Insights into Editorial: The importance of emigrants

Introduction:

According to the Ministry of External Affairs, there are over 13.4 million Non-Resident Indians worldwide.

Of them, 64% live in the Gulf Cooperation Council (GCC) countries, the highest being in the United Arab Emirates, followed by Saudi Arabia and Kuwait.

Almost 90% of the Indian migrants who live in GCC countries are low- and semi-skilled workers, as per International Labor Organization estimates.

Other significant countries of destination for overseas Indians are the U.S., the U.K., Australia, and Canada.

High remittances for India compare to any other country:

1. Every year, about 2.5 million workers from India move to different parts of the world on employment visas.
2. Besides being involved in nation-building of their destination countries, Indian migrant workers also contribute to the homeland’s socioeconomic development, through remittances.
3. According to a report by the National Statistical Office, urban and rural households receiving remittances (both international and domestic) have approximately 23% and 8% better financial capacity, respectively, than non-remittance-receiving households.
4. As per a World Bank Group report (2021), annual remittances transferred to India are estimated to be $87 billion, which is the highest in the world, followed by China ($53 billion), Mexico ($53 billion), the Philippines ($36 billion) and Egypt ($33 billion).
5. In 2021, remittances transferred to India had seen an increase of 4.6% compared to 2020.
6. Remittances in India have been substantially higher than even Foreign Direct Investment (FDI) and the flow of remittances is much less fluctuating than that of FDI.
7. Still, remittances’ contribution of 3% in GDP is lower than that of countries such as Nepal (24.8%), Pakistan (12.6%), Sri Lanka (8.3%) and Bangladesh (6.5%), as per a World Bank report.
8. Besides being a win-win situation for both the destination and source country, labour migration is good hedging strategy against unsystematic risks for any economy.
9. Human capital should also be invested in a diversified portfolio akin to financial capital.
10. For many countries, remittances have been of vital support to the domestic economy after a shock.
    1. For example, after the 2015 earthquake in Nepal, overseas Nepalese increased remittances to an estimated 30% of GDP.

Can India increase remittances to say 10% of GDP? Can the Philippines’ model of promoting labour mobility be replicated in India?

1. Both the cost of recruitment of such workers and the cost of sending remittances back to India should come down.
2. The safety and well-being of migrant labour is of top priority for the government.
3. Reducing informal/undocumented migration and formalizing all remittances is being given due focus.
4. Recruitment agencies should also be regulated leveraging information technology for ensuring protection of migrant workers leaving India.
5. An integrated grievance redressal portal, ‘Madad’, was launched by the government in 2015.
6. Of the approximately 78,000 grievances registered so far by the Indian migrants, more than 95% have been resolved.

The Emigration Bill 2021:

1. The Bill envisages comprehensive emigration management, institutes regulatory mechanisms governing overseas employment of Indian nationals and establishes a framework for protection and promotion of welfare of emigrants.
2. The bill proposes a three-tier institutional framework:
3. It launches a new emigration policy division in (MEA) which will be referred to as the Central Emigration Management Authority.
4. It proposes a Bureau of Emigration Policy and Planning, and a Bureau of Emigration Administration shall handle day-to-day operational matters and oversee the welfare of emigrants.
5. It proposes nodal agencies under a Chief Emigration Officer to ensure the welfare and protection of the emigrants.
6. It permits government authorities to punish workers by cancelling or suspending their passports and imposing fines up to Rs 50,000 for violating any of the Bill’s provisions.
7. Labor migration is governed by the Emigration Act, 1983 which sets up a mechanism for hiring through government-certified recruiting agents – individuals or public or private agencies.
8. It outlines obligations for agents to conduct due diligence of prospective employers, sets up a cap on service fees, and establishes a government review of worker travel and employment documents (known as emigration clearances).

Provisions of the Emigration Bill:

1. The Indian government proposed a new Emigration Bill in 2021 which aims to integrate emigration management and streamline the welfare of emigrant workers.
2. It proposes to modify the system of Emigration Check Required (ECR) category of workers applying for migration to 18 notified countries.
3. The ECR category mainly comprises those who have not passed Class 10 and face the challenge of risky informal emigration and subsequent hardships abroad.
4. The Bill makes it mandatory for all category of workers to register before departure to any country in the world to ensure better protection for them, support and safeguard in case of vulnerabilities.
5. The proposed Emigration Management Authority will be the overarching authority to provide policy guidance.
6. The number of migrant workers need not go up for remittances to increase if the skill sets of workers are improved.
7. Provisions of the Bill such as registration of all emigrants, skill upgradation and training, and pre-departure orientation will enhance protection measures.
8. Besides workers, as about 0.5 million students also migrate for education from India every year, the Bill also covers such students.
9. This will provide a comprehensive data set for the efficient management of Indian migrants.
10. Skilling of migrant workers has the potential to boost the domestic economy and low-cost interventions such as foreign language training can be of great help for such workers.

Conclusion:

Though the phenomenon of Indian-origin executives becoming CEOs of top U.S. companies highlights the contribution of Indian talent to the U.S. economy, the role played by Indian semi-skilled migrant labour in the global economy is no less illustrious.

India needs to formulate migration centric policies, strategies, and institutional mechanisms in order to ensure inclusive growth and development and reduce distress induced migration.

This will increase India’s prospects for poverty reduction and achieving Sustainable Development Goals.