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Migration of Labour From India

Jun 03, 2018



Chirag Dave
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    Economics of Global Tra! an Financ!


    Si#an$ Na%l!


    MCom Par$)I in Ban*in% + Financ!


    Prof, Jos! A-%-s$in!







    "EAR2 '&34)35



    .ILE PARLE /708 MUMBAI 9 5&&&:;,

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    This is to certify that the undersigned have assessed and evaluated the project on $imis$ic .i!

    The optimistic scenario is that migration reduces poverty in source areas by shiftingpopulation from the lo-income rural sector to the relatively high-income urban

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    /or each optimistic vie summari>ed above) there is a pessimistic counterpart. !n general) themost pessimistic studies on migration-development interactions in source areas appeared inthe 1G+0s and 1GH0sF research findings on this topic ere more optimistic in the 1GG0s. ycontrast) studies of impacts of immigration on host economies) largely optimistic in the 1G+0sand 1GH0s) have become more pessimistic in recent years.

    !n order for migration to raise per-capita incomes in migrant-source economies) it isnecessary for income not to fall-or else to fall only slightly-hen migrants leave. 5essimisticstudies argue that this is generally not the caseF migration reduces income in migrant-sendingareas because the marginal product of the migrant;s labour is large prior to migration andmigrants take productive capital

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    uncover interactions beteen migration and economic changes at migrant origins anddestinations.

    %ome insights into migration-poverty interactions may be gleaned) mostly indirectly) fromthe e'isting literature. #evertheless) almost no studies e'plicitly address this topic) and an

    agenda for future research is clearly needed. The overarching goal of this paper is tosummari>e the state of knoledge and provide a basis for identifying a future researchagenda on migration) ith a focus on poverty.

    The remainder of this paper is organi>ed into three sections. %ection 2 presents a briefovervie of rural out-migration and international migration) their dimensions and basiccharacteristics. %ection 3 summari>es theories of internal and international migration ande'amines evidence on migration;s impacts in source and destination areas. The migrationliterature is vast) and the aim throughout is to selectively synthesi>e rather than offer ane'haustive revie of migration research. " more detailed revie of migration researchappears in a longer version of this report

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    Im>ac$s b!on $#! mi%ran$ #o-s!#ol

    The migration and remittance effects discussed above) as comple' as they may seem)represent only the direct or first-round impacts of migration on source economies. ,hanges in

    production and e'penditure patterns in migrant-source households transmit the impacts of

    migration to other households inside and outside the rural economy. igrant households maybe closely integrated ith local product and factor markets) supplying inputs to localproduction and demanding locally produced non-tradables. !n this case) changes in migrationand remittances may affect local prices) production) and incomes) including for non-immigrant households. "s a result) many and perhaps most of the impacts of migration andremittances are found in households that do not participate directly in migration.

    " number of studies utili>ing micro economy-ide modelling techni8ues e'plore the role ofmigration and the impacts of economic integration policies on incomes) employment) ande'penditures in migrant-sending regions. /indings from these studies point to four broadconclusions regarding impacts of migration and remittances in migrant-sending regions(

    /irst) migrant remittances create income and employment multipliers in migrant-sendingvillages and tons) and the si>e of these multipliers can be large. /or e'ample) a L100increase in remittances from the Jnited %tates led to a L1+H increase in total income in amigrant-sending village in e'ico

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    icro economy ide models highlight the importance of having local capital markets thatcan make remittance-induced savings in migrant households available for investing by othersin the local economy. therise) individual households are constrained to self finance theirinvestments) and the possibility of some families speciali>ing in migration hile othersspeciali>e in productively investing remittance-induced savings is ruled out.

    Im>ac$s on mi%ran$)#os$ !conomi!s

    &conomic and fiscal impacts of immigration have been the subject of a prolific literature andon-going controversy among researchers) both in the Jnited %tates and in other majorimmigrant-receiving societies.

