, inequality has widened "beyond imagination," said Gautam Mody, general secretary of the New Trade Union Initiative, a coalition of independent trade unions.

"The so-called economic boom has not created, and cannot create, that many rich people who can either pull the economy up, or even create the economic activity you need to pull so many people out of poverty. After all, how many Antilias can you build, or how many Rolls-Royces can you buy?" Mody said, referring to the 27-story, billion-dollar Mumbai home of Asia's richest man, Mukesh Ambani.

'Save Hindustan'

At 8 p.m. on March 24, Prime Minister Modi, in a nationally televised address, announced that the country would go into a complete lockdown at midnight, "to save Hindustan, to save every citizen of Hindustan, to save you, to save your entire family." He warned that the lockdown would be like a "curfew ... a critical step now needed in the fight against the coronavirus."

In the hours before the lockdown kicked in, residents ran out to stock up on vegetables, pulses, milk, medicines -- whatever they could get their hands on at the few stores that were open at that hour.

Ravindra Kumar, a 19-year-old textile worker in Ahmedabad, resolved to head back to his hometown in the state of Bihar around 1,650 km away. Hearing that the government was operating dedicated trains to take migrants home, he walked 17 km in 42 C heat and waited in line for a ticket. It took three attempts, but at last he handed over 750 rupees ($10) to secure a spot.

At 8 p.m. on March 24, Prime Minister Narendra Modi went on live TV to announce what would become one of the world's harshest lockdowns, giving the world's second-most populous nation just four hours to prepare.   © Reuters

Kumar never got his ticket. Others who applied later paid more for their berths, and he suspects that corrupt officials were selling the tickets on at a premium. It took several more days of filling out forms, and the assistance of a local councilor, before finally -- after queuing another 12 hours -- he boarded a train.

But his relief at heading home was short-lived. On arrival in Bihar he was shipped off to a quarantine center. Only half the new arrivals had managed to bathe before one of them spotted a snake on the premises, causing them to all run out onto the highway. Hours later, they managed to call their village head, who let them spend the night at a school on the outskirts, 12 km away.

At Kumar's next quarantine facility, a schoolroom that he shared with 10 others, he was issued a standard kit handed out to all new arrivals. It had a mosquito net, a bucket and a mug, and a piece of soap the size of a slim pack of matches. There was no hand sanitizer, mask or food. Some of the other occupants' families lived close enough to be able to bring food every day, but that was not an option for him.

"We struggled three days to fill [out] forms, we spent another three days trying to get our tickets and another three days just to get here," said an angry Kumar. "We will die poor."

After much protest, government officials finally agreed to provide food. Kumar is still not satisfied. "All we want is what the government has said, in all its many public announcements, that it is giving to people at containment centers," he said. "Nothing more. But we're not even getting that."

These stories have become familiar as India's national and state governments struggle with the sheer scale of the migration and unemployment that has resulted from the epidemic and the measures they took to control it. Around 70 million to 80 million people are estimated to have moved cross-country. The unemployment rate has shot up from an already decades-high 7.8% in February to 21.7% on June 6, according to the Center for Monitoring Indian Economy.

The economy was stuttering ahead of the pandemic and was forecast to grow at its slowest pace in more than five years before the lockdown brought almost all business activity to a screeching halt. The lockdown has already lasted more than two months, and there is still no clarity on when activity will resume at full scale. Predictions on the country's economic growth are dire.

According to rating agency Crisil, a unit of S&P Global, India's economy will "fall off a cliff," contracting 5% in the current financial year ending March -- the fourth recession since India's independence in 1947. In a May 26 report, Crisil said first-quarter growth will contract by a staggering 25%. Around 10% of gross domestic product in real terms could be permanently lost. Crisil rules out any chance of India's economy hitting growth rates of the pre-pandemic era for at least three years.

"The hit has been very sharp," Dharmakirti Joshi, Crisil's chief economist, told the Nikkei Asian Review. For the economy to regain its earlier trend growth path, it will have to speed up at an unprecedentedly high rate -- an unrealistic expectation, he added.

