NITI Aayog’s draft national policy on migrant workers

1. NITI Aayog’s draft national policy on migrant workers – Relevant for Mains GS 2 Governance

What is the news ?

  • NITI Aayog, along with a working subgroup of officials and members of civil society, has prepared a draft national migrant labour policy.

What is in the draft?

A rights-based approach

  • The draft describes two approaches to policy design: one focussed on cash transfers, special quotas, and reservations; the other which “enhances the agency and capability of the community and thereby remove aspects that come in the way of an individual’s own natural ability to thrive”.
  • The policy rejects a handout approach, opting instead for a rights-based framework. It seeks “to remove restrictions on true agency and potential of the migrant workers”; the goal, it says, “should not be to provide temporary or permanent economic or social aids”, which is “a rather limited approach”.
  • Migration, the draft says, “should be acknowledged as an integral part of development”, and “government policies should not hinder but…seek to facilitate internal migration”. This compares with the approach taken in the Report of the Working Group on Migration, released in January 2017 by the then Ministry of Housing and Urban Poverty Alleviation. The report argued that the movement from agriculture to manufacturing and services was inherently linked to the success of migration in the country.

Issues with existing law

  • The 2017 report argued that specific protection legislation for migrant workers was unnecessary. “(Migrant workers) should be integrated with all workers…as part of an overarching framework that covers regular and contractual work,” it said.
  • The report discussed the limitations of The Inter State Migrant Workers Act, 1979, which was designed to protect labourers from exploitation by contractors by safeguarding their right to non-discriminatory wages, travel and displacement allowances, and suitable working conditions.
  • However, this law — which was modelled on a 1975 Odisha law — covered only labourers migrating through a contractor, and left out independent migrants.
  • The 2017 report questioned this approach, given the size of the country’s unorganised sector. It called for a comprehensive law for these workers, which would form the legal basis for an architecture of social protection. This was in line with the recommendations of a 2007 report by the National Commission for Enterprises in the Unorganised Sector under the Ministry of Micro, Small and Medium Enterprises.
  • The NITI Aayog’s policy draft too, mentions that the Ministry of Labour and Employment should amend the 1979 Act for “effective utilisation to protect migrants”.

Governance nuts and bolts

  • The NITI draft lays down institutional mechanisms to coordinate between Ministries, states, and local departments to implement programmes for migrants. It identifies the Ministry of Labour and Employment as the nodal Ministry for implementation of policies, and asks it to create a special unit to help converge the activities of other Ministries. This unit would manage migration resource centres in high migration zones, a national labour Helpline, links of worker households to government schemes, and inter-state migration management bodies.
  • Migration focal points should be created in various Ministries, the draft suggests. On the inter-state migration management bodies, it says that labour departments of source and destination states along major migration corridors, should work together through the migrant worker cells. Labour officers from source states can be deputed to destinations – e.g., Bihar’s experiment to have a joint labour commissioner at Bihar Bhavan in New Delhi.

Ways to stem migration

  • Even as it underlines the key role of migration in development, the draft recommends steps to stem migration; this is an important difference with the 2017 report. The draft asks source states to raise minimum wages to “bring major shift in local livelihood of tribals… (that) may result in stemming migration to some extent”.
  • The absence of community building organisations (CBO) and administrative staff in the source states has hindered access to development programmes, pushing tribals towards migration, the draft says. The “long term plan” for CBOs and panchayats should be to “alleviate distress migration policy initiatives” by aiming “for a more pro-poor development strategy in the sending areas…that can strengthen the livelihood base in these areas”.
  • Alongside the long-term goal, policies should “promote the role of panchayats to aid migrant workers” and integrate urban and rural policies to improve the conditions of migration. Panchayats should maintain a database of migrant workers, issue identity cards and pass books, and provide “migration management and governance” through training, placement, and social-security benefit assurance, the draft says.

The importance of data

  • Both the 2017 report and the new draft stress the need for credible data.
  • The draft calls for a central database to help employers “fill the gap between demand and supply” and ensure “maximum benefit of social welfare schemes”. It asks the Ministries and the Census office to be consistent with the definitions of migrants and subpopulations, capture seasonal and circular migrants, and incorporate migrant-specific variables in existing surveys.
  • Both documents see limited merit in Census data that comes only once a decade. The 2017 report called on the Registrar General of India to release migration data no more than a year after the initial tabulation, and to include sub-district level, village level, and caste data. It also asked the National Sample Survey Office to include questions related to migration in the periodic labour force survey, and to carry out a separate survey on migration.

