Labour mobility

Demand in rich countries is an opportunity

The Government of India is aiming to enter into pacts with various developed countries to send people to work in sectors such as farm, construction, and manufacturing. As reported by this newspaper on Tuesday, Greece has approached India with a demand for about 10,000 seasonal workers to work in the farm sector. Italy is looking for people to staff municipal bodies in different towns. India is already reported to have signed an agreement to send over 40,000 workers — and that may be increased further — to Israel. Before the war with Hamas broke out, there were about 18,000 Indian workers in Israel, engaged mainly in caregiving. However, with the war continuing, it is looking to fill in for about 90,000 Palestinians who used to work in Israel.

The government’s initiative must be welcomed for a variety of reasons. India is a labour-surplus country and has been exporting workers around the world through both formal and informal channels over the years, and that is reflected in the level of remittances it receives every year. India has been advocating labour mobility in its trade agreements with different trading partners. Given the ageing population in many developed countries, demand for imported labour is expected to increase, presenting an opportunity for India to fill the gap. 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. 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. Some workers, to be sure, would want to stay back, but given the vast pool of surplus labour, it is unlikely to create shortages in India. In this context, what India needs to do anyway is to improve the ecosystem for skilling in different sectors.

However, from the policy point of view, 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 annual Periodic Labour Force Survey, for example, over 57 per cent 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 per cent of the labour force was engaged as helpers in household enterprises, while more than 21 per cent identified themselves as casual workers. It is widely accepted that India needs to create gainful employment for its rising workforce. It is thus worth reiterating that India’s unemployment and under-employment problem will not be solved by sending labour to rich countries. Nonetheless, the country must take up such opportunities because it will benefit in the long run.

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.