One critic says the government's $22.6 billion stimulus package, aimed at sending food rations to around 800 million people and cash transfers to some, has been "very poorly targeted."   © Reuters

New Delhi has attempted to patch up the battered economy with a $265 billion stimulus package. However, economists said it contains little in terms of measures that will help to boost demand. Although the government said the package amounts to 10% of India's GDP, analysts pointed out that the actual money spent is expected to be just 1% of total output.

Among the measures included in the package are the suspension of insolvency proceedings for a year to protect businesses hit by the pandemic and increasing the borrowing level of states -- conditional on them implementing economic reforms. The largest part of the allocation is toward an offer of government-guaranteed, collateral-free loans for small and medium-sized enterprises. However, economists warn that since this measure is indirect, its effectiveness will depend on how banks implement it.

The government has also used this moment to push forward its economic reforms, including opening up predominantly government-run industries like mining and defense to the private sector.

These structural changes may pay off in the medium term, Crisil's Joshi said, but the government does not have the firepower to stop the short-term pain. "India is not in the same boat as advanced countries and doesn't have the fiscal space to spend its way out of the hardship," he said. "No matter how much you give, nothing can offset this damage. You can only minimize it, at most."

The government has allocated about $22.6 billion to provide food rations to around 800 million people over three months of the lockdown, as well as direct cash transfers and free cooking-gas cylinders to some.

But most of the measures have been "very poorly targeted and have had a very low absorption," said Ravi Srivastava, director of the Centre for Employment Studies at the Institute for Human Development. "We continue to be the only major country in the world where there's no conversation on inequality."

Srivastava also said that the stimulus packages failed to address falling demand, unlike measures in other countries which have offered direct support to consumers. "India has to recognize that it has to prop up demand, otherwise coming out of the recession will be much harder and longer," he said. "Instead, our finance minister has said we have our own way of doing things. And we, as economists, are still trying to understand what that is."

In some places, workers' rights are under threat. At least 12 state governments, 10 of them ruled by Modi's Bharatiya Janata Party, have loosened labor laws in an effort to encourage companies to start work and help kick-start the economy. Labor experts warn that these are regressive and likely to harm poorer workers.

In most of those states, working hours have been extended. In Goa, factories -- except those using hazardous materials or processes -- will only need to be inspected once every five years, as long as they self-certify. In three states, minimum requirements on working conditions, including bathroom and canteen facilities and workplace hygiene, are being relaxed.

The northern state of Uttar Pradesh, India's most populous and among its poorest, has removed from its statutes the right to form unions, denying workers the right to raise industrial disputes or access labor courts and tribunals. In May, it banned essential government employees from striking for the next six months.

"A whole range of labor rights have been left to the discretion of the employer," said K.R. Shyam Sundar, who teaches human resource management at XLRI-Xavier School of Management. "In these extraordinary times ... both industry and workers have undergone considerable suffering and deprivations."

Rather than taking measures that are likely to make formal employment more fragile and informal, the government should be trying to make work more secure, Sundar said. "If the government wants to reduce the misery of workers, it should widen the ambit of welfare laws which concern unorganized workers."

India is a founding member of the International Labor Organization. At least 10 Indian trade unions have written to the ILO appealing for it to ask New Delhi to uphold the country's commitments. In a statement on May 13, the ILO said that "such amendments should emanate from tripartite consultation involving the government, the workers' and the employers' organizations and be compliant with the international labor standards."

"This is what's on offer for the most part: no minimum wages, no rights to fair treatment or raise a dispute, no obligation to health and safety, no statutory provisions for toilets or water," Mody said. "It says very clearly that the private sector and the rich will drive the economy and they should be allowed to do so, and do so without hindrance. ... These laws, apart from being extremely regressive, will actually create anarchy."

A migrant cries as her group is prevented from crossing the New Delhi border during lockdown in mid-May.   © Reuters

Growing poverty and hunger, reflected in public anger against the state, could make this a dangerous moment for Modi's government. The BJP has presided over a rise in civil violence, including widespread protests in December following the imposition of a new citizenship law that many see as discriminatory against Muslims.

