NRC to exacerbate labour woes

Muslims are a significant part of India's labour force. Of the 405 million people employed in India, an estimated 39 million are muslims. Recent actions and announcements by India's central government have led to a palpable unease in this small but significant part of Indian labour. Separately, select industrialists have expressed fear of the consequences of criticising the government. If capitalists and labour are both besieged by fear, revving up a slowing economy becomes much more than a cyclical or a structural problem.

Fear among muslims is not the only problem that labour faces because of the government's recent actions. Assam, several northeastern states and also Bengal are in turmoil because of the Citizenship Amendment Act. Campus protests have spread all over the country.

The process of creating a National Register of Citizens would be highly disruptive for labour markets in particular and for the economy as a whole. Would the perceived benefits arising from such an exercise be worth the cost that the economy may pay for its realisation?

A little more than a hundred million muslims are in the working age bracket in India, i.e. they are of 15 years of age or more. Of these, 42.3 million actually participate in the labour markets by either working or looking for work.

If approximately ten per cent of the employed population has to worry, over a prolonged period, about proving its citizenship, productivity in the economy as a whole is bound to take a hit. It may not be unrealistic to imagine that a significant portion of labour (not just muslims) would have to crisscross the country to put together the documentation required to prove citizenship. The impact of this on productivity and growth is unlikely to be small.

The adverse impact upon the overall welfare of muslim households in particular and poorer households in general could be larger and far more difficult to measure. The reduction in degrees of freedom and the fears of real and imagined miseries arising out of questions regarding citizenship of the extended family would be difficult to measure.

Muslim women participate less in the labour markets compared to women of other faiths. Of the 39 million working muslims in India, 36.5 million are men and only 2.5 million are women. It may be safe to conjecture from these statistics that most muslim households have just one working member, who is mostly a male. If such a member has to run from pillar to post to prepare documents to prove his and his family's citizenship then it is likely that such a household would suffer significant financial losses besides significant mental stress.

The impact on poor households would be more devastating than in households who would have adequate savings to overcome the transaction costs of complying with the new laws.

Such disruptions could lead to job losses which in turn could force muslims to seek employment only in sympathetic muslim-owned enterprises. This could lead to a further ghettoisation of sorts of the muslims where cosmopolitan societies and national integration is far more desirable. Such losses in freedoms are far more devastating than mere financial losses.

NRC may or may not be Orwellian but it does exacerbate India's labour market problems. Labour participation rate can fall from its already low levels.

Assam is agitating over a different problem arising out of the Citizenship Amendment Act. It worries that immigrants would crowd out the language and culture of Assam. At stake in Assam, in a purely economic sense, is an employed workforce of about 12 million. This includes all -- the Ahom speaking Assamese who are trying to protect their identity, and the rest in Assam.

Such worries pervade most north eastern states. Assam has agitated over this issue for decades. But, other states are also hankering for jobs for locals. Almost all state assembly elections in recent years including Rajasthan, Madhya Pradesh, Telangana, Andhra Pradesh, Haryana and Maharashtra have seen political parties promising jobs for locals if voted to power. Some have even followed up on the promises.

These agitations and these sectarian politics are outcomes of an economy that is not growing adequately to provide good jobs to its citizens.

The solution is faster job-generating economic growth. It is not sectarian politics and it is not agitations against immigrants. When there are sufficient jobs even Indian states welcome migrants. Two rich states of India -- Punjab and Kerala import labour from within India in large numbers. They do not promise jobs for locals. And, they export their language, culture and cuisine successfully.

The Ahom language and its associated rich culture and also Telugu or Marathi or Marwari are best protected by spreading these among more rather than restricting it to the locals. Making the learning of local language and appreciation/adoption of the local culture a necessary condition for letting in immigrants is better than keeping immigrants away. 

India's rich diversity in culture, language, cuisine and religion acquired and honed over centuries is best celebrated by spreading it, sharing it and appreciating it without having to prove that we belong to it.