Why and how of direct cash transfers to migrant labor

By Dr. Nisha Sahai Achuthan

The media in India over the past few months has debated at length the success of the Central Government packages in mitigating the financial hardships of the migrant labour. Some of the needs of the poor had been addressed by the Government and relief announced by the Finance Minister in discrete tranches, starting mid-May, and on June 18, announcing the GKRA (Garib Kalyan Rojgar Abhiyaan). But cash-relief to the migrant labour—largely undocumented– has not been provided for to date. Undoubtedly, the GKRA, aimed at “providing employment to the returnee migrant to his village across 116 districts in six states”, is a welcome step. But it should not preclude the urgent need for the Government to simultaneously provide immediate, one-time cash relief to the already cash-starved returnees, and to other migrants because the implementation of this scheme, which envisages coordination “between 12 different ministries and departments,” cannot happen with a drop of the hat. Secondly, what happens to the financial plight of migrants who have “sheltered in place” in key metropolitan cities as per government pleas and have not returned to their villages?

The spotlight on the financial plight of all migrants following the lockdown, had generated a media advocacy, underscoring the need for urgent Direct Cash Transfers (DCTs) to them. While offering a comprehensive roadmap for the Indian  Government and depoliticizing this discussion, I have omitted the views of the opposition and ruling parties and instead focused on the views of five internationally known economists — Nobel laureates Amartya Sen and Abhijit Banerjee; Raghuram Rajan, former RBI Governor; Jayati Ghosh, Chair, and Prabhat Patnaik, former professor, at the CESP (Centre for Economic Studies and Planning), JNU and of Harsh Mander, ex-IAS now a well-known activist.

The articles by these economists both before and after the finance minister’s announcements in mid-May indicate that there was a near-convergence on the urgent need for the Government to allocate funds specifically for immediate Cash transfers to the migrant labour. However, on the way to go about it, while some of them left it to the state governments and local bodies, others suggested a coordinated effort of the Centre, states and civil society. Carrying these ideas forward, I have attempted below a step-level road map for the stakeholders to follow.

A road map on a possible way to enable DCTs, through the collective engagement of the Central and state governments, NGOs and individuals, without impacting the Government Exchequer

Pan-India Data on the number of migrant labor

The current numbers given out by scholars on migrant labour vary, based on their extrapolations from the Census of 2011, which being the only reliable source, albeit dated, is what the SWAN (Stranded Workers Action Network) report uses to derive its figure of 400 million. Now assuming that through Central and State Governments along with NGO efforts it would be possible to compile the bank account numbers and IFSC codes of a majority of the migrant labour—as I have shown in my replicable case study quoted  below — we are still talking of setting aside funds via DCT for about 400 million migrants.

Do note that neither the Central nor the state governments have a current figure on the number of migrants as was evident from the May 14 press Conference of Finance Minister Nirmala Sitharaman, in which she said that the figure of  80 million was approximate, based on a estimates provided by the states, which were updating figures. However, this is far removed from the 400 million figure of 2011 census.

As regards the quantum of the DCT to be made, here too figures vary. The amounts suggested by the leading economists ranged from 7,000 per month for a period of three months (Patnaik) to Rs 7,000-10,000 per month for the  coming months (Ghosh), while others preferred not to put a number on the quantum. I have taken the more conservative, minimum figure of a one-time DCT of Rs 5000 to match that announced by the Delhi Chief Minister for registered construction workers–as a reference point.

The arithmetic of funds needed to be allocated by the Government for DCT

Central Government: On the source of funding, the FM stated on May 14: “The PM-CARES (Citizen Assistance and Relief in Emergency Situations) ACT created on 28 March 2020 had allocated Rs 1000 crore for migrant workers”. However, this amount provided to State Governments and placed at the disposal of District Collectors or Municipal Commissioners was not for DCTs but for providing food, shelter, medical treatment and transport, much of which would have been expended by now. But what is missing in the website of the PM CARES Act is the inflow-outflow balance sheet, which too needs to be constantly updated in the interest of transparency, given that this is a public fund based on voluntary contributions. All it states is the outflow amounts — all allocated under COVID-19, totaling to Rs. 3,100 crore.

