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Impact of COVID-19 on Migrant Households and Remittances in India: A Literature Review

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In their paper titled ‘Migration as a Strategy for Household Finance: A Research Agenda on Remittances, Payments, and Development’, authors Michael Clemens and Timothy Ogden argue that migration should be viewed as an investment that poor households make despite the high upfront costs, because of the high returns they anticipate. Studies have shown that migrants moving to large cities from small towns and villages, and those moving from poor to rich countries can witness very large income gains for the same work, making migration the most profitable investment option available to them (Clemens, Montenegro, & Pritchett, 2009) (McKenzie & Gibson, 2010). They transfer a large share of their earnings back home as remittance, thereby lifting the living standards of their families (Yang, 2008) (McKenzie & Gibson, 2010) (Clemens & Tiongson, 2012). Remittance helps insulate households from local shocks and can provide a cushion during times of financial distress such as droughts, floods and famines. They are also more effective in improving development outcomes of households than development aids, and welfare schemes rolled out by agencies and governments, respectively, as money is transferred directly to the beneficiary households without leakages (Baird, McIntosh, & Özler, 2011). It is not just the effect of migration and remittances on households but also their sheer scale that makes them noteworthy for further research. According to the World Bank’s estimates of 2019, there were more than 272 million international migrants globally, sending back close to 716 billion US$ as remittances to their families. In fact, remittances have overtaken both FDI and development aids to become the main external contributors to the GDPs of low- and middle-income countries (World Bank Group, 2020).

COVID-19 has had a catastrophic effect everywhere, infecting and killing millions while disrupting livelihoods and economies worldwide. But it has affected migrant households disproportionately, as a vast majority of them are employed in the informal sector in sectors such as construction, services, tourism and hospitality, with little to no job security and social safety nets. They have been the first ones to lose jobs in large numbers, and even among those who have not, a majority live and work in precarious conditions, which put them at a higher risk of catching the highly contagious virus (World Bank Group, 2020). For migrants who come from low-income households, this has also disrupted a vital income stream that helped their households stay afloat even during local shocks. Therefore, it is pertinent to understand the impact the pandemic has had on the income flows of migrant households, in turn affecting their financial choices as well as their overall financial well-being.

In this post, I review various sources of literature to inform readers about how COVID-19 has affected migrant households in the context of India. I look at its impact on the financial lives of migrant households, the coping mechanisms they have adopted, and the policy measures introduced by the governments at various levels to address their problems and plan a smooth path to recovery. I conclude by summarising some of the recommendations that sector experts have made in the recent past to ease the plight faced by migrant households.

Impact of COVID-19 on Migration and Remittance in India

India has for long been the largest sender of international migrants (around 16 million people) and the largest receiver of remittances (around 83 million US$) (World Bank Group, 2020). However, this piece focuses more on internal migrants, especially seasonal migrants[1], since they are more likely to be from socially marginalised and low-income households and therefore more vulnerable to economic shocks such as the one presented by COVID-19 (Rajan, Sivakumar, & Srinivasan, 2020). According to Census 2011, there are around 455 million migrants in India, out of which close to 42 million have migrated for work/employment. More recent figures from the Economic Survey pointed out that close to 140 million internal migrants were sending back approximately 26 billion US$ to their families annually before COVID-19 broke out (Shukla & Manikandan, 2020).

