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Why in news?

One of the moving images from today’s India is of migrant workers suddenly feeling desolate in their places of work and desperate to return to their villages, in the aftermath of the COVID-19 outbreak.

We need to plan for an economic growth driven by rising.

Patchy data

  • As per 2018 data: Out of India’s total workforce of 471.5 million, only 12.3% are regular workers receiving some form of social security, while the rest are mostly casual workers or petty producers surviving under various degrees of informality.
  • A vast majority of migrant workers belong to the category of informal casual workers.
  • Available data on the size of the migrant workforce in India are rather patchy.
  • According to the 2011 Census, there were 54.3 million persons (workers as well as non-workers) in the country who migrated from one State to the other.
    Workers migrate from villages to urban centres as the growth of rural incomes has not kept pace with the rising numbers and aspirations of the young in the countryside.
  • Between 2005 and 2018, 19.3 million persons left agricultural work in these four States alone and sought job opportunities elsewhere.

Livelihood dependency of Workers

  • A majority of the workers who leave villages find themselves in the bottom rung of the urban economy, earning a precarious living as drivers, factory workers, security guards and domestic helpers.
  • Their livelihoods are directly or indirectly linked to economic activities that cater to the demand from the relatively affluent people.

Need to widen the demand base

  • According to the official consumption-expenditure surveys (for 2011-12), the richest 5% accounted for as much as 64.4% of the value of overall consumption of durable goods (such as of furniture or refrigerators) in urban India.
  • The share of consumption of such goods by the poorest 50% was only 13.4%.

How to overcome reduced demand / consumption?

  • The COVID-19 pandemic is set to cause long-term disruptions to the existing structure of demand dominated by the consumption of a privileged few.
  • The crisis in the economy can be overcome only by widening the sources of demand, by raising the consumption of and investment for the poor.
  • Firms should assist in raising workers’ wages and incomes, and thereby, in enlarging the size of the markets.
  • It is critical that governments increase spending on the economy, in areas such as infrastructure and innovation.
  • The ideas of John Maynard Keynes during the great depression of the 1930s that Government spending can boost the spirits of private investors had helped to fuel an unprecedented economic boom in the U.S. and European countries.
  • A striking feature of this ‘golden age of capitalism’ was that the real wages kept rising, providing the much-needed succour to the working classes.
  • A massive expansion in government spending will uplift workers’ skills as well as their incomes and purchasing power.


A grave challenge to future growth is the ageing demographic structures in most parts of the globe.

Lifting the wages and the spirits of the wearied Indian worker could just be the dose required to bring cheer to the Indian and the global economies.

-Source: The Hindu

December 2023