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    !n 1GG0) the Jnited %tates ,ongress appointed a ,ommission on !mmigration *eform torevie J.%. immigration policies and las and to recommend changes. !n 1GGE) the,ommission re8uested that the #ational *esearch ,ouncil convene a panel of e'perts toassess the demographic) economic) and fiscal ramifications of immigration in the Jnited%tates. The panel as asked to provide a scientific foundation for policymaking on specific

    issues and a background for the ,ommission;s deliberations. This panel established a recordof key findings on demographic) economic) fiscal) and social impacts of immigration in theJnited %tates) including(

    1. igration ill play the dominant role in Jnited %tates demographic groth beteenno and 20E0) accounting for to-thirds of that nation;s total population increase andsignificantly altering the country;s age distributionF

    2. "lthough there are inners and losers ) immigration yields net economic gains forJnited %tates residents) but these gains are small relative to the total Jnited %tateseconomyF

    3. !mmigrants; fiscal impacts are negative at the state and local levels but positive at thefederal level) and fiscal costs are concentrated in a fe states and localities) resultingin conflicts over ho should bear the fiscal costs of immigration2F and

    4. %ocial integration of immigrants and their descendants into the Jnited %tates and theeffects of immigration on host-country institutions are e'traordinarily comple' andvary across immigrant groups.



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    lobal migration( The facts and figures ,urrently) nearly 1G1 million people are estimated tobe international migrants) including 11E million) or 60 per cent in developed countries and +6million) or 40 per cent in developing countries)1 making one in every 3E persons on earth aninternational migrant) up from one in every 40 in 1G6E

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    200H=. The !ndian overseas community consists of both the persons of !ndian origin enship of other countries and the #on *esident !ndians ens of !ndia. &stimates of country-isesi>e of overseas !ndian community are presented in "ppendi' 1.!nternational labourmigration from independent !ndia The pattern and dimension of international labour flos

    from independent !ndia have been characteri>ed by significant transformations over the pasthalf a century ed nations. The average annual inflos of the !ndian immigrants to all thesecountries recorded substantial groth since the 1GG0s as compared to the earlier decades. !nthe case of the Jnited %tates) the average annual inflo of immigrants recorded at 26)1H4

    persons during the 1GH0s

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    immigration from !ndia to these countries during the period 1GE0-1GG0 as that such labourflos ere made up almost entirely of permanent migration in so faras the proportion ofimmigrants ho returned to !ndia) after a finite period of time) ere almost negligibleed

    professional skills) to meet specific the skill needs and labour shortages.The most notablecase is that of the Jnited %tates hich introduced the :-1 programme to admit migrants to

    perform services in ;specialty occupations; based on professional education) skills) andP ore8uivalent e'perience. Jnder the :-1 programmme) specialty orkers are permitted to beemployed for as long as three years initially ith e'tensions not e'ceeding three years.%pecialty occupations mainly include computer systems analysts and programmers)

    physicians) professors) engineers) and accountants. arge number of !ndian professionalshave availed :-1 visa route to seek employment in the Jnited %tates during the past decade.

    !n terms of occupational groups) health and medical services are reported to have gronsignificantly over time in relation to other sectors and occupations. " large number of !ndiansho have ac8uired ork permits are engaged in health related professions. /or instance) dataon the stock of registered doctors in Jnited Iingdom by country of 8ualification sho thatthe largest number is accounted by !ndian of the salient features of internationallabour flo from !ndia in recent years is that the destination of !ndian migrants) especiallyhigh-skilled migrants) has diversified considerably. %ignificant numbers of !ndian