Seasonal migrants were hit the hardest because of the nationwide lockdown that was imposed on March 21, 2020, to contain the spread of the virus. In the days leading to this lockdown, most of them lost jobs and no longer had any source of income to send back as remittance (Khanna, 2020). In fact, a lot of them had to wait for the money to be sent from their homes to fund their travel back home. All this was reflected in the Aadhar-Enabled Payment System witnessing the second steepest decline in remittance flows since its inception[2],[3], while most of the Payments Banks reported up to 80 per cent decline in remittance flows and predicted a prolonged impact due to the prevailing uncertainty over when economic activities would resume (Shukla & Manikandan, 2020). This was in addition to the large human cost that was borne by migrants, as was evident with stories emerging in the media of migrants being stranded without food and shelter in the middle of their painstaking journeys back home in peak summer. Scholarly estimates put the number of migrants returning home anywhere between 5 and 35 million, in the absence of official government data. Despite enduring these journeys, their situation back home has been much worse. A majority of migrants hail from states such as Uttar Pradesh, Bihar, Rajasthan and Odisha, which perform below the national average in terms of healthcare capacity, and are also characterised by low job opportunities, especially in rural areas. Their return has further widened the labour demand-supply gap in their towns and villages, as has been reflected in increased demand for MGNREGA jobs in subsequent months (Myadam & Ramesh, 2020).

Many surveys which have since been conducted in these states show the dismal conditions of migrant households and the coping mechanisms they have adopted for survival. One survey conducted in Uttar Pradesh’s Bundelkhand region—where 80 per cent of households send at least one migrant to states like Gujarat, Maharashtra and Delhi—showed there was widespread hunger and desperation among migrant households for a source of livelihood. There was near total dependence on state-run PDS and employment guarantee schemes for basic sustenance. Faulty exclusions and delays in payments from these schemes pushed these households to the brink of starvation. Even households included in the schemes got only rice and wheat and had to resort to means such as bartering and high-interest borrowing to buy other essentials like cereals, pulses and vegetables. The reverse migration increased demand for work in the source states substantially and might have brought down wages further. Lack of job opportunities has left them with no choice but to return to urban centres as soon as possible, despite having endured hardships to reach their homes just a few months before (Bera, 2020).

Another survey in Maharashtra reported that more than 70 per cent of migrants did not receive any payments during the lockdown, nor did they have any alternate source of livelihood back home. Only 16 per cent of them had managed to retain their earlier income, but even fewer found their incomes sufficient to manage household expenses. This forced them into total dependence on social welfare measures from the government, but more than a quarter of them reported not getting any government assistance. Almost the same fraction of respondents reported having starved, and almost a half of them said arranging food supplies was their biggest concern (Sriraman & Singh, 2020). Yet another survey by IFPRI also showed similar results. Households with returnee migrants were found to be financially worse off than households without migrants. These households were coping by reducing the number of food items in their meals, limiting the number of meals, borrowing in kind from their friends and relatives, borrowing cash from moneylenders, and selling their assets. Women were found to be facing a disproportionately higher brunt because of the crisis with the increased workload, and women from migrant households were especially worse off (Limaye, Chandurkar, & Choudhury, 2020).

A Critical Analysis of the Government Response

The Indian government’s immediate response to this acute rural distress in the aftermath of mass reverse migration was a significant expansion of social assistance programmes to the tune of 1.7 lakh crore rupees under the banner of Pradhan Mantri Garib Kalyan Yojana (PMGKY). Among other things, the scheme primarily included provision of essential food supplies through the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) for all those coming under the ambit of PDS, guaranteed rural employment through MGNREGA, subsidised cooking gas through Ujjwala Yojana, direct cash transfers to people involved in various COVID-19 affected professions as well as women through the Pradhan Mantri Jan Dhan Yojana (PMJDY), and loans to migrants for self-employment at their native places under the Mudra Yojana (Gupta, Kumar, & Janani, 2020). Since many migrant workers did not have access to documents needed to access these social welfare schemes in the destination states, the government also decided to provide food grains to those who were not beneficiaries under PDS and/or did not have any necessary documents, for a period of two months (PRS India, 2020). As a medium-term measure, it also pledged to complete nationwide portability of ration cards for availing PDS anywhere in the country by 2021.

