Skip to main content

Financial inclusion eludes large sections of backward caste migrants in Gujarat

By Rajiv Shah 
A recent study, “Remittance Needs and Opportunities in India”, sponsored by GIZ, or the German Society for International Cooperation, and the National Bank for Agriculture and Rural Development (NABARD), and carried out by Dr YSP Thorat and Dr Howard Jones, has found that formal financial institutions, including nationalized banks, may have taken take firms roots in Gujarat, but when it comes to serving the poor migrants seeking to transfer their remittances, these have failed to deliver. Estimating that “average annual remittance amount is about Rs 20,000”, the study says, even today, “informal remittance channels are pervasive and attractive due to the multiple functions they can serve.” In fact, on-the-spot survey of Rajasthani migrants in Gujarat suggests around 90% of the respondents “carry cash themselves or send it through others.”
Pointing towards reasons, the study says, “Most migrants do not have bank account at the destination point where they are working. The migrants value the security and speed of money transfers highest. They see these attributes best met by banks, but they continue to mainly use informal transfer methods. This may be due to factors such as inconveniences related to banking services (e.g., travelling and waiting time), know-your-customer principles and other banking requirements, and a low degree of financial literacy and capability.”
While there are researches which suggest that measures for improving financial literacy and capabilities as well as consumer protection are central to successful financial inclusion strategies, study finds that “many migrant workers do not have adequate information about formal financial services, and many of those who have accounts with banks do not use them effectively.” Thus, “while 35% of the respondents have a life insurance, many of them do not understand the product and regard it as a savings rather than insurance instrument. While commercial banks have the necessary technical infrastructure, they lack convenient delivery channels.” 
The study adds, “Regional rural banks and cooperatives usually do not meet the technical requirements, while they have the advantage of proximity and large service networks reaching out to rural households. The India Post has the largest office network, but its services take a relatively long time and are sometimes not perceived as customer-friendly. Most service providers have not made remittances a business proposition, but there is considerable potential for remittances to be linked to other financial services. Migrants need a secure place to deposit and remit small amounts of money. Many of them live at their work sites and get paid on a daily basis, and remittance recipients wish to receive relatively small amounts frequently.”
Pointing towards why the topic of domestic migration and remittances is particularly pertinent to India, the report says, India has “more domestic migrants than the total population of the largest western European country.” Yet, it regrets, these migrants have failed to get necessary attention because they “are frequently from Scheduled Caste (SC) and Scheduled Tribe (ST) populations, which are historically disadvantaged communities in the country”. While SC and ST go to work in brick-kilns, unskilled construction, loading and unloading of trucks, and agriculture, where living and working conditions leave much to be desired, other backward castes are also “heavily represented”, typically working in “small industrial units, in security services, as drivers, in the hospitality industry, and in plumbing and carpentry.”
Estimating that there are around 100 million in India, the report says, “Micro-studies also emphasize the importance of remittances in rural household budgets. For example, in Udaipur district in Rajasthan, an area with large numbers of tribal migrants, remittances accounted for between 42-48% of total annual household earnings. A study of six villages, across three diverse regions in Madhya Pradesh, showed that remittances accounted for 30% of total household earnings. In Jhabua district, southern Madhya Pradesh, households in the three poorest quintiles were shown to earn between 65-70% of wage income from seasonal migration. Data collected under the Western India Rainfed Farming Project showed that in the tribal areas of Madhya Pradesh, even higher proportions of household cash income were coming from migration.”
The study adds, “The southern part of Madhya Pradesh is predominantly tribal, with high levels of poverty and out-migration. The poorest migrate for nearby low-return farm work, the slightly better connected/experienced migrate to Maharashtra and Gujarat. In general, poor migrants from this region do not send remittances, rather they hand-carry money on the way home or send money through friends and relatives.”
Things are no different with regard to large-scale migration from Ganjam and Puri districts to Surat and other places in Gujarat. “Many of the migrants work in the textile, and diamond cutting and polishing industries”, the study says, adding, “A recent informal estimate suggests there are around 900,000 Oriya migrant workers in Surat, of whom 600,000 are from Ganjam district alone. One NGO estimates that Oriya migrants remitted as much as Rs 2,000 crore in 2007. A 2009 study of Oriya migrants in Surat shows a monthly average of Rs 1,427 being remitted, with wage earners remitting relatively less and self-employed or private sector employers remitting up to Rs 1,655 monthly. The same study notes how amounts remitted also depend on the number of dependents, with single migrants remitting nearly half their earnings. The use of banks to remit money has fallen, while the use of private operators has expanded, and many remitted through family members.”
