Amid vast unemployment, India's biggest job creator short of labour
India’s construction sector, the country’s biggest job
creator, is facing a shortage of workers amid a record increase in national
unemployment.
That’s because internal migrants, who comprise
about half India’s workforce, are choosing to return to their villages after
facing hunger and weeks of uncertainty in cities because of the coronavirus
lockdown. Prime Minister Narendra Modi’s government this week permitted state
governments to transport their citizens across state borders, around the same
time it allowed certain economic activities to resume while extending most
stay-at-home rules through May 17.
“While utmost effort is being made to keep the
workers in safe and hygienic conditions, along with food provision and masks
allocation, the workers are not ready to return to the sites and have been
longing to go back to their native places,” said Sandeep Runwal, managing
director at Mumbai-based Runwal Group. The laborers want “to be with their
families as uncertainties rise around the lockdown,” he said.
The challenge of retaining staff despite 12.2
crore people losing their jobs in India last month shows how difficult it will
be for Modi to restart Asia’s No. 3 economy, where the bulk of the workforce
comprises so-called informal labour that are denied security and benefits.
Economists predict a rare contraction in national output and have urged Modi to
ensure food and a basic income for the poorest Indians.
Runwal doesn’t expect the workers to return anytime soon. The two-decade-old Goodwill Developers is also facing a similar squeeze.
“We have not been able to start any construction activity and
it might take some time to re-start the process,” founder Hakim Lakdawala said
in an interview.
India’s construction sector has been under
pressure since late 2016, when Modi introduced DeMo, followed by the glitchy
roll out of a nationwide sales tax and a crisis in the shadow bank sector that
funds developers. The lockdown further choked cashflow and contracters were
unable to pay workers, according to Pankaj Kapoor, managing director at
property research firm Liases Foras. He predicts 20 lakh workers from Mumbai
will choose to return to their villages.
The Confederation of Real Estate Developers
Associations of India lists availability of credit and raw materials as other
impediments.
“Unless there is a resumption in the whole supply chain management of the industries feeding into the real estate sector, the process of construction will again come to halt in the next few weeks,” said Amit Modi, CREDAI president.
Source : The Economic Times