Budget 2022: Migrant Workers' Long Road Back To Cities Paved With Debt, Lack Of Jobs

The pandemic-inflicted pain and struggles of India’s migrant workers may vary but their stories have a common thread—rising indebtedness with no savings or social security to fall back on.

As the Covid-19 virus swept the world in March 2020, India imposed one of the strictest lockdowns in the world—one that has been criticised for being inadequately planned. Everything bar emergency services were shut within a day's notice. The country's vast migrant worker force was left stranded in cities, far away from their homes.

Deendayal Chauhan, 31, vividly remembers those days. "We had no rations. It was like being jailed. Neither could we step out, nor could we do something sitting inside. We struggled for food," Chauhan says. "Everyone started getting anxious and some workers even ran away."

At that time, Chauhan was employed as a daily wage worker at a factory site in Bavla district of Ahmedabad, Gujarat. His home—Azamgarh in Uttar Pradesh—was over 1,500 kilometres away. He earned Rs 350-400 for a day of work (up to Rs 12,000 a month). He was living, with four others, in a makeshift single-room that had a metal sheet for a roof. "Summers were harsh. The room would be a smoldering pit. But the days burned by."

His wait ended three months later when in May he was able to secure a seat on the special Shramik train run by the Indian Railways to return home. Things got worse from there.

Without a job for the next several months, Chauhan had to borrow money from acquaintances to sustain his family that included a father, a brother, a wife, and two kids. The brother suffered a liver infection, which added to Chauhan's financial burden.

He amassed a debt of over Rs 1.5 lakh within a couple of months, some of which had to be repaid with interest. "I had no work for over six months. Without an income, what will one eat?"

Ajeet Yadav, 35, another contract worker from Azamgarh ended up borrowing a total of Rs 2.1 lakh for ration supplies, children's school fee and other expenses. "Dikkat to aisi hui hai ke abhi tak sambhal nahi paayi hai. [The trouble that began then is still not over for us]."

While there is no reliable government data to conclusively show how indebtedness among migrant workers rose due to the pandemic, anecdotal evidence points to a trend.

Field studies undertaken by the Centre for New Economics Studies at OP Jindal Global University in migrant settlements around Delhi, Lucknow, Surat and Pune, showed that amid growing uncertainty about incomes, the majority of daily wage workers resorted to taking loans from relatives and intra-community sources. Another survey of 8,000 such workers by the Stranded Workers Action Network, after the second wave of Covid-19, showed that most of them had fallen into the debt trap.

A report by the State Bank of India's research team in September said that household debt in India spiked after Covid-19. It estimated that based on the government's India Debt & Investment Survey, average rural household debts doubled to Rs 1.16 lakh in 2021 compared to Rs 59,748 crore in 2018. The State of Working India 2021 report by the Azim Premji University also showed that poorer households borrowed a much higher multiple of their pre-pandemic income.

"This is a catastrophic situation," said Jayati Ghosh, an economist and professor at the Centre for Economic Studies and Planning, School of Social Sciences at Jawaharlal Nehru University. Ghosh said it would take years just for these workers to recover and repay the debt—made even more challenging amid rising expenses and no income growth.

India's rural hinterland couldn't offer much reprieve to the migrant workers.

None of the workers BloombergQuint spoke with were able to find regular jobs in their respective villages. India's rural jobs guarantee programme failed to keep up with the demand for work as unemployment rose. Government data shows that between April 2020 and January 2022, over 58 crore households demanded work under the Mahatma Gandhi National Rural Employment Guarantee Act. Only 47 crore of them were provided with work—a 19% deficit.

"Most of the MGNREGA work in villages is taken up by existing workers. There was no new work for the influx of migrant workers who returned home," Yadav said. "Besides, the work is not regular and pays less. It would be there for roughly 10 days a month."

The precarious situation forced many to take up agricultural work or odd jobs.