Referring to its on-the-spot surveys, the study says, most migrants (76%) belonged to the group of 20 to 39 years with high proportions of the migrant respondents being married – 74% of the Rajasthan migrants in Gujarat. Education levels were particularly low for these migrants – nearly 40% of the respondents had no education, and a further 17% noted that they had attended school just up to class three. “A high proportion of Gujarat-Rajasthan migrants (45%) were living without their family members at their destination points… This was probably due to the relative proximity of their home villages and to the type of work undertaken. Even so, 21% of these migrants were living with their wife/husband, and 33% were living with varying combinations of other family members, many of whom were also working at the destination points”, the study adds.
The study says, “The Gujarat-Rajasthan study illustrates how the small land areas owned/cultivated by the origin point families of the migrants give an initial indication of the imperative to migrate. Of those migrants able to provide a measure of land area (some stated this in terms of the seed needed to sow the land), the average was 1.44 hectare with a range of 0.16 to four hectare. Moreover, most of this land is unirrigated, with poor quality soils, and often jointly owned with siblings, thereby effectively reducing the per household land areas even further.”
As to the type of work they do, “in Gujarat, the majority (48%) of the tribal migrants from Rajasthan were engaged in construction work, while 19%, 14%, 12% and 5% of these migrants worked in other services (e.g. cleaners), hotels and restaurants, transport (drivers) and trade (shop assistant) respectively. Just one of the Rajasthan migrants was employed in a factory. In Himatnagar, the factory owners specifically mentioned that they preferred hiring labour from more distant parts of India, as, compared to the Dungarpur tribal migrants, they were less likely to be here one day and gone tomorrow. Only six (14%) of the 42 tribal migrants were self-employed: two running tea stalls, one running an ice-cream stall and one a pan shop; two were drivers.”
In fact, the study says, “The migration histories for the Rajasthan migrants in Gujarat showed that there were opportunities for mobility and advancement, most notably in the construction sector, for tribal migrants traditionally regarded as occupying the lowest rungs on the migration ladder. For example, some migrants started their work as labourers, progressed to undertaking more skilled building work, and then became labour contractors. Two migrants started work as tea stall helpers and then set up their own businesses. However difficult it may be, migration initiated as a coping mechanism does not always preclude mobility and advancement.”
The study further says, “When giving reasons for their migration, the Rajasthan migrants in Gujarat emphasized negative aspects of life and work in the village e.g. little income and work , little and poor quality agricultural land, the need to finance major events (e.g. marriage), and calamitous events in the family (e.g. deaths of both parents). They also emphasised what they thought were the more positive aspects of life and work at the destination points e.g. the ability to obtain regular work, the ability to earn cash, etc. Some of the Rajasthan migrants in Gujarat reported unexpected/unplanned setbacks like ill-health and accidents (especially on building sites), which reduced their ability to save and remit.”
A striking example of financial exclusion of Rajasthan migrants into Gujarat was that just two migrants (5%) had active bank accounts at their destination points. “Another four migrants (10%) held bank accounts which were no longer used. The great majority (86%) of this migrant group held no bank accounts where they were working. At the destination points, the reasons given for this included having little money to deposit, the paper work and documentation required to open an account, and the fact that they were remitting any spare money home, and the main reason given for having no account in the village was lack of money. A number of the migrants without any schooling noted that they did not want to ask others for help in filling out forms.”
The study says, “The Rajasthan migrants in Gujarat indicated a rather wider set of uses, some of which had important productive elements, significant when we consider that remittances for this type of migrant stream are often associated purely with consumption activities. Thus, although the largest number of migrants (23) reported that the main use of remittances was for household expenses and food (15), a number of migrants reported remittances back home being used for farming activities (13), medicine (6), education (5) and paying back informal lenders (4). Moreover, all these migrants reported that it was important/very important to send money home and many felt pride and happiness when they were able to do so”.
Yet, “only two (5%) of the Rajasthan migrants remitting money home from Gujarat had used a bank account to do this; they were mostly carrying cash themselves or using others (e.g. fellow-villagers, family members) to do this for them. In a few cases, some of the migrants used a bus company employee (driver or conductor) to take money back to their home district. One relatively well-to-do migrant, if his parents needed money urgently, would telephone moneylenders in his village, and he would pay them later for providing such funds.”

