Migrants aren’t streaming into cities, and what this means for urban India

If Indian cities have become successful in turning away migrants, we should see that as the first sign of their demise, not their dynamism.

“Stop migration into cities.” These were the words of finance minister Nirmala Sitharaman during last week’s budget speech, even as she — confusingly — called urbanization an “opportunity rather than a challenge.”

A call to stop rural-urban migration should alarm, but not surprise us. The FM’s statement is grounded in three powerful myths that have persisted for decades in India and continue to cloud the vision of our policymakers and politicians. These myths must be debunked.

Myth 1: Rural migrants are flooding into Indian cities

According to the government’s own data, surprisingly few rural Indians are relocating to cities. Between 2001 and 2011, net rural-urban migration stood at about 20 million people. In China, the only country in the world of comparable size, migration alone swelled the urban population by 177 million in the first decade of the century. In fact, the rate of migration into cities in India has remained essentially stagnant since the 1970s — even after liberalisation unleashed a wave of economic growth.

Contrary to the popular imagination of migrants flooding into megacities like Mumbai and Delhi, India’s urbanisation is increasingly driven by the conversion of villages into towns through natural population growth and local shifts in employment — i.e. the creation of census towns — and the majority of these settlements are not on the fringes of the country’s big cities.

Myth 2: Migration is bad for cities and the country as a whole

Migration is the hallmark of a dynamic economy where people have the resources to move to the places where their skills will be best utilised. Because it facilitates labour market matching, migration is better for both people — who end up with higher wages — and businesses — who end up with more productive workers. Migration enables specialisation, which in turn fuels trade and economic development.

Perhaps what the finance minister meant was: No one should be forced to migrate due to destitution or extreme poverty. We would agree. At the same time, to suggest migration is a social ill that ought to be “stopped” misses the forest for the trees. Even China, with its draconian limits on people’s movement, has not succeeded in controlling migration, because in a dynamic economy the benefits of migration are too great for people to ignore.

Myth 3: Rural development will stop migration

For many decades, governments in developing countries have presumed that investing in villages will keep people from leaving them. They have been proven wrong. Development and migration are complements, not substitutes. As it turns out, when people have better health outcomes, more education, and higher incomes, their capacity to migrate increases. For this reason, rural development programmes may decrease distress migration in the short-run — with fewer people moving to escape extreme poverty — but they will increase migration in the long-run — as people obtain the resources, skills and capabilities necessary to compete in urban labour markets. This is why high-income rural Indians are more likely than their low-income counterparts to migrate permanently to cities.

We should absolutely invest in rural India, and the government’s commitment to this is laudable. But even if we succeed in boosting agricultural productivity and empowering rural youth, we will continue to confront the dire need for better governance in India’s cities — perhaps even more so.

So, where does this myth-busting leave us?

We would be wise to examine why rural-urban migration in India is so low. In a recent JustJobs Network report, Partha Mukhopadhyay and Mukta Naik provide a compelling explanation: Even though rural-urban wage differentials are high on average, casual workers in Indian cities do not earn much more than their rural counterparts. Rural migrants show up in cities only to find themselves earning little, enduring poor-quality living conditions, and getting no support from the state while they search for regular employment that would pay more. Eventually they return home or get locked into a cycle of seasonal migration.

If cities have become successful in turning away migrants, we should see that as the first sign of their demise, not their dynamism.

The situation points to multiple issues that we must address if we expect urbanisation to generate economic development and good jobs: Low productivity in urban economies, hostile living conditions for the poor, and limited access to basic social entitlements among migrants. Sensible, evidence-based solutions have been proposed to tackle these challenges: Empowering municipal governments, jumpstarting investment in rental housing, ensuring portable social protections. Some of these the government seems to be taking seriously, which is a sign of progress.

But the first step is for politicians and policymakers to acknowledge, once and for all, that migration propels the things that make economies successful—labour market matching, specialisation, innovation.

Migrants are part of the solution, not the problem.

Gregory Randolph is executive vice-president of the JustJobs Network and a doctoral student in urban planning at the University of Southern California (USC). Sahil Gandhi is visiting fellow at Brookings India and post-doctoral Scholar at USC.