Trickle down Effects of Inter State Migration in a Period of High Growth in the Indian Economy

Trickle down effects of Inter State Migration in a period of high growth in the Indian economy. Abstract India has seen many high-growth spells between 1980-2007. At the same time, there is a great deal of concern that these high rates of growth are not trickling down to the poor, or at least not rapidly enough. Some states in India are growing much more rapidly than others exacerbating inequalities. During the relatively lower growth period between 1960-1980, most states grew slowly around the average All India figure, but after 1980 some states grew much more rapidly than others. States like Karnataka, Andhra Pradesh, Tamil Nadu, Maharashtra and Gujarat grew at rates much higher than the national average, while the more populous states such as Bihar and Uttar Pradesh fell well below the national average. They continued to grow at the same rates as during the period 1960-1980. The difference in the rates of growth meant that opportunities for employment arose in the higher growth states and interstate migration therefore increased significantly (by nearly 55%) from the lower growth states to the higher growth states. Potentially, interstate migration could be an important agent of trickling down the benefits of growth from high to low growth states. This paper explores some relationships between variables that directly and indirectly contribute to trickle down at the macro level. Using growth data from the Indian Census on migration as well as other secondary sources of informal asset building this paper examines the effects of outmigration on asset building and remittances into states of origin. It also examines the effects of outmigration on the convergence of inequality between states. Further through case studies based on interviews with migrants across the major destination states, the chapter analyses the major variables which determine asset growth in the states of origin as well as consumption in the destination states. It looks at the role of variables such as education and gender in determining the effects of outmigration. At the same time, migration is leading to a number of problems such as overcrowding, stretched urban infrastructure, poor health and conditions of living. The paper tries to outline some solutions to these problems.