Housing India’s Construction Workers

Anuj Puri, Chairman – ANAROCK Property Consultants

The construction sector is one of the largest employment generators in India, and the country will need approximately 76.5 million workers in the building, construction and real estate sector by 2022.

Despite it being a job creation engine for people from the economically weaker section of society, the basic working conditions of construction workers have been long ignored.

Migrant workers are the most vulnerable – they are more often than not forced to work under inhuman conditions, and are simultaneously bereft of any real bargaining power.

Under the labour laws, migrant construction workers are entitled to housing and other social security benefits apart from minimum wages, overtime payments and weekly offs.

However, on the ground, the implementation of this clause of the labour law has been abysmal. In far too many cases today, it can be said that the bottom line literally consumes the bottom of the pyramid.

Without a doubt, a more humane approach needs to be taken towards migrant construction workers. It has previously been suggested that the amount collected through construction cess can and should be used for providing rental accommodation to migrant workers.

At present, around Rs. 20,000 crore collected through construction cess is lying unused.

It also should be the responsibility of the developers to ensure that the working conditions for their construction workers meet some basic standards. Providing decent makeshift accommodation, crèches for their children and proper sanitation facilities should be the part of their corporate social responsibility programme.

As a matter of fact, quite a few developers do take this seriously and provide such facilities – but they are far outnumbered by those who don’t.

This brings up a pertinent question of whether any of India’s larger construction companies are following international standards and providing accommodation to construction workers.

Certainly, there are both national and strong local developers in some Indian cities who offer construction workers free schooling for their children, basic medical support and also very rudimentary temporary housing for their use during the construction process.

However, saying that any Indian developer is following international norms on this front which are on par with those prevailing in countries with strong workers’ unions may be a bit of a stretch.

While the finished product, especially in the luxury housing segment, may match or even surpass global norms in some cases, the process of constructing such spaces is another matter altogether.

Clearly, the fact that so much cess lies unutilized strongly suggests that there aren’t many facilities provided to construction workers in India, or any formal delivery structures in place to ensure that they receive them.

Also, while there may be cases where a contractor structures pay packages with a certain component of the workers’ wages intended to compensate for their accommodation expenses, whether the workers actually use that component for the intended purpose is beyond anyone’s power to influence.

The Government and enforcement bodies should ensure that the tenets of the labour laws drafted to protect migrant workers are strictly and conscientiously enforced. These workers are an important part of the entire eco-system of the real estate industry – and, therefore, the economy as a whole.

On a larger note, affordable housing in general has always been an issue in India. Till a few years ago, none but smaller local developers wanted to touch it as larger players were worried about getting ‘tainted’ with the ‘affordable’ brush.

That has changed significantly, with the Government’s new policies literally making affordable housing the new poster boy of Indian real estate. Literally, everyone wants to get into the game.

However, developers obviously see no real benefit in building formal housing specifically for their construction workers. To begin with, this workforce category is largely transient and developers’ locations keep changing too.

Secondly, as construction workers are basically daily wage labourers, it is next to impossible for them to get home loans even for extremely low-cost housing. Nor, given their nomadic existence, is there any benefit to them in anchoring themselves to one particular area or even city.

What would probably work best is if at least some developers focused more on low-cost rental housing schemes in the cheaper areas of the towns and cities they are most active in.

Such housing could be given out on low rents to migrating construction workers for the duration of the project’s development, and to other needy sections of society after that.

However, even for this, the Government would have to come out with special incentives for builders who are willing to create such low-margins products.

While a policy making it mandatory to provide housing to construction workers while they are employed at a site makes technical sense, implementing it would be a gargantuan task fraught with insurmountable obstacles and complications.

Such solutions are far likelier to see the light of day in a socialist or communist political environment. For now, there is definitely an impasse when it comes to a workable solution for providing accommodation to construction workers in India.

he tenets of the labour laws drafted to protect migrant workers are strictly and conscientiously enforced. Construction workers are an important part of the entire eco-system of the real estate industry – and, therefore, the economy as a whole.

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