Decline in Rural to Urban Migration in India

January 4, 2025

Recent data from a study titled ‘400 Million Dreams!’ by the Economic Advisory Council to the Prime Minister (EAC-PM) indicates decline in rural to urban migration in India. The report reveals a reduction of 5.4 million migrants, or 11.8 per cent, compared to 2011. This decline is attributed to various factors, including improved government services and better economic opportunities in rural areas.

Migration Trends Over the Years

The migration rate in India has decreased from 37.6 per cent in 2011 to 28.9 per cent in 2023. The number of workers migrating for economic reasons has fallen to 5 million, representing only 6.7 per cent of the workforce. This is a notable drop from 8.2 per cent in 1991 and 2001, and 9.3 per cent in 2011. The workforce has grown at a compound annual growth rate (CAGR) of 1.8 per cent, while migration decreased at -1 per cent.

Factors Influencing Migration Decline

The study suggests that improved government services, such as education and health, along with better infrastructure and connectivity, have contributed to the decline in migration. However, the reality of this assertion is questionable, as data shows a decrease in labour movement despite these improvements.

Evidence from Transport Data

Using railway ticket data, the report marks a 6.7 per cent decline in post-pandemic migration during peak months. Additionally, bus travel has seen a 16 per cent decline since FY11. The number of non-suburban railway passengers has also decreased, indicating a contraction in economic migration.

Urban-Rural Remittance Patterns

The report analyses savings account to current account (SA/CA) ratios to assess urban-rural remittances. Higher SA/CA ratios indicate areas with outbound migration, while lower ratios reflect high economic activity. Major cities like Mumbai and Delhi have lower ratios, suggesting greater economic activity compared to rural areas like Bihar, which has a high ratio of 10.14.

Rural Infrastructure and Migration

The claim that rural electrification has reduced migration is debated. Historical data shows minimal increases in electrification since FY01. The pace of rural housing construction under the PM Awaas Yojna-Gramin has also been modest, suggesting that improved infrastructure has not impacted migration trends.

Economic Slowdown and Migration

The report indicates that the decline in migration reflects a rising ruralisation trend rather than urbanisation. The dependence on agriculture has increased, leading to disguised unemployment and flat rural wages. The slowdown in economic activities and rising automation have contributed to this trend.

The EAC-PM is a key advisory body for India’s economic policy.
Bihar’s high SA/CA ratio indicates lower economic activity.
The PM Awaas Yojna-Gramin aimed to improve rural housing.
The contraction in migration has resulted in rural labour oversupply.
Urbanisation previously drove migration during India’s economic liberalisation.

Implications for Future Policies

The contraction in migration suggests a need for policies that support rural incomes through fiscal measures or employment-generating programmes. The stagnation in worker movement across various transport modes indicates a broader economic challenge that requires targeted interventions to stimulate growth and migration.

« Previous Post Next Post »