Description

Two states from where migration is relatively high and remittances a major source of income are Kerala and Bihar. Interestingly, the two stand at the opposite ends of the Indian development landscape

Migration in search of work ensures that cities maintain their high growth rates. When people move out of their homes for work, their families often stay behind, living on remittances sent by their working relatives.

Two states from where migration is relatively high and remittances a major source of income are Kerala and Bihar. Interestingly, the two stand at the opposite ends of the Indian development landscape. They have the highest and lowest literacy rates in the country, 90.9% and 47%, respectively, according to 2001 figures.

The disparity in such a basic indicator as literacy level translates into a significant difference in the skill set of the labour force that goes out and sends back money.



Kerala, with its educated workforce and high development indicators, has traditionally sent its labour either abroad or to other states in higher skilled jobs. Bihar, on the other hand, has labour moving to other states in low-skilled jobs, primarily as farm and construction workers.

In fact, looking at the districts where at least 30% of households receive income from remittances, two insights emerge. The first is that migration can be from both high-income and low-income districts, and that there is a difference in the reasons behind migration.

Himachal Pradesh and Kerala both figure in this list. Both states have achieved a lot on the developmental front such as providing access to education, health and raising connectivity of villages through a good network of roads.

The states differ highly in topography, density of population and type of workforce. Hamirpur in Himachal Pradesh, for instance, has many working in the defence services or working in the plains. There is also a considerable seasonal migration from the state during the winters as farm labourers move out to work in Punjab and Haryana.

Districts from low-income states such as Uttar Pradesh and Bihar also rank in this list, where households in the throes of poverty send out their men to bring back enough for sustenance in the villages.

Since the nature of remittances is so different for low-income and high-income districts, integration with the formal financial sector also varies. Districts from Kerala and Himachal Pradesh have a higher dependence on institutional sources of credit, compared with those from Uttar Pradesh and Bihar. The latter have low penetration of banking services.