Impact of COVID-19 curbs, reverse migration: Remittances fall up to 10% in 2 weeks

Localised lockdowns in the industrial hubs of Maharashtra and apprehensions about similar curbs in Delhi-NCR have started affecting the casual workforce, with remittances to the less-affluent hinterland from these urban pockets already dropping up to 10% in the past two weeks.

Major remittance companies said the rapid spread of Covid in urban areas and concerns over a total lockdown, as was the case last March, have already prompted a section of the migrant workforce to leave the big cities. However, infrastructure and manufacturing projects, which have put in place an enabling ecosystem for the migrant staff at worksites, could mitigate the impact of a reverse migration.

Migrants Fleeing Urban Centres

“We are already seeing a fall in our remittance business and Maharashtra has been the worst affected, with a 10% fall,” said Rishi Gupta, MD, Fino Payments Bank. “Our field officers are indicating that some amount of reverse migration could further impact these numbers.”

Fino Payments processes about ₹3,000 crore of domestic remittances every month.

Maharashtra is one of the biggest contributors, with a 15-20% share.

“For us, the most affected areas have been Mumbai and New Delhi. Given the scare of a complete lockdown, we have seen that the migrant workforce is returning to villages,” said Rajeev Lal, President, Pay Point India. “But we are hoping that a complete lockdown doesn’t extend beyond 15 days.”

Several migrant workers are fleeing urban centres as Covid cases rise. They are also concerned that a complete lockdown will leave them without jobs – and with rents to pay.

There are predominantly six major corridors within India from where a large chunk of the remittances originates: Delhi, Mumbai, and Gujarat are among them. On the other hand, the states of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh are among the biggest receivers of these flows.

“The remittance business was just recovering from the impact of the lockdown and labour migration last year. Our fear is that if localised lockdowns extend beyond a week or a fortnight, those would impact the business negatively,” said Abhinav Sinha, co-founder, Eko India. “Night curfews in the biggest remittance corridors have brought a complete halt to payments after 8 pm, and that is an opportunity loss for us.”

Eko processes remittance payments of more than ₹2,500 crore every month.

With India reporting over160,000 infections on Monday, several states have imposed restriction.

Maharashtra, which has emerged as the epicentre of the disease, has announced most stringent shutdowns through April 30. The Delhi government has also imposed a night curfew.