Haseeb Raja, 25, was working as a waiter in Navi Mumbai when the pandemic struck. He reached home in Kannauj, Uttar Pradesh, to face joblessness after travelling four days in a small Tata Ace carrier along with 10 other workers. Having to look after his parents, Raja took up rolling tobacco beedis for a measly Rs 120 a day.

23-year-old Madan Kaul was frying jalebis in a Mumbai restaurant for Rs 10,000 a month. Since the pandemic, he returned to his village in Mirzapur and started tending to other people's fields for less than Rs 200 a day. "I just could not afford to stop earning," Lal said. "There's too many mouths to feed, too few hands to earn in our family."

Surviving on significantly lower incomes with a debt burden and families to look after was simply not a sustainable option. There was only one other option — go back to the city.

"I was afraid to return. Where would I go? Where would I earn? But I had people depending on me," Chauhan said. "I am yet to repay about Rs 50,000 even after a year of working. What other option did I have?"

When Yadav decided, after seven months of joblessness, to pack his bags and move back to urban clusters, he made a call to his previous contractor. But for the first few months of his return, he worked for less than Rs 300 a day—25% less than his pre-pandemic wage.

There was no stability either. He kept moving cities every few months. He traveled to a site in Goa, then to Bengaluru, Karnataka, and is now in Thiruvananthapuram, Kerala. He continues to work at Rs 375 per day now, still a smidge lower than his pre-pandemic wage.

The story is no different for 24-year-old Arun Maurya who had to take a loan by offering his wife's jewellery as collateral. When he decided to return from his village, the search for work took him from Chennai, Tamil Nadu, to Goa and then to Vadodara, Gujarat. "I have done an industrial training certification as a technician and still I struggle to earn more than Rs 8,000 per month," he said.

Rising costs have only exacerbated the problems. India's retail inflation in December surged to its highest since July 2021, led by vegetable prices. Higher inflation is also resulting in a consumption slowdown for makers of fast-moving consumer goods. That hits the migrant workers more who are already bogged down. SWAN's survey, released in September 2021, showed that about 76% of the people they spoke with were at the brink, with less than Rs 200 on them.

"My pay is the same as two years ago, but the prices have skyrocketed," Chauhan said. "And now I have a debt to clear as well."

The Covid crisis laid bare the lack of social security for India's over 42 crore informal workers. One blip can push them into poverty—like the 7.5 crore Indians that already have in the pandemic, according to Pew Research.

The Indian government, on its part, has taken baby steps. It has launched the e-Shram portal—a national database for unorganised sector workers. The Ministry of Labour & Employment plans to seed the database with Aadhaar and then link it with other social security schemes like the Public Distribution System and the Pradhan Mantri Jeevan Jyoti Bima Yojana. It will also provide Rs 2 lakh as compensation to the workers' kin in case of deaths and Rs 1 lakh in case of disability.

The government says it has registered over 22 crore informal workers already. None of the migrant workers BloombergQuint spoke to had registered on the portal so far.

Such a database will barely help, Ghosh said. "What we need is to provide cash payments as compensation. This is not a free handout. This is to compensate people for the losses they incurred as work was stopped due to abrupt lockdowns. Many countries have done it, not just rich countries."

The bare minimum the government can do, Ghosh said, is make budgetary provisions for universal food, healthcare and employment guarantees. These are three areas that should be a "no-brainer" for increasing spending. "We're the only country where total government spending went down during a pandemic. Not increasing spends on these areas would be criminal."

Chauhan said a cash transfer and a free provisioning of grains would go a long way in helping his situation. "If there was some cash transferred then I can use that for expenses and a larger portion could go towards clearing my dues and probably saving some money for the future."

But for others, there's only apathy towards the budget. "The governments, they always announce things , but we barely get any benefits," Raja said. "For us, life goes on as it is."

Yadav said he doesn't think it is the government's job to bail him out of debt, anyway. "I have borrowed the money, I will somehow repay it. I had to do it for my kids. What will the budget do about it? The least the government should do now is to just think once about people like us before taking major decisions like shutting everything down."