From pineapple farms in Vazhakulam to plywood factories in Perumbavoor, migrant workers have become the invisible engine of Kerala’s economy. Their sudden absence has set off a crisis that the state can no longer afford to ignore

What happens when workers go home

At the Pineapple city of Vazhakulam, Baby John, president of the Pineapple Growers Association, was busy directing migrant workers on his farm in Hindi thick with a Malayali accent. “Bhai… Yeh sab leke gaadi mein daalo…,” he said as the workers followed his instructions.

Where 100 workers are needed, only 40 show up. With migrants from West Bengal and Assam returning home ahead of the elections, an acute labour shortage has dealt a heavy blow to farmers who lack even the hands to harvest their produce. Pineapples are left to over-ripen, unharvested in the fields. The problem stretches well beyond agriculture; restaurants are either shutting down or shrinking their menus, and construction contractors are missing deadlines across the state.

The crisis has reignited a debate sparked by a controversial statement from chief minister VD Satheesan, who now also holds the finance portfolio. Satheesan argued that Kerala was facing a crisis of ‘reverse remittance’, and he used the term to cover two distinct phenomena: The exodus of youngsters to Europe for education, and the wages that migrant workers send back to their home states. He went so far as to say that migrants were ‘siphoning’ money away from Kerala’s economy. The first argument has merit. The second, however, is contradicted by the unharvested fields of Vazhakulam.

Chartered accountant and financial expert Bijoy M Poulose says he was surprised when Satheesan described the money migrant workers send to their families back home as ‘reverse remittance.’ “A person receives wages in compensation for the services they provide,” he explained.

“In agriculture, manufacturing, or any other sector, these workers invest their labour. As a result, assets and services are created in Kerala. When they receive compensation, an equivalent value addition occurs in our state. Without that labour, value simply vanishes, much like an unpicked crop rotting in the field.”

Poulose adds that remittance, in its conventional sense, refers to money earned abroad and sent home. Reverse remittance, by extension, refers to money flowing out of a country into foreign economies. “This term is relevant when money flows from a country’s foreign exchange reserves abroad,” he said.

“When money moves from Kerala to Bengal or Assam, it is merely a transfer of rupees between states, not a loss of foreign currency for the country.”

He identified two legitimate forms of reverse remittance: When foreign nationals residing in a country send earnings back home, and when citizens send money abroad for education, medical treatment, property purchase, or business investment. Interstate wage transfers fit neither category.

Poulose did agree with Satheesan on the student exodus, parental funding for overseas education qualifies as reverse remittance, particularly when students fail to find work abroad and cannot repay it themselves. Asset liquidation before acquiring foreign citizenship compounds the drain further. But the exact scale of this outflow remains largely unquantified.

Benoy Peter, executive director at the Centre for Migration and Inclusive Development, says that the migrant worker’s contribution cannot be assessed through wages alone, it must be understood through the lens of the local economy.

“Take Perumbavoor,” he said. “Almost the entire town depends on the plywood industry, from fuel pumps and restaurants to truck drivers and loaders. The industry, which generates exports worth millions, is essentially run largely by migrant workers. It is they who keep the town alive, even after dark.” There is a perception that migrant workers only spend on basic necessities like dal and rice and send everything else home. That is simply not true,” he said.

The notion that migrants spend only on basic necessities like dal and rice, is, he says, simply wrong. Migrants spend roughly one-third of their total earnings within Kerala itself, an estimated Rs 20,000 crore a year on travel, food, and gadgets. Most of that money flows directly into Malayali pockets.

The state govt also collects GST on every purchase they make. Meanwhile, they provide highly productive labour at wages significantly lower than what local workers would demand.
“Today’s crisis makes this plain,” said Benoy.

“There is no point having pineapples in Vazhakulam if there are no workers to harvest them and load them onto trucks. They will simply rot.”That is exactly what is happening on Baby John’s farm. Without adequate workers, fruits over-ripen. “A-grade fruit drops in value from Rs 60 to Rs 10,” he said. “And if we don’t remove the fruit from the plant on time, it damages the plant’s growth as well.”

Those who left for Bengal and Assam are unlikely to return soon. Many want to sort their documents and access govt benefits given the uncertain political climate. Workers from Odisha and Jharkhand, who typically head home in summer and return by mid-July, offer some hope. “We’re advising farmers to take a one-year break before starting new crops, to manage until things stabilize,” said John.
For an economy built on remittances flowing in from the Gulf, Satheesan’s theory may hold when applied to students heading to Europe. But down on the farm, the arithmetic is far simpler: No workers, no wealth.

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