Comments

TRENDING

Abrogation of Art 370: Increasing alienation, relentless repression, simmering conflict

One year after the abrogation by the Central Government of Art. 370 in Kashmir, what is the situation in the Valley. Have the promises of peace, normalcy and development been realised? What is the current status in the Valley? Here is a detailed note by the People’s Union for Civil Liberties , “Jammu & Kashmir: One Year after Abrogation of Art. 370: Increasing Alienation, Relentless Repression, Simmering Conflict”:

Repeated failure to appoint Chief, other commissioners undermining RTI Act

By Anjali Bhardwaj, Amrita Johri* The post of the Chief Information Commissioner of the Central Information Commission (CIC) has fallen vacant with the retirement of Bimal Julka with effect from August 27, 2020. This is the fifth time in the last six years that the Commission has been rendered headless. Four posts of information commissioners are also vacant in the CIC. Currently more than 35,000 appeals and complaints are pending in the commission resulting in citizens having to wait for months, even years for their cases to be disposed, thereby frustrating peoples’ right to know. Since May 2014, not a single commissioner of the CIC has been appointed without citizens having to approach courts. The failure of the government to make timely appointments of commissioners is a flagrant violation of the directions of the Supreme Court. In its February 2019 judgment, the apex court had categorically stated that if the CIC does not have a Chief Information Commissioner or required strength

Ultimate champion in crisis, arguably best ever skipper: Created history in Aussie cricket

By Harsh Thakor  In the history of cricket few cricketers knit and propelled a cricket team or had such profound influence on the game as Ian Chappell. Ian Chappell was responsible for converting a bunch of talented individuals into a world beating side, giving a dramatic turn to Australian cricket. Few cricketers ever led such a renaissance.

BSF's unconstitutional, whimsical order violates life, livelihood of Dalits, minorities

Kirity Roy, Secretary, Banglar Manabadhikar Suraksha Mancha (MASUM), writes to the Chairman, National Human Rights Commission: *** I want to attract your attention towards the illegitimate restrictions on the life and livelihood of the villagers of Paschim Sahebganj village under Dinhata - II Block and Sahebganj police station in Cooch Behar district of West Bengal by the Border Security Force personnel attached with Dharala Border Out Post under 138 Battalion BSF. The population of Paschim Sahebganj village is around 1480, where almost 75 percent of the villagers belong from Hindu Scheduled Caste (Dalit) and 25 percent from minority Muslim backgrounds.The main occupation of the villagers is agriculture. About 260 acres of cultivable land in the village that belongs to the villagers is located outside the border fencing, which is heavily guarded by the Border Security Force (BSF). The BSF regulates the ingress and egress of the villagers to their fields through the fencing gates that a

Largest democracy in world has become weakest at hands of fascist Hindutva forces

Note on “The Nazification of India”, a report released By Justice For All: *** This report, the Nazification of India, compares how Hindutva ideology not only is inspired by Nazis and Fascists of Europe, but their treatment of the Muslim minority closely follows developments that resulted in pushing Jews to the gas chambers. Situation is indeed quite alarming. The report says that the largest democracy in the world has become the weakest at the hands of the fascist Hindutva ideology. India today is ruled not just by a political party the Bharatiya Janata Party (BJP), but its mother organization the Rashtriya Swayamsevak Sangh (RSS). Because the BJP’s government policies are linked to extra-legal enforcement by RSS paramilitary street power, this report has coined the term “The BJP-RSS regime” to reflect their intrinsic links and collaborative relationship. The Nazification of India report marks the anniversary of the Gujarat pogroms of 2002 against Muslims which propelled the BJP-RSS

Varanasi social worker who has devoted her life for the ultra-poor and the marginalized

Passion Vista and its partners profile Founder and Managing Trustee Shruti Nagvanshi as  someone whom women leaders look up to: *** Shruti Nagvanshi, a social worker and human rights activist based in Varanasi, Uttar Pradesh, has devoted her life to reaching out to the ultra-poor and marginalized communities in India. Born in Dashashwmedh, Varanasi on 2 January 1974, she married Dr Lenin Raghuvanshi on 22 February 1992 and has a son, Kabeer Karunik, a Business management Graduate who is also a national level snooker player.

