The nation's interest in Kerala

Kerala will re-build itself fairly soon. When it does, it will need more than those 4 million migrants. It will be re-built by the state, by non-government organisations and by private initiatives

Floods in Kerala have devastated one of the most idyllic settlements of India. Malayalis are rich, educated and largely in harmony with nature. They live mostly in houses, not apartments. These houses and their surrounding flora and fauna — an entire ecosystem — were ravaged by incessant rains in mid August. 

The loss of physical wealth is enormous. Battered houses, washed away vehicles, lost cattle and poultry, uprooted shops, destroyed inventories, broken infrastructure... the list is long and the trauma, impossible to comprehend. 

Floods of this order destroy businesses as much as they destroy households. And, they destroy jobs. Malayalis often work outside their state, mostly in Gulf countries and are often called “Gulfies”. They are India’s biggest source of inward remittances, which has pushed up wages compared to other states.

High household income, ageing population and out-migrating working population has led to households and businesses in Kerala substantially employing migrant workers from other parts of India. These, like anywhere in the world, are the ones relatively more vulnerable to shocks. Migrant workers in Kerala are mostly unskilled labourers.

According to a government survey, the number of non-resident Keralites was 1.6 million in 2013

The floods have taken away jobs of these migrants. While locals have lost wealth in a big way, migrants have lost their source of income in an alien land.

According to a Wikipedia page on migrant labourers, there are 3.5-four million migrant labourers in Kerala. In Trivandrum, migrants account for half of the permanent residents. In Kochi, they are 35 per cent and in Chengannur, 10-15 per cent. This is a significant concentration. In some areas, migrants outnumber locals. 

Migrants into Kerala outnumber the Gulfies. According to a government survey, the number of non-resident Keralites was 1.6 million in 2013. This was much lower than a general view of the number being about three million. It means Kerala imported twice as many persons it exported. While it exports human resources mostly overseas, it imports labour from within India and its neighbouring countries such as Nepal and Bangladesh. 

According to CMIE’s estimates based on its Consumer Pyramids Household Survey, Kerala has a working-age population of 31.6 million. Of these, 12 million are a part of its labour force. Migrants therefore measure up to 11-12 per cent of the working-age population. More importantly, they account for nearly a third of the labour force. 

The shock delivered to these migrants is high. They come from the poorer strata and from all over the country. Kerala offered them a job with a better wage rate and better working condition. Their job losses will have repercussions in their home towns. 

Several special trains carried migrant workers to eastern regions and many others were first ferrying stranded migrants to Chennai for their onward journey. In a sense, one can see them carrying their misery back to their homes. The floods in Kerala will have caused an increase in unemployment in their homelands. 

The four million migrants account for a nearly one per cent of India's labour force. They mostly come from relatively less developed states of eastern India and account for two per cent of the labour force of these eastern states. 

If about one per cent of India’s employed persons (ex-Kerala) is suddenly left unemployed by a natural calamity, the problem is not just of Kerala. It is a national problem. Kerala is probably India’s most secular state. The calamity in Kerala cuts across religion, caste, culture, state-of-origin, wealth and education. 

Kerala will re-build itself fairly soon. When it does, it will need more than those four million migrants. It will be re-built by the state, by non-government organisations and by private initiatives. Each will need to hire more than Kerala can offer. 

Infusing more capital into the state will provide more employment to the rest of India. 

The interest is not only a one-off “opportunity”. There is a lot more at stake. Kerala is ageing. Its population is turning to be mostly of people over 40 years of age. Kerala will require imported labour on a sustained long-term basis. The rest of India therefore has a greater long-term stake in Kerala's prosperity. As wages in Kerala grew to match the wages in the Gulf, wages in the states that export labour to Kerala can rise slowly to match the wages in that state today.

For many in the eastern states of India, Kerala is much like what the Gulf has traditionally been for the Malayali. It is in our own interest to help Kerala re-build itself quickly.

The author is managing director and CEO, Centre for Monitoring Indian Economy P Ltd