Ruralization Surge: The Decline in Migrant Workforce Shapes India's Economic Landscape

The decline in migrant workers is leading to ruralization in India, shifting workforce demographics. Systematix Institutional Equities reports rising ruralization, influencing food demand and inflation. With fewer urban migrants, economic growth potential declines, prompting government concerns over revenue spending. Addressing these trends calls for balanced rural and urban policy interventions.

In a significant shift impacting India's socio-economic fabric, the IT firm Systematix Institutional Equities has raised alarms about a marked decline in rural-to-urban migration. This trend, highlighted in their recent report, underscores the growing phenomenon of ruralization as a larger share of the population and workforce remains anchored in rural locales.

The repercussions of this demographic transition are evident. The rural workforce now relies more heavily on agriculture, with 46.1% of the labor force employed in the sector in 2023-24, up from 42.5% in 2017-18. This reliance exacerbates issues like disguised unemployment and stagnating rural wages, particularly for women whose real wages have declined consistently by 2.3% annually over the past five years.

Contrary to claims that improved rural infrastructure is driving migration declines, historical data suggests otherwise. Although rural electrification and housing, under schemes like the PM Awas Yojana-Gramin, have advanced, their growth has significantly decelerated in recent years. This declining migration rate poses challenges to India's economic landscape by decreasing urbanization, traditionally a driver of productivity and growth.

(With inputs from agencies.)