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Recently, the government announced that it plans to transfer benefits under various schemes directly into the bank accounts of individual beneficiaries. Benefits can be the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) wages, scholarships, pensions and health benefits. Beneficiaries shall be identified through the Aadhaar number (Aadhaar is an individual identification number linked to a person’s demographic and biometric information). The direct cash transfer (DCT) system is going to be rolled out in 51 districts, starting January 1, 2013. It will later be extended to 18 states by April 1, 2013 and the rest by April 1, 2014 (or earlier). Presently, 34 schemes have been identified in 43 districts to implement the DCT programme. Currently, the government subsidises certain products (food grains, fertilizers, water, electricity) and services (education, healthcare) by providing them at a lower than market price to the beneficiaries. This has led to problems such as high fiscal deficit, waste of scarce resources and operational inefficiencies. The government is considering replacing this with an Aadhaar enabled DCT system. It has claimed that the new system would ensure timely payment directly to intended beneficiaries, reduce transaction costs and leakages. However, many experts have criticised both the concept of cash transfer as well as Aadhaar (see here, here, here and here). In this blog, we provide some background information about cash transfer, explain the concept of Aadhaar and examine the pros and cons of an Aadhaar enabled direct cash transfer system. Background on cash transfer Under the direct cash transfer (DCT) scheme, government subsidies will be given directly to the beneficiaries in the form of cash rather than goods. DCTs can either be unconditional or conditional. Under unconditional schemes, cash is directly transferred to eligible households with no conditions. For example, pension schemes. Conditional cash transfers provide cash directly to poor households in response to the fulfillment of certain conditions such as minimum attendance of children in schools. DCTs provide poor families the choice of using the cash as they wish. Having access to cash also relieves some of their financial constraints. Also, DCTs are simpler in design than other subsidy schemes. Even though cash transfer schemes have a high fixed cost of administration when the programme is set up, running costs are far lower (see here, here and here). Presently, the government operates a number of DCT schemes. For example, Janani Suraksha Yojana, Indira Awas Yojana and Dhanalaksmi scheme. In his 2011-12 Budget speech, the then Finance Minister, Pranab Mukherjee, had stated that the government plans to move towards direct transfer of cash subsidy for kerosene, Liquified Petroleum Gas (LPG), and fertilizers. A task force headed by Nandan Nilekani was set up to work out the modalities of operationalising DCT for these items. This task force submitted its report in February 2012. The National Food Security Bill, 2011, pending in Parliament, includes cash transfer and food coupons as possible alternative mechanisms to the Public Distribution System. Key features of Aadhaar The office of Unique Identification Authority of India (UIDAI) was set up in 2009 within the Planning Commission. In 2010, the government later introduced the National Identification Authority of India Bill in Parliament to give statutory status to this office.
For a PRS analysis of the Bill, see here. Aadhaar enabled direct cash transfers Advantages Identification through Aadhaar number: Currently, the recipient has to establish his identity and eligibility many times by producing multiple documents for verification. The verification of such documents is done by multiple authorities. An Aadhaar enabled bank account can be used by the beneficiary to receive multiple welfare payments as opposed to the one scheme, one bank approach, followed by a number of state governments. Elimination of middlemen: The scheme reduces chances of rent-seeking by middlemen who siphon off part of the subsidy. In the new system, the cash shall be transferred directly to individual bank accounts and the beneficiaries shall be identified through Aadhaar. Reduction in duplicate and ghost beneficiaries: The Aadhaar number is likely to help eliminate duplicate cards and cards for non-existent persons or ghost beneficiaries in schemes such as the PDS and MNREGS. Disadvantages Lack of clarity on whether Aadhaar is mandatory: According to UIDAI, it is not mandatory for individuals to get an Aadhaar number. However, it does not prevent any service provider from prescribing Aadhaar as a mandatory requirement for availing services. Therefore, beneficiaries may be denied a service if he does not have the Aadhaar number. It is noteworthy that the new direct cash transfer policy requires beneficiaries to have an Aadhaar number and a bank account. However, many beneficiaries do not yet have either. (Presently, there are 229 million Aadhaar number holders and 147 million bank accounts). Targeting and identification of beneficiaries: According to the government, one of the key reasons for changing to DCT system is to ensure better targeting of subsidies. However, the success of Aadhaar in weeding out ‘ghost’ beneficiaries depends on mandatory enrollment. If enrollment is not mandatory, both authentication systems (identity card based and Aadhaar based) must coexist. In such a scenario, ‘ghost’ beneficiaries and people with multiple cards will choose to opt out of the Aadhaar system. Furthermore, key schemes such as PDS suffer from large inclusion and exclusion errors. However, Aadhaar cannot address errors in targeting of BPL families. Also, it cannot address problems of MNREGS such as incorrect measurement of work and payment delays. Safeguard for maintaining privacy: Information collected when issuing Aadhaar may be misused if safeguards to maintain privacy are inadequate. Though the Supreme Court has included privacy as part of the Right to Life, India does not have a specific law governing issues related to privacy. Also, the authority is required to maintain details of every request for authentication and the response provided. However, maximum duration for which such data has to be stored is not specified. Authentication data provides insights into usage patterns of an Aadhaar number holder. Data that has been recorded over a long duration of time may be misused for activities such as profiling an individual’s behaviour.