An approach to lake/pond restoration by Ramveer Tanvar, Pond Man of India

By Monami Bhattacharya*, Mansee Bal Bhargava**  Lakes/ ponds are often referred to as an elixir of life, a living ecosystem that adds incremental value to the larger biota. Across the tropical landscape of the country lakes/ ponds are a common sight. Lakes/ponds have always shaped the life and livelihood of those dwelling in and around it. The dependence of the local population on these natural resources of water is noticeable since time immemorial. However, they are fading fast in both rural and urbanscapes from the popular parlance with the advance of humanity. It has been a popular notion to value land more than the waterscape and hence these nurturers of life are under stress in several areas. In many instances, these once beautiful waterscapes referred as the ‘Eye of the Earth’ are mostly now only dilapidated garbage dump yards emitting foul smell with no sign of a healthy ecosystem.

Urban crisis: Impact of erosion of democratic framework on Indian cities

By IMPRI Team  On 13th February, 2023, IMPRI Impact and Policy Research Institute, New Delhi in collaboration with ActionAid Association India arranged a book launch followed by lecture series under the title “India’s G20 Presidency & the Urban Agenda for the Developing Countries”. The event was held in Indian International Centre (IIC) Annex, New Delhi. The event began with the book inauguration session, under the honorary presence of Mr Sitaram Yechury, former Rajya Sabha member and General Secretary, CPI (M), accompanied by Mr Sandeep Chachra, executive director, ActionAid Association India. Session 1 | Book Launch: ‘Cities in Transition’ by Mr Tikender Singh Panwar The book launched was “Cities in Transition”, written by Mr Tikender Singh Panwar, former Deputy Mayor, Shimla and a Senior Fellow at IMPRI. Beginning with brief remarks on his book, Mr Panwar outlined the basic subject matter and the purpose behind writing the book, which he considers as a by-product of his experien

Panchayat funds defrauded: Roads without potholes a fundamental right but not here

Kirity Roy, Secretary Banglar Manabadhikar Suraksha Mancha (MASUM), and National Convenor (PACTI) Programme Against Custodial Torture & Impunity, writes to the chairman, National Human Rights Commission: *** Through this complaint, I want to draw your attention to the plight of the villagers of Nawdapara in the District of North 24 Parganas. The village is situated under the Bagdah Police Station, Bagdah Block and Mama Bhagina Post Office respectively. Nawdapara is a Muslim minority populated village. Indo Bangladesh Border Road (IBBR) passes through the middle of the village. There is a naka checking post of the BSF inside the village and BSF associated with Mama Bhagina Border Out Post, 68 Battalion, ‘B’ Company guard 24 hours in that check post. People have lived in this village since the independence of India. The market is about three to four kilometres away from Nawdapara village. One primary school is situated within the village but the high school is about five to six kilo

Riverscapes: mythology, iconography, folklore and origins amidst rising water problems

By Proshakha Maitra*, Mansee Bal Bhargava** Rivers are not just bodies of water and resources flowing across a landscape, but they are flows supporting a variety of cultural beliefs, values, and ways of life by linking people, places, and other forms of life (Anderson, et al., 2019). Since ancient times, rivers have been the ‘cradle of civilizations’ where the major civilizations of the world developed along the banks of the rivers. Even the earliest known urban culture of the Indian subcontinent, the Harappan (Indus Valley) Civilization developed along the banks of the Indus River that flows from the mountains of Tibet through India and Pakistan. Every river has its tales of mythology, iconography, folklore and origins which are worth knowing, especially in the current times when they are under severe distress of development. Since knowing these intangible aspects of the tangible resource/heritage is crucial to instigate emotional and spiritual connect which may in turn make people an