Further, to address the growing demand for employment in migrant source states, the government launched the Garib Kalyan Rojgar Abhiyan (GKRA) employment programme in six states by clubbing together various existing schemes under different ministries (Sarma & Sunder, 2020). In this year’s budget, the government has allocated 73,000 crores for MGNREGA, as against 61,500 crores allocated the previous year. To overcome the problem of data unavailability on the unorganised sector and gig economy workers—to which most of these migrants belong—the Finance Minister also announced a new registration database to be created, based on which all welfare policies aimed at these sectors shall henceforth be formulated upon. Few social protection measures such as minimum wages and Employee State Insurance (ESI) have also been extended to those in the unorganised sector. Tax holidays have been given for affordable rental housing projects, which migrant workers generally use for accommodation. Migrant skilling and certification programmes in partnership with countries like Japan and UAE have been announced to explore new migration corridors. All these measures are aimed at empowering migrants and migrant households to be resilient to shocks by providing them with a safety net.

However, several concerns have been raised about the implementation as well as the inadequacy of these measures. Even though there was a significant increase in the number of workdays created as part of MGNREGA when compared to the same period in 2019, studies have shown this has not led to all households that demanded work getting it for their full quota of 100 days, but instead led to a greater number of households getting work albeit for shorter durations. Only five per cent of the households that had sought work were found to have worked their full guaranteed quota (SARCE and MTI Global Practice, 2021). The allocation for MGNREGA in 2021-22 is, in fact, 35 per cent lesser than the actual money that the government spent on the scheme last year, as per the revised estimates. It is not believed to be enough to provide the guaranteed 100-day employment to all the households seeking work. Several experts have also called for increasing wages and workdays, removing the 100-day cap altogether, making it demand-based, and extending the job guarantee scheme to urban areas as well to add a safety net for the completely neglected urban poor (Mander, Ghosh, & Patnaik, 2020).

With respect to food security and PDS, the main concern has been that of exclusion, with more than a hundred million estimated to have been excluded from its ambit because of usage of Census 2011 as a reference document (IndiaSpend, 2020). It is common knowledge that migrants generally have very poor access to PDS in destination states since their ration cards are usually tied to their native place. While the portability of ration cards under the One Nation One Ration scheme can potentially rectify this, there have also been calls—including by the Supreme Court of India—to universalise PDS (Jadhav, 2020).[4]

With the Garib Kalyan Rojgar Abhiyan, there were no additional allocations by the government but just aggregation and diversion of funds from existing schemes under different ministries. In fact, the involvement of multiple departments may have complicated matters and led to several implementational challenges at the ground level, both in providing work as well as timely settlement of payments. Another concern about the scheme was the exclusion from the scheme of many states and districts where there was high demand for work from returnee migrants (Sarma & Sunder, 2020).

Several of the returnee international migrants have also complained that most of the government efforts have been directed at internal migrants while there has been no major policy measure aimed at easing the situation of international migrants (Kuttappan, 2021). Joint skilling programmes with Japan and UAE were already existing programmes, and even these are said to be medium-to-long term measures and do little to address the immediate crisis that many of the international returnee migrants and their households have been facing. While several state governments such as Kerala and Odisha have announced plans for absorbing these returnee migrants into the local labour force, not much has happened on the ground yet to help them earn an alternate source of livelihood.

A Summary of Policy Recommendations

In light of the measures taken by the government and relevant concerns raised about them, several policy recommendations have been proposed by sector experts, activists and civil society organisations at large to help migrant households in particular and low-income households, in general, to cope with COVID-19 induced financial duress. Below we list down a summary of the key recommendations made thus far-