India has been in lockdown since March 25, 2020. During this time, activities not contributing to the production and supply of essential goods and services were completely or partially suspended. Passenger trains and flights were halted. The lockdown has severely impacted migrants, several of whom lost their jobs due to shutting of industries and were stranded outside their native places wanting to get back. Since then, the government has announced relief measures for migrants, and made arrangements for migrants to return to their native place. The Supreme Court of India, recognising the problems faced by migrants stranded in different parts of the country, reviewed transportation and relief arrangements made by the government. On June 9, the Court directed central and state governments to complete transportation of remaining stranded migrants and expand focus of relief measures to facilitate employment for returning migrants. In this blog, we highlight some facts about migration in India, summarise key relief measures announced by the government and directives issued by the Supreme Court for the migrant population in relation to the lockdown.
Overview of Migration
Migration is the movement of people away from their usual place of residence, across either internal (within country) or international (across countries) borders. The latest government data on migration comes from the 2011 Census. As per the Census, India had 45.6 crore migrants in 2011 (38% of the population) compared to 31.5 crore migrants in 2001 (31% of the population). Between 2001 and 2011, while population grew by 18%, the number of migrants increased by 45%. In 2011, 99% of total migration was internal and immigrants (international migrants) comprised 1%.[1]
Patterns of migration
Internal migrant flows can be classified on the basis of origin and destination. One kind of classification is: i) rural-rural, ii) rural-urban, iii) urban-rural and iv) urban-urban. As per the 2011 census, there were 21 crore rural-rural migrants which formed 54% of classifiable internal migration (the Census did not classify 5.3 crore people as originating from either rural or urban areas). Rural-urban and urban-urban movement accounted for around 8 crore migrants each. There were around 3 crore urban-rural migrants (7% of classifiable internal migration).
Another way to classify migration is: (i) intra-state, and (ii) inter-state. In 2011, intra-state movement accounted for almost 88% of all internal migration (39.6 crore persons).1
There is variation across states in terms of inter-state migration flows. According to the 2011 Census, there were 5.4 crore inter-state migrants. As of 2011, Uttar Pradesh and Bihar were the largest source of inter-state migrants while Maharashtra and Delhi were the largest receiver states. Around 83 lakh residents of Uttar Pradesh and 63 lakh residents of Bihar had moved either temporarily or permanently to other states. Around 60 lakh people from across India had migrated to Maharashtra by 2011.
Figure 1: Inter-state Migration (in lakh)
Note: A net out-migrant state is one where more people migrate out of the state than those that migrate into the state. Net in-migration is the excess of incoming migrants over out-going migrants.
Sources: Census 2011; PRS.
Reasons for internal migration and size of migrant labour force
As of 2011, majority (70%) of intra-state migration was due to reasons of marriage and family with variation between male and female migrants. While 83% of females moved for marriage and family, the corresponding figure for males was 39%. Overall, 8% of people moved within a state for work (21% of male migrants and 2% of female migrants).
Movement for work was higher among inter-state migrants- 50% of male and 5% of female inter-state migrants. As per the Census, there were 4.5 crore migrant workers in 2011. However, according to the Working Group Report on Migration, the Census underestimates the migrant worker population. Female migration is recorded as movement due to family since that is the primary reason. However, many women take up employment after migrating which is not reflected in the number of women moving for work-related reasons. [2]
According to the Economic Survey, 2016-17, Census data also underestimates temporary migrant labour movement. In 2007-08, the NSSO estimated the size of India’s migrant labour at seven crore (29% of the workforce). The Economic Survey, 2016-17, estimated six crore inter-state labour migrants between 2001-2011. The Economic Survey also estimated that in each year between 2011-2016, on average 90 lakh people travelled for work.
Figure 2: Reasons for intra-state migration
Sources: Census 2011; PRS.
Figure 3:Reasons for inter-state migration
Sources: Census 2011; PRS.
Issues faced by migrant labour
Article 19(1)(e) of the Constitution, guarantees all Indian citizens the right to reside and settle in any part of the territory of India, subject to reasonable restrictions in the interest of the general public or protection of any scheduled tribe. However, people migrating for work face key challenges including: i) lack of social security and health benefits and poor implementation of minimum safety standards law, ii) lack of portability of state-provided benefits especially food provided through the public distribution system (PDS) and iii) lack of access to affordable housing and basic amenities in urban areas. 2
Poor implementation of protections under the Inter-State Migrant Workmen Act, 1979 (ISMW Act)
The ISMW Act provides certain protections for inter-state migrant workers. Labour contractors recruiting migrants are required to: (i) be licensed, (ii) register migrant workers with the government authorities, and (iii) arrange for the worker to be issued a passbook recording their identity. Guidelines regarding wages and protections (including accommodation, free medical facilities, protective clothing) to be provided by the contractor are also outlined in the law.