Preventing exploitation

  • The policy draft describes a lack of administrative capacity to handle issues of exploitation. State labour departments have little engagement with migration issues, and are in “halting human trafficking mode”, the draft says. “The local administration, given the usual constraints of manpower, is not in a position to monitor… (This) has become the breeding ground for middlemen to thrive on the situation and entrap migrants.”
  • The draft points to the legal support and registrations tracking potential exploitation in Nashik and certain blocks in Odisha; it also flags the poor supervision of migration trends by anti-trafficking units in Chhattisgarh and Jharkhand.

Specific recommendations

* The draft asks the Ministries of Panchayati Raj, Rural Development, and Housing and Urban Affairs to use Tribal Affairs migration data to help create migration resource centres in high migration zones. It asks the Ministry of Skill Development and Entrepreneurship to focus on skill-building at these centres.

* The Ministry of Education should take measures under the Right to Education Act to mainstream migrant children’s education, to map migrant children, and to provide local-language teachers in migrant destinations.

* The Ministry of Housing and Urban Affairs should address issues of night shelters, short-stay homes, and seasonal accommodation for migrants in cities.

* The National Legal Services authority (NALSA) and Ministry of Labour should set up grievance handling cells and fast track legal responses for trafficking, minimum wage violations, and workplace abuses and accidents for migrant workers.

2. Regulation of NBFCs-  Relevant for  Mains GS 3 Economics

Why is this in news ?

  • Recently, the Reserve Bank of India (RBI) has proposed a tighter regulatory framework for Non-Banking Financial Companies (NBFCs) by creating a four-tier structure with a progressive increase in intensity of regulation.
  • It has also proposed classification of Non-Performing Assets (NPAs) of base layer NBFCs from 180 days to 90 days overdue.
  • Earlier in 2020 the RBI announced a host of measures to provide liquidity support to NBFCs.

The Department of Non-Banking Supervision (DNBS) of RBI is entrusted with the responsibility of regulation and supervision of NBFCs under the regulatory – provisions contained under Chapter III B and C and Chapter V of the Reserve Bank of India Act, 1934.

What are the guidelines ?

  • The Regulatory and Supervisory Framework of the Reserve Bank provides for, among other things, registration of NBFCs, prudential regulation of various categories of NBFC, issue of directions on acceptance of deposits by NBFCs and surveillance of the sector through off-site and on-site supervision.
  • Deposit taking NBFCs and Systemically Important Non-Deposit Accepting Companies are subjected to a greater degree of regulation and supervision.
  • The focus of regulation and supervision is three fold, viz., a) depositor protection, b) consumer protection and c) financial stability.
  • The RBI has also been empowered under the RBI Act 1934 to take punitive action which includes cancellation of Certificate of Registration, issue of prohibitory orders from accepting deposits, filing criminal cases or winding up petitions under provisions of Companies Act in extreme cases.

What is its aim ?

  • The proposed framework is aimed at protecting financial stability while ensuring that smaller NBFCs continue to enjoy light regulations and grow with ease.
  • Proposed Classification of NBFC (The Four-Tier Structure): The regulatory and supervisory framework of NBFCs should be based on a four-layered structure:

Four Layers :

1. Base Layer:

NBFCs in the lower layer will be known as NBFC-Base Layer (NBFC-BL).

For NBFCs in this layer least regulatory intervention is warranted.

2. Middle Layer:

NBFCs in the middle layer will be known as NBFC-Middle Layer (NBFC-ML)

The regulatory regime for this layer will be stricter compared to the base layer.

Adverse regulatory arbitrage vis-à-vis banks can be addressed for NBFCs falling in this layer in order to reduce systemic risk spill-overs, where required.

3. Upper Layer:

NBFC in the Upper Layer will be known as NBFC-Upper Layer (NBFC-UL) and will invite a new regulatory superstructure.

This layer will be populated by NBFCs which have large potential of systemic spill-over of risks and have the ability to impact financial stability.

