Big city pull: Easing migration will be tough, say experts
- The supply demand gap of workforce across states is skewed and unless there is an immediate impact of agricultural reforms and infrastructure development, migration will not ease, recruiters said.
The demand-supply gap of workers across states is skewed and unless there is an immediate impact of agricultural reforms and infrastructure development, the Union budget's aim to ease migration will be a tough task, recruiters warned.
In the budget for fiscal 2025-26, the government said it aims to generate new businesses and employment for young, marginal and small farmers, and landless families and rural women. "The goal is to generate ample opportunities in rural areas so that migration is an option, but not a necessity," said finance minister Nirmala Sitharaman during her budget speech on Saturday.
But recruiters note that if the budget's focus was on scaling down the pressure on the top 30 cities, then it is the tier-II and -III cities, which should be developed to absorb the migrant workforce.
Also read | Budget eyes agriculture, MSMEs, other labour-intensive sectors for job creation
"Economic development (across states) will be lopsided for the foreseeable future. Migration of workforce cannot be stopped since both employment and demand for specific skillsets are available in certain clusters," pointed out Aditya Narayan Mishra, chief executive officer of CIEL HR Services, a staffing firm.
Therefore, demand for candidates from industrial training institutes may be more in cities of states such as Gujarat, Tamil Nadu and Karnataka—well known for their manufacturing hubs—than in other states. Recruiters say they want to study the blueprint of exactly how the government wants to create more employment in villages.
The latest Economic Survey mentions that as per the Periodic Labour Force Survey (PLFS) the agriculture sector remains dominant in employment, with its share rising from 44.1% in 2017-18 to 46.1% in 2023-24. In comparison, the share of industry and services sectors saw declines in employment share, with manufacturing falling from 12.1% to 11.4%, and services from 31.1 % to 29.7 % during the same period.
However, recruiters note that the young and educated want to be part of the formal employment sectors rather than agriculture, hence the rush to move to the cities. These roles could be in enterprises, manufacturing, IT, etc.
Costly affair
According to staffing firms that hire in large numbers, the cost of getting a blue- or white-collar employee to move to another state is high—and often shared between the vendors and the employer.
But in spite of accommodation challenges or cultural differences, the pull of a city with higher earning potential remains strong.
A blue-collar worker who is skilled in a particular trade like carpentry, masonry and employed in construction or real estate in a big city may earn ₹12,000– ₹13,000 a month, barely ₹5,000 more than what they would earn in their hometown. A white-collar employee attached to a firm will earn more.
While manpower is available in states like Bihar, Jharkhand, Uttar Pradesh, West Bengal, Assam, Meghalaya, the movement is towards the more developed economies of states such as Maharashtra, Karnataka, Tamil Nadu.
Also read | 53% of graduates, 36% of postgraduates underemployed: Economic Survey
“The demand-supply gap is different in different parts of the country and hence, migration is difficult to ease. The earning potential will depend on the investments in agricultural productivity and infrastructure development to retain the workforce in the rural belts," said Balasubramanian A., senior vice president and business head for staffing firm Teamlease Services.
While recruiters have said more clarity is needed on the ways in which these jobs will get created, Shiv Agrawal, managing director of ABC Consultants pointed out that development of tier 2 and 3 cities could be an important way to do so.
"Even if one is able to move to tier 2 city instead of tier 1, it is a step forward. If the global capability centres (GCCs) manage to establish in smaller cities and recruit from there, the pressure on top 20 cities ease," Agrawal said.
The budget aimed to set up a national framework to promote Global Capability Centres in emerging tier 2 cities. It comes at a time when GCCs are competing with established sectors like IT as an employer of choice and the move will prevent migration of the salaried workforce to metros.
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First Published:3 Feb 2025, 09:38 AM IST
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