  1. Changes to employment guarantee scheme – A substantial increase in allocation to rural employment guarantee scheme to ensure all households demanding work can get an assured 100 days of work can be a good starting point. Many have written about the several implementational issues vis-à-vis MGNREGA, such as rationing of jobs and payment delays that have led to a general disillusionment about the scheme (Maske 2015) (Krishna 2019). Efforts need to be put to change this and revive trust in the scheme by ensuring guaranteed employment and timely payment of wages. MGNREGA, at least in its initial years, had provided sustenance income and stemmed distress migration from rural to urban areas to a large extent. But since then, MGNREGA wage rates in many states have remained so low that they are not even sufficient for basic sustenance, forcing household members to migrate hundreds of kilometres in search of jobs. The government should accept recommendations made by the Working Group on Wages regarding the fixation of wage rates (Aggarwal and Paikra 2020).[5] A few academic activists have also been batting to increase the number of guaranteed workdays from the existing 100 days or even remove the cap itself and move back towards the original idea of demand-based employment provision (Mander, Ghosh and Patnaik 2020).

  2. Minimise exclusion from PDS – National Food Security Act uses 2011 Census as a reference point for identifying beneficiaries.   This has led to the exclusion of millions of vulnerable households from the scheme, even though there is surplus food production in the country (IndiaSpend 2020). While efforts were made during the peak of the lockdown to provide essential food grains even to those households which were not PDS beneficiaries, this has not translated into a permanent solution. The infrastructure that enables both cash and in-kind benefit transfers are still focused on reducing inclusion errors rather than exclusion errors (Gupta, Kumar and Janani 2020). Even though the plan for nation-wide portability of ration cards is likely to make it easier for migrants and migrant households to avail benefits anywhere, it is often these very households who find it the hardest to produce documents required for procuring such essential documents. However, these constraints should not hamper them from accessing a basic need such as food. This has been the reasoning given by several civil society organisations to ask for a gradual shift towards universalisation of PDS (Jadhav 2020).

  3. Flexibility along with portability – Many of the migrant households are divided households where one or more members live in different places, often hundreds of kilometres away. Therefore, several academics have urged that the ‘One Nation One Ration Card’ scheme—that the government has been working on—be designed not only to allow an entire migrant household to avail PDS away from their place of origin, but also to allow divisibility. Simply put, the migrant members of the household should be allowed to avail their individual shares of PDS at their place of migration while other household members avail their share of PDS back at their place of residence (Roy and Pradhan 2020).

  4. Skilling and re-skilling of returnee migrants – Academics have also advocated treating the COVID-19 shock as an opportunity to opt for a more sustainable, self-reliant and decentralised development strategy by creating meaningful employment opportunities locally—especially in rural areas of the country—and reducing overdependence on remittance from very few destination cities and countries. In this endeavour, skill recognition, certification and training of returnee migrants have to be undertaken to not only be able to decide on the existing local sectors where they can be best absorbed into, but also to identify new sectors and industries that the government can invest in locally, to leverage the skills they have attained. In regions which previously specialised in migration to only one particular destination or profession (for example, migration to Gulf countries in Kerala or migration to Gujarat in Rajasthan), this can be an opportunity to re-skill returnee migrants in a wide range of skills so that there is diversification in the regions they migrate to and occupations they are involved in so that the region as a whole is more resilient to external shocks (Withers, Henderson and Shivakoti 2021).

  5. Consider recommendations of the Working Group on Migration – In one of his addresses to the nation, Prime Minister Narendra Modi had talked of an idea to set up a Migration Commission to look exclusively into the welfare of migrants and migrant households. Such a commission may benefit migrants since they have historically been a neglected lot in the policymaking sphere. However, in following up with this proposal, it will also be prudent for the government to take a look at the comprehensive report prepared by the Working Group on Migration and treat it as a guiding document during any further deliberations on its foundational objectives. Even otherwise, the report has detailed recommendations on providing employment, housing, social protection and other facilities to migrants and migrant households. The importance of all these has been underscored by the COVID-19 crisis (Ministry of Housing and Urban Poverty Alleviation 2017).