    professionals are no heading toards ne and emerging destinations in continental &urope)&ast "sia and "ustralasia. "s regards continental &urope) ermany) /rance) and elgium areemerging as the major destination countries of !ndian migrants. "lthough the proportion of!ndians to the total immigrants in these countries are rather insignificant) it is noteorthy thatmajority of these !ndians are being admitted under speciali>ed employment programmes inorder to address the acute skill shortages e'perienced in key and e'panding sectors. ermanyis the key case in point as it has introduced a speciali>ed scheme) reen ,ard %cheme) in2000 to attract !T specialists from countries like !ndia. !t is estimated that more than 60 percent of those ho have been admitted under reen ,ard %cheme are !ndians. There is alsoincreased in-take of !ndian !T specialists in &ast "sian countries like 9apan and alaysiaunder specialised temporary employment schemes. /or instance) nearly 10 per cent of thetotal !T engineers admitted to 9apan during 2003 ere !ndians ."ustralia is another majordestination of !ndian professionals and high skilled orkers. #umber of !ndians immigratingon a permanent basis to "ustralia has recorded significant increases since the 1GG0s and

    especially after the turn of the 21st century. The average inflo of !ndian immigrants to"ustralia has almost doubled in the recent years ith the numbers increasing from 33++during 1GGE-2000 to 6GE+ during 2001-200E.,onse8uently the proportion of !ndians in totalimmigration inflos has registered a noteorthy increase) from around 3.E per cent in the late1GG0s to +.6 per cent by 200E


    igration of unskilled and semi-skilled labour to ork as contract labour is the mostdominant form of international labour flos emanating from !ndia. "lthough such labour

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    flos) especially to the ,, countries) have attained substantial dimensions in the past todecades) lack of data about this movement of people has often bedeviled systematicappraisals of this phenomenon. The primary source of information on international migrationfrom !ndia is the data published by the ffice of the 5rotector eneral of &migrants) inistryof verseas !ndian "ffairs) overnment of !ndia. %ection 22 of the &migration "ct) 1GH3

    provides that no citi>en of !ndia shall emigrate unless hePshe obtains emigration clearancefrom the 5rotector of &migrants. %uch a clearance is granted only after the 5rotector of&migrants verifies the relevant employment contracts. :oever) the "ct e'empts somecategories of people for hom the emigration clearance is not re8uired) referred to as&migration ,heck is #ot *e8uired ,ategory

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    emigration clearance.!n terms of the share of these prominent states) there has been a declinein Ierala;s contribution hereas the shares of Tamil #adu and "ndhra 5radesh haveregistered considerable increases. This could mean that larger numbers of people ho aremigrating from Ierala are no engaged in skilledPprofessional activities hereas there arelarger outflos of unskilled labourers ho re8uire emigration clearance from states like

    Tamil #adu and "ndhra 5radesh.



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    The %ocioeconomic and political profile of the skilled !ndian diaspora in the developedcountries reflects the empoerment of the !ndian migrants in the developed countries overtime. Bithin the &uropean Jnion ens in "ustraliaF and #e Oealand has alsoitnessed a rise in the entry of !ndian professional immigrants) those engaged in domesticretail trade) medical) hospitality) engineering) and !nformation Technology sectors) andcountries like 9apan) Iorea) and %ingapore are also trying to attract !ndian talent.!ndian iaspora "ssociations of #orth "merica category associations

    1. ,ulturalP*eligious"ssociations%amband) "ssam "ssociation of #orth "merica) Telugu "ssociation of #orth "merica)"merican Telugu "ssociation

    E. evelopment"ssociation "ssociation for !ndia@s evelopment

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    for its labour skills) hich has been the main factor for admitting the !ndian skilled orkerson a large scale. !t is hardly surprising therefore if in terms of the place in the J% economyinde'ed by employment) occupation) education and income of the immigrants) the !ndiandiaspora had continued to rank amongst the top all through the 1G+0s till the present. Thereare over 1000 J%based organi>ations of !ndians in #orth "merica) ith branches in

    ,anada. These represent various interest groups in !ndia) ranging from regions to states tolanguages) etc. *eligion) caste) cultural and linguistic identities find significant space in theseassociations and netorks. :oever) some professional groups are involved in grassrootdevelopment activities in !ndia as ell as in the elfare of their members abroad in the



