Protectionism and Reverse Migration

The H1B visa suspension by the US to have Rs 1200 crore impact on Indian IT firms, Crisil ratings said. The coronavirus pandemic has induced protectionism around the world encouraging domestic aspirations. The protectionism adversely affects the migrant labours abroad and in the country. In the globalization era, the protectionism against free movement of labour affects the labours and also leaves the employers to deprive of cheap labours.

Protectionism isn't the solution

The CoVID'19 has affected the economy and left many jobless but protectionism is definitely not a solution for the revival. The suspension of H1B visas has created a debate and a strong resistance among the tech employers in the US mainly those depended on Indian IT employees. However many experts argue that the visa ban won't help in increasing domestic employment. This kind of protectionism to increase domestic employment is done not only in the US but also in the Gulf, and to our surprise in India too. The world is moving towards liberalisation and globalisation that encourages free movement of labour and capital, working against the liberal spirit during the time of a crisis is not rational as humankind should fight the crisis together.

When the decision of protectionism is evaluated, the investors may tend to choose other destinations of cheap labour and taxes instead of places that encourage protectionism. This might affect the employment opportunities and the tax revenues of the country. During the period of economic slowdown, the huge low-interest loans should never be missed due to irrational decisions.

The Haryana cabinet cleared a proposal to draft an ordinance for reserving 75% of private-sector jobs for the residents of the state. This move of the Haryana govt is totally irrational during the time of a crisis that has heavily hit the nation. The govt may implement their election manifesto and please the voters and supporters but what will be the situation of the migrant labours and employers those who depend on them. This is a regressive decision compared to the central govt's decision of promoting free markets in agriculture.

Reverse migration & crisis due to protectionism

The suspension of H1B visa by the US will affect the Indian IT companies and employees much than it would benefit the US employees and employers. Also, the suspension of M1 and L1 visas for students and professionals those who attend classes online and work from home is also cruel. This is going to badly affect the students studying in the US. The H1B visa suspension consoles us when we think of Kuwait's ex-pat quota bill that may force 8 lakh Indians to leave.

The skilled labours who were affected by the protectionism may get a job since India is attracting more foreign investments in the IT and other sectors. But the unskilled and semi-skilled labours worked in the Gulf countries might get very much affected. India is already undergoing a very hard time due to the reverse migration, people are not getting enough food or job to survive.

The reverse migration definitely created stress in the underdeveloped areas in India. In the previous article, I argued the reverse migration may not cripple the rural economy as the migrant labours started their journey back to the states where they usually work and that would happen even in the case of foreign countries. But to my shock, the countries came up with protective decisions to encourage domestic employment.

Haryana govt's decision is irrational and cruel. The central govt is struggling to handle the migrant labours who migrated to their home states and migrating back. The people are suffering without getting proper income and food. There is no clarity on free rations for the returning migrants. The MGNREGS that comes as a saviour to the people has attained its saturation. About 1.5L households have completed their 100 days of work for the year and a 20L households will complete their working days in about one and a half months. After the completion what will be their situation in a quite monsoon season with no agriculture jobs as sowing is already done? The Pradhan Mantri Garib Kalyan Rojgar Abhiyan is also incapable of accommodating all the migrant workers and providing them with a considerable salary.

With this stressful situation in the rural economy, people always tend to migrate to a better place in search of a good salary and living condition. But the protectionism stays as a barrier and affects the most underprivileged section of the society. The State should not restrict the free movement of labour and capital and ensure a liberal approach in economic decisions. The migrant workers should be monetized through direct benefits or increasing number of working days in MGNREGS etc.

PROGRESSIVE RATIONALIST

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