Conclusion and Learnings from the Review

COVID-19 has proved to be an unprecedented shock for households across the globe, but even more so for vulnerable migrant households in developing countries such as India. Remittances were more resilient than other sources of income during earlier shocks, but they have been severely affected by the pandemic. The magnitude and wide range of problems that migrants in India suffered from during the early months of the pandemic have reiterated the need for robust and inclusive social protection measures to be put in place (Gupta, Kumar, & Janani, 2020) to ensure that vulnerable households have adequate financial and essential resources to cope with shocks. Without this, they shall be forced to adopt negative coping mechanisms that are harmful to them in the long run.

As Clemens and Ogden (2014) note, both research and policy on migration should focus on understanding (i) how a greater number of households can invest in migration not as a means of survival but as a means of income diversification and upward socio-economic mobility (ii) how migrants can be enabled to remit more to their families (iii) how the financial sector can introduce suitable financial products that cater specifically to the needs of migrant households and (iv) how more families can use migration and remittances as a coping mechanism to recover from shocks (Clemens & Ogden, 2014).

Keeping this as a reference, the main learnings from this review have been that for most of the low-income households in India, migration is a means of survival—especially during the non-agricultural season—rather than a means of upward socio-economic mobility. This can only change if a slew of social-protection measures gives them a basic safety net throughout the year and assures their fundamental well-being even during shocks. Only then can these households view migration as a lucrative investment to diversify their income streams and move upwards economically.

At places where they migrate to, migrants—especially temporary migrants—are subject to the socio-political exclusion and are largely invisibilised in the policy sphere. Thus, they are  left to fend for themselves and settle for jobs which pay less, have no job security and provide no added social benefits. Many migrants resort to many complex and costly informal mechanisms to send back remittances. Therefore, with regards to enabling migrants to remit more, two aspects become important: i) improving the living and working conditions for migrants by providing them better housing facilities, higher-paying jobs that come with job security and social benefits; and ii) improving access to formal financial services by introducing innovative products for this segment that provides smooth and economical means to transfer remittances. These can happen only with a change in overall attitude about migrants among policymakers by treating them as pillars of India’s unorganised sector as well as her cities.

Lastly, more households can be enabled to consider migration by minimising the cost of migration and by providing them with adequate skilling. One of the main barriers to migration is the up-front cost that has to be incurred, and with appropriate subsidies and provision of credit, this can be reduced. Skilling aspirational migrants will ensure they are more likely to get more skilled, high-paying, and secure jobs at their places of migration, enabling them to remit more.

[1] Seasonal migration is a popular strategy among socio-economically backward, low-income households in India, where households send one or more persons to urban centers to work during non-crop seasons. Majority of these workers take up jobs in the informal sector mainly through contracting and sub-contracting processes (Keshri & Bhagat, 2012).

[2] According to NPCI statistics, a total of 181 million transactions worth Rs 10,700 crore was recorded on AePS in March 2020 – 11% lower in value and 18% by way of volumes since February 2020 (

[3] Monthly statistics of AePS transactions can be found here

[4] Universalization of PDS can refer to two things: i) abolishing the distinction between Above Poverty Line and Below Poverty Line households and extending PDS to all households that demand it, and ii) removing strict documentation requirements to avail PDS. In this context, experts are mainly referring to the latter.

[5] Working Group on Wages made three main suggestions regarding MGNREGA wage rates. It recommended that MGNREGA workers should be paid the minimum wage fixed for agricultural labourers, that the central government shall be consulted consult state government and workers representatives in fixing wage rates and that central government pays wage equivalent to price-indexed at the national level and the state governments pay the remainder


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Cite this item


Ponnathpur, R. S. (2021, April). Impact of COVID-19 on Migrant Households and Remittances in India: A Literature Review. Retrieved from Dvara Research Blog.


Ponnathpur, Rakshith S. “Impact of COVID-19 on Migrant Households and Remittances in India: A Literature Review.” April 2021. Dvara Research Blog.


Ponnathpur, Rakshith S. 2021. “Impact of COVID-19 on Migrant Households and Remittances in India: A Literature Review.” Dvara Research Blog. April.

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