    "lthough !ndians manned the clerical and technical positions of the oil companies in the ulfafter oil as discovered in the region during the 1G30s) the overall numbers ere still small.21| P a g e

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    eteen 1G4H and the early 1G+0s) these numbers gradually increased from about 1)400 to40)000. Bhen large scale development activities started folloing the 1G+3 spurt in oil pricesin the si' ulf ,ooperation ,ouncil .) the 9ordanians) yemenis) 5alestinians and&gyptians. /rom less than 2EH)000 in 1G+E) migrant !ndian population in the ulf ent up to3.31H million in 2001) hich is no estimated to have crossed 3.E million."dmission to the,, countries as not as difficult prior to the mid1G+0s) but thereafter restrictions have

    been imposed by the host countries due to the fear of rapid groth of nonnationalpopulation. Thus it has been difficult for families to accompany the nonnationals orkers tothese countries) particularly the unskilled contract orkers. /oreigners are not alloed to on

    businesses or immovable property in the ulf countriesF for running business enterprises theyare re8uired to have local citi>ens or agencies as major partners in their ventures) hetheractive or as Ssleeping partner. Bhen it comes to human resources) shortage of labour has

    been endemic in all the countries of the ulf) for the entire range of ork fromprofessionals like doctors and nurses) engineers) architects) accountants and managers) tosemiskilled orkers like craftsmen) drivers) artisans) and other technical orkers) tounskilled labourers in construction sites) farmlands) livestock ranches) shops and stores andhouseholds

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    overnment of !ndia till after the ulf Bar of 1GG0G1( Jnskilled and %emiskilled labourby ccupation) 1GHH1GG2 overnment of !ndia) cited in *ajan

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    technology ation and moderni>ation planned under the#ehruvian leadership of the early decades. The first !ndian !nstitute of Technology asestablished nine years after !ndia@s independence) at Iharagpur in 1GE6.14 The five !!Ts)modeled on the assachusetts !nstitute of Technology ing !ndia@s industrialisation programme. The !!Ts not only created space forhundreds of faculty members) but also attracted a good number of them back from abroad.1E"s all the !!Ts in the beginning had intellectual and material support from various advanceddonor countries such as the J%") J%%*) ermany) and the JI) they introduced the guestfaculty system from the respective countries. The e'change put !ndian scientists in touch iththe cuttingedge of technological research and advanced training en around that time. The onus) hoever)as put on the migrants as Sdeserters of the Smotherland !ndia) either openly or subtly.1+/rom time to time various restrictive measures to contain the problem ere conceived) butthere has never been a consensus e'cept in the case of the medical sector here somerestrictions ere introduced) but ith too many escape clauses to be effective. The moststriking feature of the period has still been the relative lack of policy attention to the problemof brain drain. &ducation policy documents of the time did not provide for any mechanism tocheck the problem of brain drain. The Iothari ,ommission

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    Sbrain drain of the 1G60s and 1G+0s to the Sbrain bank of the 1GH0s and 1GG0s) andsubse8uently to Sbrain gain in the tentyfirst century. :oever) the !T bubble burst in theake of the "merican recession and hordes of techies ere sent back to !ndia) having losttheir :1 visa contracts. Bestern &uropean countries in the &J) including the JI looked asa more sustainable destination) and &astP%outh &ast "sia looked at as an emerging

    destination. :oever) ermany@s ,hancellor erhard %chroeder@s scheme of issuing 20)000Sreen ,ards to computer specialist from non&J countries) mainly !ndia

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    considering the modalities to sustain them in a long-term perspective. This as surprising invie of the fact that the sustained international migration from !ndia and its conse8uences

    provided massive potential for addressing different developmental concerns. Theestablishment of a separate inistry) inistry of verseas !ndian "ffairs in ay 2004) todeal ith all matters pertaining to overseas !ndians) comprising 5ersons of !ndian rigin

    of Inia /OCI0 Sc#!m!

