Labour mobility

Source: This post on Labour mobility has been created based on the article “Labour mobility” published in “Business Standard” on 27^th December 2023.

UPSC Syllabus Topic: GS Paper 3 Indian Economy – Issues relating to employment.

News: The article discusses the recent overseas demand of Indian labour due to shortage in developed countries. It highlights its positives, as well as argues that it is not an alternative to job creation domestically.

Read more on this here.

How can India gain from sending labour overseas?

Opportunities: India is a labour-surplus country and has been exporting workers around the world through both formal and informal channels over the years.

Experience: Although there could be concern that labour migrating abroad could create shortages in India, most of the labour demand for now seems temporary in nature, which means people will come back with international experience.

Incomes: Since wages in developed countries are much higher, they are also likely to return with savings, which can be used to build real assets in India. Given the vast pool of surplus labour, it is unlikely to create shortages in India.

Why is sending Indian labour overseas not enough?

It is important to recognise that this will not solve the unemployment or under-employment problem India is facing and should not be seen as an answer to the Indian economy’s inability to create enough well-paid jobs.

According to the latest Periodic Labour Force Survey, over 57% of the workforce was self-employed. This is not an indication of entrepreneurship, but people engaged in some economic activity to sustain themselves because not doing anything is not an option.

Over 18% of the labour force was engaged as helpers in household enterprises, while more than 21% identified themselves as casual workers.

Thus, India needs to create gainful employment for its rising workforce.

What should be done?

Since the government is actively pursuing this route, there are at least two important things that must be kept in mind.

First, the kind of workforce being discussed here is not particularly highly educated and savvy. It is, therefore, important that people are shortlisted transparently with trusted third-party involvement, if necessary.

Second, as the number of Indian workers goes up in various countries over time, India should consider increasing its diplomatic presence to ensure difficulties faced by Indians are swiftly addressed.

Question for practice:

Sending Indian labour overseas has its positives, but it should not replace meaningful job creation at home. Discuss.