There is no parallel for this layer at present, as this will be a new layer for regulation. The regulatory framework for NBFCs falling in this layer will be bank-like, albeit with suitable and appropriate modifications.

If an identified NBFC-UL does not meet the criteria for classification for four consecutive years, it will move out of the enhanced regulatory framework.

4. Top Layer:

Ideally this layer is supposed to be empty.

It is possible that supervisory judgment might push some NBFCs out of the upper layer of the systemically significant NBFCs for higher regulation/supervision.

These NBFCs will occupy the top of the upper layer as a distinct set. Ideally, this top layer of the pyramid will remain empty unless supervisors take a view on specific NBFCs.

If certain NBFCs lying in the upper layer are seen to pose extreme risks as per supervisory judgement, they can be put to higher and bespoke regulatory/supervisory requirements.

Non-Banking Financial Company (NBFC)

  • A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.
  • A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).

Features of NBFCs :

  • NBFC cannot accept demand deposits.
  • NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.
  • Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.

3. Transit Oriented Development – Relevant for GS 3 Economics

Why is it in News ?

The redevelopment of New Delhi Railway Station (NDLS) has become the first project to be undertaken on the Transit-Oriented Development (TOD) concept in the NCR. The project has been approved by the Rail Land Development Authority (RLDA) which is a statutory body under the Ministry of Railways responsible for the development of vacant railway land.

Currently, the Indian Railways has approximately 43,000 hectares of vacant land across the country.

The Government, in recent times, has been promoting ‘transit-oriented development’ where public transport is the backbone of cities.

What is Transit-Oriented Development ?

Transit-Oriented Development (TOD) integrates land use and transport planning and aims to develop planned sustainable urban growth centers, having walkable and livable communes with high density mixed land-use.

What is Plan of Transit-Oriented Development (TOD)  ?

  • A TOD typically includes a central transit stop (such as a train station, or light rail or bus stop) surrounded by a high-density mixed-use area, with lower-density areas spreading out from this center.
  • A TOD is also typically designed to be more walkable than other built-up areas, through using smaller block sizes and reducing the land area dedicated to automobiles.

What is need of Transit-Oriented Development and what are its benefits ?

Factors such as rapidly growing population, Urbanization, migration to cities, and traffic congestion etc.


Higher quality of life with better places to live, work, and play, greater mobility with ease of moving around, reduced traffic congestion, car accidents and injuries, reduced household spending on transportation, resulting in more affordable housing etc.

What is TOD  Policy in India ?

 It is based on three pillars:

  1. Enable Transformation (From Private to Public Transportation): To assist in transformation of cities from private vehicle dependent city to public transport oriented development
  2. Accessible Public Transport (Promote Green Mobility): To promote the usage of public transport by making it accessible, encourage green mobility by encouraging people to walk and cycle and at the same time curb pollution and other negative impacts of motorization.
  3. Compact Walkable Communities: To create livable and affordable communities, which are compact and walkable.

What are objectives of TOD Policy ?

  1. Public Transport: To promote the use of public transport and reduction in private owned vehicles by developing high density zones in the influence area, which would increase the share of transit and walk trips and also result in reduction in pollution and congestion in the influence area.
  2. Reduction in Travel: To provide all the basic needs of work/ job, shopping, public amenities, entertainment in the influence zone with mixed land-use development which would reduce the need for travel.
  3. Road Network: To establish a dense road network within the development area for safe and easy movement.
  4. Inclusivity: To develop inclusive habitat in the influence area so that the people dependent on public transport can live in the livable communities within the walkable distance of transit stations. To integrate the Economically Weaker Sections (EWS) and affordable housing in the influence zone by allocating a prescribed proportion of built-up area for them in the total housing supply.
  5. Safety to Vulnerable Section: To ensure development of a safe society with special attention to safety of women, children, senior citizens and differently abled by making necessary amendments to the building bye laws.
  6. Planned Urbanization: To prevent urban sprawl by accommodating the growing population in a compact area with access to the transit corridor, which would also consolidate investments and bring down the infrastructure cost for development.
  7. Climate Friendly: To reduce carbon footprints by shifting towards environmentally friendly travel options for the line haul as well as for access and egress trips.

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