The BJP's overtly Hindu nationalist agenda has increased the sense of alienation among India's Muslim population. The coronavirus epidemic has only heightened tensions.

In late March, a cluster of COVID-19 cases emerged at a gathering of the Tablighi Jamaat, an orthodox Islamic missionary movement. Hundreds of people were infected across India and in Southeast Asia. Soon after that became public, false videos of Muslims spitting on food or people to spread the disease went viral on social media platforms, and at least one BJP legislator called for residents to boycott Muslim vegetable vendors to avoid getting infected.

Analysts have warned that as the lockdown lifts, anti-government protests are likely to resume. Verisk Maplecroft, a U.K.-based political risk analysis company, warns that the economic suffering of many Indians may well worsen.

"A combination of lockdown-induced disruption and state inefficiency has already led to increased food insecurity, which is only set to deepen over the coming months as the economy sheds jobs at a rapid rate," the company said.

Several cities, including Surat in Gujarat and Mumbai, have already experienced a spate of riots, as daily wage laborers took to the streets to demand that the government help them return home.

"This COVID crisis has put people in a more uncertain zone -- more hardships, more poverty," said the Center for Policy Research's Verma. "It is a moment of reckoning for the government. But from the top we're getting only a message of assurance, but not being told about any policies, no information to put confidence in people that things will be taken care of and will improve."

'It's all lies'

With no clear end to the lockdown in sight, and with government assistance inconsistent or inaccessible, many of India's poor have had to rely on the kindness of strangers or on civil society organizations.

In the industrial city of Surat, mechanic Amar Kumar Nahak has been trying to get home to the southeastern state of Odisha. Like Govind Jogi in Ahmedabad, Nahak was denied free rations. He told Nikkei that he stood in line for food aid, but was turned away by officials who said that he did not have sufficient identification. He had taken an advance of nearly 40,000 rupees from his employer to pay for his sister's wedding and got back to Surat in mid-March, days before the lockdown started. Now, with no work, no income and his savings all but gone, he is relying on charity.

A one-off donation from a nongovernment organization means he has some rice, lentils and cooking oil. His neighbors often give him a glass of milk, which he mixes with water so there is enough for his two daughters and his son.

The 35-year-old said that if he could get home, he and his three children could at least share his parents' rations. But with each train ticket costing at least 800 rupees, it is a wish far beyond his means.

A migrant worker holds a token as he waits for a bus bound for a railway station, attempting to return to his home state of eastern Bihar.   © Reuters

In late May, Nahak struck some luck -- or so he thought. One of his clients donated tickets for him and his family. He gave away the food he had received from the nongovernment organization, and together they embarked on the three-day train journey to their home in the Ganjam district of Odisha State, about 1,700 km away.

When they reached the quarantine center, they found worms in their food and water. First Nahak's wife fell sick; he later followed. They had to beg the authorities for tablets to decontaminate the water. It was only after they took videos of the contaminated food and water and threatened to contact the media that they received the tablets, Nahak said.

"We made a mistake coming here," he said. "Both sides turned out to be a problem. ... But we got so stressed in the lockdown that I thought it would be better to go home. We saw videos on YouTube and WhatsApp of people in quarantine eating good food, staying comfortably -- it's all lies, all rubbish. I feel like we're in jail."

Nahak does not know when or how to return to Surat with his family, and if a better life awaits them there or not.

Kumar, who escaped the snake in the quarantine center in Bihar, is more sanguine about his future. His employer in the textile factory in the same city as Nahak has been calling him to come back to work; he has decided to take his time.

Taking a break from playing cricket on a recent June day, he told Nikkei he will only work somewhere that offers him a good salary. "For two months, our boss didn't once call and ask us if we were OK, if we had food to eat, how we were living -- so why should I rush back now? I'll go back in a couple of months, once the disease dies down, and then I will switch to wherever I get a better salary."

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