An analytical article of 1987 by Dev Nathan argued that this portion of consumption of the workers was “a tribute paid by the pre-capitalist, subsistence agrarian sector to the capitalist sector.” He remarked that the existence of such a tribute can be established  by determining whether the remittances made by the workers cover the  cost of maintaining the worker’s family in the  village. Noting that the areas that traditionally supply labour to industry have not prospered, but sunk further into decay, he concluded that the agrarian sector was indeed being drained to subsidise industrial profits. (Nathan 1987)  

Does this analysis hold today? A study (Tumbe 2015) of the NSS 2007-08, which had a special focus on employment and migration, makes important observations. It finds that nearly 20 per cent of rural households have a member who has migrated for work. Migrant labour can be divided into short-term/seasonal migration; semi-permanent migration, for a large part of the year; and permanent migration. (i) In short-term migration, poorer households generally migrate for a few months in the slack agricultural season, through the mediation of labour contractors, working in activities such as construction and agriculture. This pattern is particularly typical of Central India, with its high adivasi population. Such households generally do not remit money home. (ii) Semi-permanent migrants are less poor, generally male, and their households typically are self-employed in agriculture. Such households tend to receive remittances from the out-migrant member. Despite these remittances, the women of such households are in fact more likely to take up work in the village, generally in agriculture (either self-employed or wage labour). So the remittance economy is associated with a greater ‘feminization’ of the agricultural workforce. (iii) A third, much smaller, group of recipient rural households is largely dependent on remittances, generally larger sums (sometimes from overseas members). This group tends to withdraw from the workforce altogether.

The study calculates that about 10 per cent of rural households receive remittances, and, for these households, remittances make up about 30 per cent of consumption expenditure. It is the relatively better-off households who receive the bulk of such remittances (the reason being that members of poorest households tend to be stuck in the countryside, and even if they migrate they earn less). Nearly all households which received remittances reported using them for some form of household consumer expenditure, including food items, education of household members, durable goods, marriage and ceremonial expenses, and health care. Only a trivial portion of these remittances is saved or invested in productive assets.¹³

Rural areas which receive remittances tend to see an increase in employment of males in construction, retail trade, restaurants, and transport, but not in manufacturing. The relative absence of males (in the regions with high out-migration for work) leads to some tightening of the labour market, and a rise in local wages.

Apparently, then, remittances may have some positive, though limited, effects on rural households and the rural economy, though not on productive investment. However, the question we asked was whether remittances cover the cost of maintaining migrant workers’ families. The answer is clearly that they do not, excepting a small section of relatively better-off families. Note that, while nearly 20 per cent of rural families have a migrant labour member, only 10 per cent receive remittances at all. Secondly, on average, even remittance-receiving families are forced to rely on local employment, typically agricultural work, for 70 per cent of their consumption needs. (Moreover, it has been shown that women’s labour in collection of free goods for the household¹⁴ does not get adequately captured by the present methods of measuring national income, and hence, with proper accounting, the share of remittances in meeting the subsistence needs of recipient households may be even lower than 30 per cent.)

How much have migrant workers’ remittances boosted the rural economy? The Economic Survey 2016-17 notes that net out-migration takes place from poorer states such as U.P., Bihar, Jharkhand, M.P., and Rajasthan; workers migrate to better-off states such as Delhi, Maharashtra, Gujarat, Tamil Nadu, and Kerala. But this pattern of migration, and the income gap between the labour-supplying and labour-attracting states, continues to get reproduced over the years. The Survey argues that there has been a steep rise in migration for work across India. And yet it candidly admits “a deep puzzle as to why greater internal integration has not led to a narrowing of income and consumption gaps across states... the co-existence of diverging incomes and consumption alongside the equalizing forces of internal integration of goods, people and capital is a mystery waiting to be deciphered.” (GoI 2017, 266) In fact, the Survey finds that consumption levels of different regions have been diverging for the last two decades, both between and within states. (RUPE 2017b, 57-64)

The problem of which sector is subsidising which depends on how we characterise these households. If we view them as peasant households, the flow of remittances from wage work in urban areas may help a section of peasant families keep their heads above water.¹⁵ But if we view them as worker households, it is clear that wages by themselves are far from meeting the consumption costs (Marx’s costs of reproduction, or necessary labour) of migrant workers’ families. So the portion of consumption met from the agrarian sector helps working class families keep their heads above water, and allows employers to pay the workers less wages, in effect subsidising capitalists.

This dual struggle to keep one’s head above water, and the condition of being exploited in both the industrial and agrarian sectors, has marked the Indian working class from its inception. A study of Bombay’s working class under British rule remarks:

Migrant workers to the city continued to maintain close connections with their village base over several generations. This has commonly been interpreted as the consequence of their rural mentalities. Lacking any commitment to the industrial setting, it is said, migrant workers were simply concerned to earn cash quickly and return to the land at the first opportunity. Yet underlying, indeed undermining, these characterizations lay the fact that the low wages and uncertain conditions of work forced most migrants to retain their rural connections as a second base of material provision in the city. Indeed, the purpose of migration was frequently to enable the peasant household to retain its village holding. For this reason, migrant workers were often strongly committed to the urban setting and struggled to defend their position within it. The rural connection of the working classes should not be seen as merely an effect of the early stages of industrialization, not least because workers in Bombay would appear to have been passing through them for over a century. (Chandavarkar 1994, 9)

Agrarian base extracts a political price
The agrarian base of workers has another implication too. In the absence of an agrarian revolutionary movement, it can undermine the militancy of the workers. A striking demonstration of this can be seen in the Bombay textile workers’ strike of 1981-83.

By 1981, the textile workers lacked ‘striking power’, as the textile millowners had outsourced production to powerlooms in the unorganised sector, and were waiting impatiently to convert mill land into real estate. The workers’ only strength was the potential organisation and mobilisation of their vast numbers (2.5 lakh) in the city. The history of Bombay textile workers’ struggles indeed had been replete with examples of militant mass mobilisation and confrontation with the authorities. However, as the 1981 strike instead took the form of a prolonged wait, without a decisive mobilisation of strength and solidarity, the large majority of workers returned to their villages and waited for an outcome.

Millworkers’ village households managed to survive despite the lack of wage income from the mills. At the same time, the fact that the bulk of the workers had left for their villages relieved the political pressure on the Government to intervene. The union leadership toured some of the villages of workers to rally support for the strike, but counseled the workers to remain there till the strike ended. The pressure created by the massive strike virtually petered out. When the mills finally reopened in 1984, the effective outcome was that more than half the workforce had been retrenched peacefully, at no cost to the owners. This was followed by the steady reduction of the remaining workforce.

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Notes:

13. Tumbe 2011.The top 40 per cent of households receive the bulk of remittances. Over 90 per cent of households use the remittances for household consumer expenditure. Only 6 per cent of remittances is saved or invested in productive assets. (back)

14. About 41.5 per cent of rural and urban women participated in collection of wood, fuel wood, vegetables, fruits and leaves, and fodder, wood and other raw material for family livelihood, compared with 7 per cent of men. The average weekly time spent on these activities was 6.11 hours for women and 0.97 hours for men. (back)

15. Note, though, that in the 2012-13 NSS, 70 per cent of ‘farmer’ households were in deficit despite their farm income being supplemented by non-farm wages. (back)