In December 2011, a report by the Standing Committee on Labour observed that registration of workers under the ISMW Act was low and implementation of protections outlined in the Act was poor. The report concluded that the Central government had not made any concrete and fruitful efforts to ensure that contractors and employers mandatorily register the workers employed with them enabling access to benefits under the Act.
Lack of portability of benefits
Migrants registered to claim access to benefits at one location lose access upon migration to a different location. This is especially true of access to entitlements under the PDS. Ration card required to access benefits under the PDS is issued by state governments and is not portable across states. This system excludes inter-state migrants from the PDS unless they surrender their card from the home state and get a new one from the host state.
Lack of affordable housing and basic amenities in urban areas
The proportion of migrants in urban population is 47%.1 In 2015, the Ministry of Housing and Urban Affairs identified migrants in urban areas as the largest population needing housing in cities. There is inadequate supply of low-income ownership and rental housing options. This leads to the spread of informal settlements and slums. The Prime Minister Awaas Yojana (PMAY) is a central government scheme to help the economically weaker section and low-income group access housing. Assistance under the scheme includes: i) slum rehabilitation, ii) subsidised credit for home loans, iii) subsidies up to Rs 1.5 lakh to either construct a new house or enhance existing houses on their own and iv) increasing availability of affordable housing units in partnership with the private sector. Since housing is a state subject, there is variation in approach of States towards affordable housing.2
Steps taken by the government with regard to migrant labour during the lockdown
During the lockdown, several inter-state migrant workers tried to return to their home state. Due to the suspension public transport facilities, migrants started walking towards their home state on foot. Subsequently, buses and Shramik special trains were permitted by the central government subject to coordination between states.[3],[4] Between May 1 and June 3, more than 58 lakh migrants were transported through specially operated trains and 41 lakh were transported by road. Measures taken by the government to aid migrants include-
Transport: On March 28, the central government authorised states to use the State Disaster Response Fund to provide accommodation to traveling migrants. States were advised to set up relief camps along highways with medical facilities to ensure people stay in these camps while the lockdown is in place.
In an order issued on April 29, the Ministry of Home Affairs allowed states to co-ordinate individually to transport migrants using buses. On May 1, the Indian Railways resumed passenger movement (for the first time since March 22) with Shramik Special trains to facilitate movement of migrants stranded outside their home state. Between May 1 and June 3, Indian Railways operated 4,197 Shramik trains transporting more than 58 lakh migrants. Top states from where Shramik trains originated are Gujarat and Maharashtra and states where the trains terminated are Uttar Pradesh and Bihar.[5] Note that these trends largely correspond to the migration patterns seen in the 2011 census data.
Food distribution: On April 1, the Ministry of Health and Family Affairs directed state governments to operate relief camps for migrant workers with arrangements for food, sanitation and medical services. On May 14, under the second tranche of the Aatma Nirbhar Bharat Abhiyaan, the Finance Minister announced that free food grains would be provided to migrant workers who do not have a ration card for two months. The measure is expected to benefit eight crore migrant workers and their families. The Finance Minister also announced that One Nation One Ration card will be implemented by March 2021, to provide portable benefits under the PDS. This will allow access to ration from any Fair Price Shop in India.
Housing: The Aatma Nirbhar Bharat Abhiyaan also launched a scheme for Affordable Rental Housing Complexes for Migrant Workers and Urban Poor to provide affordable rental housing units under PMAY. The scheme proposes to use existing housing stock under the Jawaharlal Nehru National Urban Housing Mission (JnNURM) as well as incentivise public and private agencies to construct new affordable units for rent. Further, additional funds have been allocated for the credit linked subsidy scheme under PMAY for middle income group.
Financial aid: Some state governments (like Bihar, Rajasthan and Madhya Pradesh) announced one-time cash transfers for returning migrant workers. UP government announced the provision of maintenance allowance of Rs 1,000 for returning migrants who are required to quarantine.
Directions by the Supreme Court
The Supreme Court reviewed the situation of migrant labourers stranded in different parts of the country, noting inadequacies and lapses in government response to the situation.
[1] Census, 2011, Office of the Registrar General & Census Commissioner, Ministry of Home Affairs.
[2] Report of Working Group on Migration, Ministry of Housing and Urban Poverty Alleviation, January 2017, http://mohua.gov.in/upload/uploadfiles/files/1566.pdf.
[3] Order No. 40-3/2020-DM-I (A), Ministry of Home Affairs, April 29, 2020, https://prsindia.org/files/covid19/notifications/4233.IND_Movement_of_Persons_April_29.pdf.
[4] Order No. 40-3/2020-DM-I (A), Ministry of Home Affairs, May 1, 2020, https://prsindia.org/files/covid19/notifications/IND_Special_Trains_May_1.jpeg.
[5] “Indian Railways operationalizes 4197 “Shramik Special” trains till 3rd June, 2020 (0900hrs) across the country and transports more than 58 lacs passengers to their home states through “Shramik Special” trains since May 1”, Press Information Bureau, Ministry of Railways, June 3, 2020, https://pib.gov.in/PressReleseDetail.aspx?PRID=1629043.