    !n response to a long and persistent demand for Kdual citi>enshipK particularly from theiaspora in #orth "merica and developed countries) the overnment of !ndia introduced

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    verseas ,iti>enship of !ndia enshipK in some form or the other e'cept 5akistan andangladesh. "ccordingly) the citi>enship

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    elhi. %ince then this event held on an annual basis has become the major platform fordiscussions on a host of issues related to overseas !ndians. The high level deliberations have

    been attended by significant numbers of overseas !ndian community from across the globe. !thas also become the centre stage for recogni>ing the contributions made by !ndian iasporaas the 5ravasi haratiya %amman "ard are conferred during this meet to prominent

    members of the !ndian iaspora. verseas ,iti>enship of !ndia enshipK particularly from the iaspora in #orth"merica and developed countries) the overnment of !ndia introduced verseas ,iti>enshipof !ndia enshipK in some form or the other e'cept 5akistan and angladesh. "ccordingly)the citi>enship enship are found in the ,onstitution) the ,iti>enship "ct 1GEE) the 5assport "ct1G6+) the ,riminal 5rocedure ,ode and other regulations) there has been no systematic legal

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    policy frameork to deal ith emigration out of the country. espite the debates) discourses)and perspective) the overnment of !ndia does not have any comprehensive policy on labourmigration or overseas employment) hether for skilled or unskilled orkers. :oever) the

    paradigm of policy stance in !ndia could be said to have moved over time from one ofrestrictive regime) to compensatory) to restorative) to developmental.21 The &migration "ct)

    1GH3) hich replaced the earlier 1G22 &migration "ct) has been designed mainly to ensureprotection to vulnerable categories of unskilled) and semiskilled orkers) and omen goingabroad to ork as housemaids and domestic orkers. Jnder the "ct) it is mandatory forregistration of all S*ecruiting "gents ith the ministry ed citi>ens of those countries because of restrictive regimes there. :oever) it is stilltoo early to gauge the impact of these to measures as they are in their infancy.



    :o does one assess hether migration has changed society in !ndia) and hether it has

    ade8uately contributed to social and economic development in !ndiaU !n other ords) hathave been the socioeconomic gains and losses arising from 21 The normal issue of forced

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    migration in terms of !ndians applying for refugee status in &urope) J%" or elsehere hasnot dran much attention in !ndia. *efugee issues are limited to asylees and asylum seekersin !ndia rather than from !ndia.These 8uestions have traditionally been raised in suggestingcostbenefit analysis at the microlevel for the individual migrant and the household) and atmacro level for society and the economy as a hole. &ven if it is assumed that the micro

    level assessment of benefits and losses to the households left behind in !ndia can moreaccurately identify and measure the benefits) there has not been many satisfactory surveys ofthe psychic losses that separation of family member brings) e'cept for a fe studies carriedout in the state of Ierala. /or e'ample) emigration of married men ho left behind theresponsibility of the management of the household to omen in the family) transformedabout one million omen into efficient home managers) but eventually also created the socialand psychological problems of the Sulf Bives and the loneliness of the Sulf 5arents)ho unlike the relatives of the skilled migrants to the developed countries ere notaccompanying the orkers to their destination countries

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    2002=. &ven in the case of macroeconomic assessment of much talked about remittances)there has been a Ssilent backash flo from the south countries of origin like !ndia to northcountries of destination like the JI) "ustralia) and the J% in the form of Soveseas studentfees

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    replacing older and longterm migrants ith younger and shortterm migrants) and ation of the host countries that) given the appropriate help) resources) and localsupport) one type of migrants the suspected Ssocial parasite can become the other) thesocial boon) or as someone has phrased it) the hite Best@s offhite hope

