Economy

Drop in emigration may impact domestic job market, remittance

K Ram Kumar Mumbai | Updated on November 01, 2020

 

There was a drastic 67 per cent fall in emigration clearances (EC) from India for overseas employment in the January to September 2020 period. This drop came amid steep plunge in global economic activity due to the deleterious impact of the raging Covid-19 pandemic.

Further, with the most number of Indians returning by Vande Bharat Mission flights, which started from May 7, being from the Gulf and the US, it is likely some of them returned home on account of job loss due to slump in these countries triggered by the pandemic. These developments could have serious implications for the domestic job market and remittances.

 

As per the Ministry of External Affairs data, cited in the Reserve Bank of India’s report on “State Finances: A Study of Budgets of 2020-21”, ECs obtained by Recruiting Agents, Project Exporters and under Direct Recruitment by Foreign Employers declined steeply to 84,585 in the first nine months of 2020 against 2.59 lakh in the year ago period.

The report observed that some of the low-investment States like Uttar Pradesh, Bihar, West Bengal and Rajasthan had seen a large chunk of migration for overseas employment in recent years.

Reverse migration

While reverse migration started in March, the government repatriated more than 18 lakh stranded Indians (both workers and tourists) safely to India under VBM from 137 countries, according to the report.

 

Kerala received the largest number of stranded Indians, followed by Delhi, Uttar Pradesh, Tamil Nadu, Maharashtra, West Bengal, Telangana, Karnataka, Bihar and Andhra Pradesh. The largest number of Indians returning by VBM flights were from UAE, followed by Saudi Arabia, Qatar, Kuwait, Oman (all Gulf countries), and USA.

Remittances down

As a consequence, net workers remittances fell by about 13 per cent in the April-June (first quarter or Q1) of FY2021 to $11.688 billion from $13.425 billion in the year ago period.

“Another dimension of the health crisis is that lockdowns driven by fast spreading contagion posed a formidable challenge for spatial mobility of workers – inter- and intra-state, and abroad – with implications for regions dependent on migrant workers for labour or remittances,” the central bank said in the report.

Minister of State for External Affairs V Muraleedharan told the Lok Sabha on September 16, 2020, that since VBM commenced on May 7, 2020, more than 13.74 lakh Indians (as on September 10) have returned to India.

“Of them, 3.08 lakh were workers, not all of them had lost their jobs, but returned on account of Covid-19 situation... In recent months, Indians have started to return to the Gulf and other countries to rejoin their jobs or for family reunions,” the Minister said.

Published on November 01, 2020

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