Hence, media has been doing its own “guesstimates” on the inflow to PM’s fund inter alia from the private sector.  As per MOUSHUMI DAS GUPTA – Print 4 April– “donations have crossed over Rs 6,500 crore… including Rs 1,500 crore by the Tata Group, Rs 1,000 crore by the Azim Premji Foundation,” also reported in thelogicalindian.com › News of of May 14, which adds: “According to an analysis by IndiaSpend, at least Rs 9,677.9 crore has been donated to the (PM CARES) … also open to foreign funding and Rs 22 crore has been pledged by two foreign companies, Fairfax Financial Holdings and Russia’s state-owned defence exports company, Rosoboronexport.” The former is also reported in www.globenewswire.com › TORONTO April20: “Fairfax to Donate US$1 Million to ‘PM CARES Fund.”

So from this abundant kitty, the Central Government could make another announcement allocating fresh funds for migrant workers, but this time dedicated to DCTs, to their bank accounts culled from the existing data-base of the Central and State Governments—a methodology I have laid out in the next section. The first tranche could be worked around FM’s figure of 80 million migrants for an initial transfer — of a minimum  Rs 5000 per worker, amounting to Rs 4000 Crores, four times the number of the initial allocation.

State governments: While awaiting an allocation from the Central government, the State Governments need to continue devising their own methods for cash-payments as Kerala and a few other states have done, and even if it leads to a duplicate payment down the line, nothing is too large at this hour for the cash-starved migrant.

Creation of a data-base by a designated nodal agency-cum-clearing house in the Central government of names and bank accounts of migrant labor for DCT, derived from existing databases of banks, states and NGOs

Central Government: The Pradhan Mantri Jan Dhan Yojana [PMJDY], launched in August 2014 (https://pmjdy.gov.in) allows an applicant to open a bank account with zero deposit, giving details such as PAN, Aadhar and, personal details such as village and current address, and more importantly annual income, occupation/profession. This is a wealth of ready data with banks, which would enable the Government to determine as to who all fall under the rubric of “migrant labor.” So, the Government should task all the banks to feed  in the above information online to one nodal agency, acting as a clearing house, which role could be assigned to the PMJDY office itself, within the Ministry of Finance.

State Governments: PMJDY website also has percent coverage, state and district-wise of the “House Hold Report, SSAs Survey”. Here again, if the PMJDY office gets details from the agencies which conducted these surveys, this would be another database to mind  relevant information.

NGOs: At the micro-level, my suggestions for the role of NGOs for this specific purpose of compiling data—in particular, cell number, bank account details etc to enable DCT, are based on my replicable case study on the Socio-Economic Profile—predicated on a detailed 35-point Questionnaire–of approximately 633 migrant labour housed in 3 pre-selected Govt.-shelters in Delhi, run by the NGO Society for Promotion of Youth & Masses (SPYM), with costs to be reimbursed by the Delhi Govt. Significantly, we found that of the 633 migrants, all but 5 had bank accounts. I am now appealing to the resource-rich NRI community in the New York region for donations to SPYM for DCTs, which is yet another lead for NGOs in India to consider.

Individuals: The level at which individuals could in their own small way provide immediate cash-relief to the migrant labor, whose services many have been availing of– as painters, plumbers, carpenters etc–is to call them, get their bank account numbers and do immediate DCT. Every drop in the ocean counts.

Summing Up: These small initiatives notwithstanding, the DCT at the pan-India level would only be possible through timely interventions by the Central Govt, via the designated nodal-cum-clearing agency, opening a new portal “All-India and state-wise details of undocumented, migrant labor with bank account details for DCT” and it could continue updating this portal, with data from its own site, and clearing relevant data as and when received from state governments/NGOs. Along-side, steps would need to be taken quickly for funds to be allocated for DCT from the PM Fund. Hence, cumulatively, a beginning would have been made to come out of the current Catch-22 trap of “No allocations for DCT, as n data” or “No point collecting data for DCT, as no allocations.”  It is better late than never. Because if there is a second wave of Covid-19, or any other such pandemic in the future, a continuously updated portal such as this would enable this hitherto “invisible” segment of our poor to continue to remain “visible.”

The writer is now an activist and a New York based consultant on security issues, disaster management, sustainable development and performing arts. 

Images courtesy of https://pmjdy.gov.in/ and thesatimes | Welcome to The South Asian Times

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