Migration adds Rs 15L cr to states’ GDP, says SBI report
The report conducted by the State Bank of India (SBI) highlights the positive impact of internal migration on states’ gross domestic product (GDP). According to the findings, the contribution of internal migration to states’ GDP amounted to Rs 15 lakh crore. This contribution is primarily attributed to the increase in productivity resulting from the redistribution of human resources.
The report indicates that the benefits gained from the increase in productivity due to circular migration (movement of people within a country) far surpass the negative effects on the GDP of states that experience a departure of individuals. Circular migration involves individuals moving from one region to another, often for better employment opportunities, and then returning to their original region.
To analyze the impact of circular migration on the growth of the middle class, the report utilizes income tax returns as a basis for study. The weighted mean income, which was Rs 4.4 lakh during the assessment year 2014, has observed a significant increase to Rs 13 lakh. The report further projects that this income level will continue to rise, reaching Rs 49.7 lakh by the year 2047. This projection is based on the redistribution of tax filers from lower-income groups to upper-income groups.
In summary, the SBI report underscores the positive influence of internal migration on states’ GDP. The gains in productivity resulting from the reallocation of human resources are found to outweigh any negative impact on GDP caused by the outflow of people from certain states.
Furthermore, the study showcases the positive trajectory of middle-class income growth, with substantial increases projected in the coming decades due to the shifting distribution of tax filers from lower to upper-income categories.
The report by the State Bank of India (SBI) delves into the dynamics of internal migration within India, focusing on the major states of the country. Among these major states, six stand out for their net positive migration rates. These states are Delhi, Tamil Nadu, Kerala, Gujarat, Karnataka, and Maharashtra. In these states, the influx of migrants exceeds the outflow, indicating a net gain in population due to migration.
The analysis conducted in the report reveals that the migrant population in these net positive migration states has made substantial contributions to their respective Gross State Domestic Products (GSDP). The contribution ranges from 0.5% to 2.5% of the GSDP for each state.
When these contributions are aggregated, it results in a cumulative addition of approximately 7.8% of the total GSDP, which translates to around Rs 15 lakh crore. This sizeable economic contribution highlights the significance of internal migration as a driving force behind economic growth and development in these states.
On the other hand, the report also identifies states with net negative migration, where more people are leaving the state than entering it. These states include Uttar Pradesh (UP), Bihar, Rajasthan, Madhya Pradesh, Odisha, Andhra Pradesh, and West Bengal. Negative migration states experience a loss in terms of population due to outward migration. This outflow can result from factors such as limited economic opportunities, lack of infrastructure, or other social and economic challenges.
It’s worth noting that while net positive migration states benefit from the economic contributions of migrant populations, they might also face challenges related to urbanization, infrastructure, and resource distribution. Conversely, net negative migration states might need to focus on creating conditions that retain their populations and attract opportunities for growth.
In conclusion, the SBI report emphasizes the contrasting migration trends across major states in India. While net positive migration states reap the benefits of migrant contributions to GSDP and economic growth, net negative migration states might need to address factors that lead to outward migration and consider strategies to bolster their economic prospects and attract investment.
The State Bank of India (SBI) report highlights a significant upward trend in income mobility and the shifting distribution of income tax filers within various income strata over time. The report reveals that by the fiscal year 2047 (FY47), a substantial portion of income tax filers is projected to move out of the lowest income strata. This contrasts with the period between assessment years 2012-23 when a lower percentage of individuals transitioned out of the same income bracket.
Specifically, the report indicates that nearly 25% of income tax filers are anticipated to move up from the lowest income strata by FY47. This is in comparison to the previous period, during which 13.6% of individuals transitioned out of the same bracket. This observation points to a notable acceleration in income mobility and improvement in economic conditions for a significant portion of the population.
The report further illustrates the growth trajectory of the weighted mean income. The weighted mean income, which stood at Rs 4.4 lakh during the assessment year 2014 (AY14) based on income tax return (ITR) data, has undergone substantial growth. This increase in income is attributed to multiple factors:
1. Transition from Lower to Upper Income Groups: One significant driver of income growth is the movement of individuals from lower-income groups to upper-income groups. As people experience upward mobility, their earning potential improves, contributing to the overall rise in income levels.
2. Buoyancy in Tax Filers: The report notes that there has been an increase in the number of tax filers who were not reporting income previously. This suggests a broader participation in the formal economy and taxation, reflecting a positive economic trend.
3. Long-Term Trend: The report projects that this growth in income will continue over time. By the year 2047, the weighted mean income is expected to reach Rs 49.7 lakhs. This long-term projection underscores the sustained improvement in income levels and the potential for continued economic progress.
Overall, the SBI report highlights the significant positive changes in income distribution and mobility within India. The transition of individuals from lower to upper income groups, along with the expansion of the tax-filing base, has contributed to substantial growth in income levels. This upward trajectory is expected to persist, reflecting the broader economic improvements that can be achieved through targeted policies and strategies that promote income growth and mobility.
