Gujarat realty: Addressing the issue of labour shortage
Feb 01, 2014
Source : The Times of India

 

AHMEDABAD: The real estate market of Gujarat is undoubtedly growing at a fast pace but it is not free from concerns like labour shortage. The realty sector in the state is by and large dependent on the migrant work force. For example, while masons from Jharkhand, Bihar and Odisha rule the state’s construction works, carpenters are mainly from West Bengal. Those from Andhra Pradesh have a substantial presence in all categories while plumbing work is the forte of local people. Hence, if there is slow rate of migration, the real estate industry will be obviously affected and actually, this is what has happened of late.

Jagdeesh Yadav, a labour contractor from Jharkhand who operates in the Ahmedabad market, says, “Construction workers from outside outnumber the locals in the region. However, with the launch of schemes like MNREGA by central government, many of them are heading back towards their home and hence, labour shortage is becoming an issue of concern in the construction world.”

Analysts tracking the property market in this part of the world, agree that given the present rate of growth in the business, the sector is also grappling with the issue of lack of experienced professionals. Since the realty sector is slated to increase threefold in the next decade, the situation is expected to become more challenging. A lot of developers are finding it hard to grapple with the increase in both size and scope of the projects.

As per a rough estimate, the supply of skilled and semiskilled labour force will barely keep up with the pace of growth and will fall short by 25-30 per cent, keeping in mind medium-growth scenario. However, in the high-growth scenario, the shortage will be to the tune of 70 per cent over the next ten years. So basically, man power (skilled, semiskilled or unskilled) is an issue of concern for the Gujarat real estate at present, and will continue to be so, in the coming years unless some solutions are being worked out. Further, the problem with unskilled manpower has become more acute with central government assuring minimum days of wages under various schemes. Owing to this, the need to migrate to cities for work has reduced.

Besides, hundreds of housing projects by private builders, big-ticket government projects such as flyovers and expansion of national highways, and other public construction projects also employ a huge workforce. Thus, contractors are finding it difficult to get workers who can even finish the incomplete projects on time.

Manan Choksi, regional director, RE/MAX MGM, says, “Labour shortage is affecting the real estate development in Gujarat to a very large extent. Labours’ migration at a slower rate is largely affecting the project execution. Hence, Gujarat should aim to provide better facility to lower income group so that people are motivated to migrate and settle down here. Also, the issue of stability should be addressed as it is seen that often labourers migrate back to their villages when they don’t find work here.”

Sachin Sandhir, managing director- South Asia, RICS, laments that even the retention of trained professionals within the sector in the country is a challenge they either shift industries in search of better employment prospects or relocate due to international projects. Such capacity constraints, along with regulatory hurdles, financing and liquidity constraints, contract and project approval delays etc., continue to plague the efficiency of the sector and need to be addressed as soon as possible.

“The lack of quality talent within the built environment has affected the image of the sector to a fairly large extent. The beginning of an image makeover for the sector lies in increased professionalism. There is a pressing need to adapt and learn new ways to do business,” says Sandhir.

Thus, the need of the hour is to find a way out since urbanisation and growth of the sector is not just desirable but inevitable in the times to come. Further, to ensure timely delivery of projects, skilled labour force, professional teams and experienced professionals are necessary. As the supply of experienced professionals will increase, this will in turn reflect in greater transparency and timely delivery of projects.

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