1. Variable regulation in Indian states
and labour migrations within India:
Some observations
Prashanth NS
Institute of Public Health, Bangalore

2. India
• World’s largest
democracy
• <2.5% of landmass,
but > one-sixth of the
world’s population
• Federal parliamentary
structure with 28
states and 7 UTs

3. Federal structure

4. Kerala

5. What is the Kerala Model of
Development?
• Gained attention due the presence of the
‘paradox’ of high indicators of social
development and comparatively low economic
growth.
• Promoted as a ‘Cheap’ Model of Development-
No need to achieve economic growth first.
• Amartya Sen and Jean Dreze’s favourite
example– Receives a mention in a lot of their
work but they started to express concern about
its low economic growth too!
Source: Natasha Chhabra/UNDP Policy Centre

6. Social Protection Programmes in
Kerala
• Land Reforms in Kerala- Equity as its goal.
• Democratisation of Education
• Universal Health Care

7. Kerala model
• A set of high material quality-of-life indicators
coinciding with low per-capita incomes, both
distributed across nearly the entire population of
Kerala.
• A set of wealth and resource redistribution
programmes that have largely brought about the high
material quality-of-life indicators.
• High levels of political participation and activism
among ordinary people …Kerala's mass activism and
committed cadre were able to function within a largely
democratic structure…
Source: Franke, RW & Chasin BH (1999)

8. In-migration of unskilled labour

9. But…

10. An outlier in more than one way
• Kerala is an outlier in terms of state social
security initiatives, labour laws, health and
development indicators
• The unskilled labour in-migration and skilled
labour emigration are somehow
consequences of these
• Strict land tenure laws and labour-friendly
laws prevent “investment”

11. It is perhaps not an
accident that Kerala, Tamil
Nadu and Himachal
Pradesh also tend to have
the best social indicators
among all major Indian
states. For instance, a
simple index of children’s
health, education and
nutrition achievements
clearly places these three
states at the top ….

12. Securing land, labour rights: A dis-incentive?
• States in India compete with
each other to woo investors.
“Tax-free
holidays”, “Industry parks”.
• Even legislations to create
exceptions to land laws
• Keeping India’s economic
growth alive: proposals to
create extra-constitutional
authorities to “usurp”
state’s prerogative in
national interest -> National
Infrastructure Bureau

13. Competition among states: Race to the bottom?
“…we indeed find that the approval of SEZs and EOUs
investment proposals in one state are positively correlated
with approval of SEZs and EOUs investment proposals
elsewhere (i.e. potential hosts are more likely to approval
SEZ and EOU investment proposals when their competitors
have done so)”
“The race to attract investments is potentially having
socially undesirable consequences in the areas of land
acquisitions, environmental regulations, and labour
standards.”
Ronald B. Davies and Krishna Chaitanya Vadlamannati (2013)

14. References & Thanks
• Cato Foundations’s Economic Freedom of States in India.
http://www.cato.org/economic-freedom-india/EconomicFreedomIndia-2011.pdf
• Krishnadas et al. The Worrisome Business of the National Investment Board.
Economic & Political Weekly. Nov. 10 2012
• Sato, H. Social security and well-being in a low-income economy: an appraisal of
the kerala experience. The Developing Economies, XLII-2 (June 2004): 288–304.
http://www.ide.go.jp/English/Publish/Periodicals/De/pdf/04_02_08.pdf
• The Hindu Op-ed dated November 14, 2012 “Workers without Borders”.
http://www.thehindu.com/opinion/editorial/workers-without-
borders/article4093603.ece
• Ronald B. Davies and Krishna Chaitanya Vadlamannati (2013, forthcoming) A Race
to the Bottom in Labour Standards? An Empirical Investigation, Journal of
Development Economics.
• Dreze, J & Sen, A. Putting growth in its place. Essay in Outlook Magazine.
http://www.outlookindia.com/article.aspx?278843
• Maps and table from Wikimedia Commons images licensed under creative
commons