Benefits of internal migration far outweigh its negative impact: SBI

Interstate migration of labour is not a zero sum game, it observes.

NEW DELHI | Updated: 18 August, 2023 5:38 pm IST

Interstate migration has been a big political issue across different states. (File image)

NEW DELHI: Interstate migration should not be seen as gain to one state at the cost of another but it should be viewed as an example of cooperative federalism, observes State Bank of India (SBI) in a research paper.

The SBI research also said that migrant workers contributed 0.5-2.5 per cent of gross state domestic product (GSDP) in net migration positive states like Delhi, Tamil Nadu, Kerala, Gujarat, Karnataka and Maharashtra. Their cumulative contribution has been assessed at around 7.8 per cent or ₹15 lakh crore of GSDP.

Much like the gross domestic product (GDP) for nations, the GSDP serves as a pivotal parameter to gauge a state’s fiscal well-being.

List of 6 states where most ITRs were filed.

Uttar Pradesh, Bihar, Rajasthan, Madhya Pradesh, Odisha, Andhra Pradesh, and West Bengal have registered net negative migration, meaning outflow of the working force outnumbered the inflow.

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“Interestingly, the entire increase in the state’s GSDP in 6 net positive migration states (i.e. 7.8% of GSDP) is almost equal to the decline in GSDP in 8 net negative migration states (7.7% of GSDP),” the report reads.

It also said that the positives of internal migration far outweighs its negative impact on the GSDP of the states clocking negative migration. “While the migratory pattern needs to be studied with latest data to reinforce the findings, we believe the positives of the migration through collaborative pitching of the idea of federalism, and redistribution of efficient skilling far outweighs the loss in select states’ GSDP (plus, the remittance remuneration!).”

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Among the top six states where most income tax returns (ITRs) have been filed this year, Maharashtra, Tamil Nadu, and Gujarat exhibited net positive migration while UP, Rajasthan and West Bengal recorded net negative migration.

“The net negative migration from these three states indicates that their share of 22 per cent in total ITR filed does not present a true/correct picture of state of affairs as the place of work of people migrating from these states are different,” it remarked.