Six months and counting: Small businesses feel the pinch as workers refuse to return

Asmit Trivedi, who runs a textile business in Surat, had 24 workers in his manufacturing unit before the Coronavirus lockdown. Trivedi had, in fact, hired six more workers ahead of the 2019 general elections and decided to retain them as business was booming. Cut to September, his manufacturing unit is running at 25 percent capacity with 15 workers having headed home.

“I had seven workers from Bihar, four from West Bengal and the rest from Uttar Pradesh. They moved back home soon after the lockdown. Even as restrictions ease, they are not ready to come back and business is suffering,” he said.

While the Covid-19 lockdown has been eased across the country in a bid to boost manufacturing activity and small businesses, reverse migration has hit the latter hard. Though workers have started to return, about 20-30 percent of these employees still don’t want to return due to virus fears and worries that there may be no work for them.

Levers of the economy

The Ministry of Employment and Labour said in a reply to a Lok Sabha question that 10.46 million migrant workers have returned to their home towns. Here, Uttar Pradesh topped the list with 3.25 million workers returning, followed by Bihar with 1.5 million and West Bengal, with 1.38 million.

India has close to 130 million migrant workers, meaning these individuals move away from their homes in search of employment.

When the lockdown began on March 25, cities such as Delhi, Mumbai and Bengaluru struggled for even for basics amid the worker exodus. Mumbai, for instance, started running short of bread since bakeries were finding it tough to produce amid the worker shortage.

Jayesh Dastidar belongs to Nadia district in West Bengal and worked as a roti (flatbread) maker in the kitchen of a Mumbai restaurant. He told Moneycontrol over a telephonic conversation that he hasn’t returned because he feels his employer may not need his services. It is a reality that not everyone wants to order food from outside due to virus fears. The owner called me several times saying business is getting affected because three of us have not yet returned. But what is the guarantee that they won’t fire me if I go back? How will I be able to live in Mumbai without a job,” asked Dastidar.

He has applied with a staffing firm for temporary jobs in and around his home-town but hasn’t had any luck in finding a relevant role.

No immediate change expected

Human resources consultants are of the view that the labour shortage could continue for longer. RP Yadav, CMD of Genius Consultants, confirmed that there are some migrant workers who have decided to stay back. “About 5-25 percent of workers are still in their home towns, depending on the client. The government has also offered some packages to these workers who have gone back home,” he added.

It is not just textile units, food stores or restaurants that are being impacted. Production units of consumer goods such as bags, shoes and cosmetics have also been hit.

Ismail Akhtar, who produces leather shoes at his workshop in Dharavi, Mumbai, told Moneycontrol that seven people in his 10-member team are not yet back. “My workers used to typically sleep in the workshop. But that is no longer permitted due to social distancing norms. Sanitisation costs are also high and workers find it unsafe to live in these conditions,” said Akhtar.

Dharavi is among Asia’s largest slums and hence is at a much higher risk of Covid-19 spreading due to unsafe sanitation and lack of proper toilets.

While Akhtar agrees that adequate grain supply being facilitated by the government under the PM Garib Kalyan package would motivate workers to stay home longer, he felt this wouldn’t be sufficient to sustain them. “There is a reason why workers from smaller towns come to places like Mumbai or Delhi in search of a livelihood. Yes, my business is suffering ahead of the peak festive season but I firmly believe that the workers will be back by January,” he added.

Refusing carrots

Even special incentives like cash bonuses or accommodation haven’t been able to lure workers back. Delhi-based staffing consultant Sanket Ahuja told Moneycontrol that he has been getting close to 20 cases a month since July where companies contact individuals like him to help convince workers to return.

“I had a client who manufactures Kannauj perfume in Uttar Pradesh. Merely two days before the lockdown, 18 of his 35 member workforce moved back home. Of them, eight were from Srinagar and they simply cut all contact. The rest belonged to Rajasthan and indicated that they would not return,” he added.

Ahuja explained that the perfume business owner was not only ready to pay for their travel and quarantine expenses, but also offered a 10 percent pay hike since the gifting season had begun. But the workers refused, citing virus fears. One worker had just had a baby in August and thought it was too risky to bring his wife and child along.

“I am now desperately scouting for replacements. Perfumery is a niche business and we need at least semi-skilled talent for this purpose. It is really a challenge due to the reverse migration,” he added.