India’s biggest job creator industry, the construction sector, is facing an acute shortage of labor while there’s record unemployment observed on the national level.
Mumbai| India’s biggest job creator industry, the construction sector, is facing an acute shortage of labor while there’s record unemployment observed on the national level. The primary reason for this problem is the migrant workers, who account for almost half of India’s workforce are returning back to their villages after some restrictions have been often in the national lockdown. The laborers have chosen to return home because of the hunger and uncertainty they are facing in cities. The central government decided to allow the movement of migrants across the states this week after restricting any inter-state movement for almost 40 days. With that, the government also allowed some economic activities to function while extending the lockdown till 17th May.
As reported by the Bloomberg, Sandeep Runwal, managing director at Mumbai-based Runwal Group, said, “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 to be with their families as uncertainties rise around the lockdown.”
Looking at the challenges to retain the staff despite 122 million people losing their jobs in India last month shows how difficult it’s going to be for the Prime Minister of Asia’s 3rd largest economy to kickstart its functioning, where the big chunk of the workforce comprises of these migrant laborers.
Mr. Runwal says he doesn’t expect the migrant workers to return soon.
Goodwill Developers, the two-decade-old company is facing the same problems. Founder Hakim Lakdawala, in an interview, said, “We have not been able to start any construction activity and it might take some time to re-start the process.”
The construction sector hasn’t been doing well since 2016 after the sudden ban on old currency notes was imposed. The GST that followed later and crisis in the shadow banking sector that funds these developers only increased the problems for the construction industry. Now the lockdown that has almost completed 45 chocked the cash flow and contractors could not pay the laborers, Pankaj Kapoor, managing director at property research firm Liases Foras said. He also predicted that almost two million laborers will be moving back towards their homes from Mumbai.
Amit Modi, the President of Confederation of Real Estate Developers Associations of India (CREDAI) said, “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.”