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    presence of the !ndian migrants) the flos of remittances) transfer of technology) and returnmigration must all be directed not Stop don but not toards trade and business but toardsthe removal of to kinds of poverty in !ndia the poverty of education and the Spoverty ofhealth areas here migration has so far failed to change the society in this country oforigin by contributing to its economic and social development. large masses of the illiterate

    and uneducated population) incapacitated further by their poor health status are the rootcauses of !ndia having one of the loest levels of average productivity of labour) andtherefore loest average ages in the orld a parado' hen !ndian diaspora members) onthe average) figure amongst the largest contributing ethnic communities in their countries ofdestination. /or e'ample) it is indeed parado'ical that the average perhour contribution ofeach employed orker ithin !ndia to the production of !ndia@s gross domestic product

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    leading labour e'port country has to ponder over the future impacts that this may have on the!ndian economy as ell as the !ndian iaspora. ,onsidering the demographic shifts and!ndia;s on position in producing human capital to possible scenarios emerge for !ndia(

    a,Inia losin% o-$

    "ccording to the Borld 5opulation ,ouncil the productive population of !ndia) i.e.) peoplebelonging to the age group 1E-60) ill stop increasing in the coming years and it ill stabiliseat 64 percent of the total population from 202E to 20E0 and ill decrease thereafter to 62

    percent of the total population in 20E0 ain) 200H=. !t may lead to shortage of skilled labourin !ndia too) if the present rate of migration from the country continues unabated. Thegovernment is right no focusing on the immediate benefits associated ith emigration. utthe pattern of emigration shos that the migrants belong to the high-skilled categories such asthe scientists) engineers) doctors) management and !T professionals) academicians) ho arealready in short supply) may lead to decline in productivity. "lso) the education system shallface severe shortage of teachers and researchers resulting in poor 8uality students passing outfrom educational institutions.

    b,Inia %ains

    The second scenario postulates that !ndia along ith ,hina ould emerge as a major globalplayer having an immense impact on the geo-political landscape. !ndia is ell positioned tobecome a technology leader in the coming decades. %ustainable high economicgroth)e'panding military capabilities and large demographic dividend ill be thecontributing factors to the e'pected elevation of the country. Inoledge and technologyinvolving the convergence of nano-) bio-) information and material technology could furtherits prospects in the forthcoming global economy. %ubstantial enhancement of financialrecourses in social sector) especially on education and research) ould help !ndia to becomethe largest source of knoledge professionals in the orld. The to scenarios just describedare based on the recent indicators of economic performance and potential for future groth.

    #othing is sure to happen. #evertheless) projections provide food for intellectual engagementand help moving ahead ith certain degree of e'pected outcomes. 5rojections) thereforeshould be given due importance in policy perspectives if they are based on solid empiricalindicators. igration policy of !ndia should) therefore) be based upon vital datasets of socialand economic importance.*esearch) "nalysis and evelopment !n order to ma'imi>e the

    positive impacts of cross-border migration and nunuru>e the negative conse8uences veritablestatistics is fundamental re8uirement. ata related to various aspects of migration such asfloPstock of migrants) destination countries) countries of origin) proftle of migrants) theirintentions) mode of crossing borders) legal status) remittances) etc.) for all migrants should be

    collected. :oever) the fact is that despite groing scale of international migratory flosnecessary statistics in !ndia is not easily available simply because it is neither collectedproperly nor maintained. "t present) statistics relevant to migration is being collected in !ndiafor different purposes by different government departments and other organisations) namely)ureau of !mmigration) 5rotectorate of &migrants) inistry of &'ternal "ffairs) ffice of the*egistrar eneral $ ,ensus ,ommissioner and #ational %ample %urvey rgani>ation

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    arrants se8uential coordination beteen various government departments) universities andinstitutions involved in study and motnotoring of migration.




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    .currentaffairsindia.infoP...Pmigration- types - causes-and-conse8uence