Exodus of Migrant Labour is a massive blow to Economy

-K.Annamalai, MD, Annamalai Capital Services Private Limited

Without any exception, COVID-19 has battered the economy of all nations. In India, with relaxations coming at the end of lockdown 4.0, the economy is expected to get slightly animated. Regarding this, The Covai Mail spoke with K.Annamalai, MD, Annamalai Capital Services Private Limited, Coimbatore to know about the risks that are imminent and solutions that could be sought to help the nation’s economy.

                                                                                     Economy & Health

“We have two types of risks to face in the coming days – Health and Economy. Nobody can predict the health risks easily. For almost 2 months most of us were at home and isolated from public interaction. But after the relaxation of lockdown, there is widespread movement of people.

We may not know who would be carriers now. So by the end of this month, the real impact of health risk will be revealed.  If the health risk is not effectively managed, then that would certainly affect the economy more. Economic risk is going to be heavy for 6 to 8 months. The fear is lingering among people and until the outbreak is contained, the impact will be there on economy & health”.

                                                                                Purchase Behavior

“If the situation is not brought under control, people’s income will come down. This will set a new trend in the market. People would spend only for essentials. So when no non-essential product is purchased, it will create a cyclic impact in several industries.

With festivals losing its color due to this pandemic, the usual quantity of purchasing new clothes by an individual and jewels for instances wouldn’t be the same. Textile & Jewel industry also stands to get affected due to COVID-19.

Real Estates, Hotel, Resorts,& Hospitality services, Automobiles, Finance & Non-Banking Financial Companies Steel Industry,  Airlines & Airports, Entertainment and lot more in India will have a very hard time”.


                                                                 Handling of Migrant Labours

“The Government should have handled the Migrant Labour scenario even better. They did not anticipate that the scale of problem would be this big. The major issue with migrated labours started in Mumbai and Delhi. Employers of migrant labours in the Southern part of India fed them and provided accommodation.

Majority of the laborers in Delhi are from Bihar, UP, Orissa. The government should have informed all the employers in Delhi not to send those labours to their hometown for 2 months. The Government should’ve come forward to give employers subsidiary for food and support for accommodation.

Some newspapers & media projected a few cases of the migrants’ return to their hometowns in a sensational way and that triggered many migrant workers in the calmer regions to feel paranoid. This is also a triggering factor for the mass movement of migrant workers.  Southern Industries are the ones to face the burden of migrant labour’s exodus. There is no clarity or an idea on when they will return to work. It will have a great impact on the economy”.

                                                          Unearthing unaccounted cash stash

“Government should give a better financial support to better performing companies. Based on the interest payment track record of a company, certain relaxations on interest rates should be given for 2 or 3 months.

Bringing black money that is stashed in foreign banks is not going to be that easy as it sounds. But unaccounted money hoarded inside India has possibilities to be unearthed. Taking into consideration about this hardship the entire nation is facing, if the Government announces moratorium to hoarders that their identity will be preserved and they can keep a huge chunk of their money, for instance 60% of the money if they pay a sizeable portion (around 40%) to Government that will help in a better way.

There are some religious Trusts (in all religions) in our country that have huge assets. These unutilized assets can be used as a collateral to raise money by the Government.