India Job Losses: For Mumbai’s Construction Workers, Slowdown Has Made Life Tougher
Sitharaman may have announced measures to spur growth but for casual workers in the informal economy, immediate relief is unlikely
Babasaheb Jadhav, 36, had been waiting for four hours in hope of finding work along with hundreds of others at the labour naka in Kopar Khairane, Navi Mumbai, a hub where construction contractors from Mumbai and its surrounding areas hire labourers. It’s already noon and he isn’t sure if waiting till the end of the day would help.
Jadhav lives with wife and three children in a Navi Mumbai slum mostly inhabited by construction workers. Things haven’t been good for the past 3-4 years, said Jadhav, who migrated to Mumbai about 15 years ago from drought-prone Jalna in Marathwada region of Maharashtra in search of a livelihood.
“I find employment only for three to four days in a month,” he said.
A mason, Jadhav could potentially earn up to Rs 1,000 for eight hours of work but irregular employment in India’s second-largest property market has made him desperate. “Sometimes, we have to settle for far less, but we take it up because something is better than nothing.”
His plight stems from the troubles of the real estate sector.
Developers are struggling to raise funds because lenders have turned selective after a liquidity crunch triggered by the surprise defaults at IL&FS Group in September 2018. That, coupled with economic slowdown, stalled a nascent recovery from the disruption caused by Prime Minister Narendra Modi’s cash ban and a stricter housing law that armed homebuyers against frauds.
As many as 220 real estate projects, with 1.74 lakh homes and worth Rs 1.77 lakh crore, are “completely stalled” in the top seven cities of India, according to property consultant Anarock.
Some construction companies have started cutting corners by employing fewer workers, said Rajesh Prajapati, committee member of Credai-MCHI, a real estate industry lobby. “Developers focus on project completion rather than new launches. This has led to a surplus of labourers in the market,” he told BloombergQuint. “Wages have been impacted by economics of demand and supply.”
The Indian economy has slowed with people buying less of everything from cars and appliances to biscuits. GDP growth tumbled to its lowest in 20 quarters in the three months ended March 31 and is expected to further decline in the June quarter of 2019-20. The Central Statistics Office is expected to announce the data on Friday.
Finance Minister Nirmala Sitharaman promised incentives after she rolled back the so-called “super-rich tax" for foreign investors and announced upfront recapitalisation of public sector banks to soothe nerves. But for casual workers in the informal economy, immediate relief is unlikely.
Panu Das, looking for work at the Kopar Khairane naka, said things weren’t that bad till Prime Minister Narendra Modi outlawed nearly 86 percent of the cash overnight in November 2016. “We used to find work regularly but since demonetisation it’s very difficult to find work,” said the 49-year-old who moved from Bihar to Mumbai about a decade and a half ago. “How will the poor like us manage?”
Women are at an even bigger disadvantage. While masons can earn Rs 1,000 a day, helpers and painters can earn up to Rs 600 and Rs 800, respectively, women labourers are paid Rs 500 on average irrespective of the work, said Sharda Sonar, 40, who came to Mumbai with her mother from Kalaburagi in Karnataka about three decades ago.
The recent troubles of the sector have only prolonged the slowdown. Numbers sourced by BloombergQuint from the Maharashtra Building and Other Constructions Welfare Board points to lack of employment, particularly in the suburbs.
As of March, of the 19,961 registered workers in Mumbai City, 16,997 were active—or had employment for at least 90 days in a year. Similarly, of the 17,813 and 36,899 workers registered in Mumbai Suburban East (Kurla-Mulund) and Mumbai Suburban West (Bandra-Dahisar), 4,198 and 2,988 were active, respectively. In the Thane region, which also covers Navi Mumbai, 14,002 workers were active against total registrations of 34,095.
The board didn’t officially respond to BloombergQuint’s queries on the trend. However, a government official aware of the details told BloombergQuint, on the condition of anonymity, that the number of workers has fallen due to slowdown in the market, labour migrating to other states or changing their sector.
Rajkumar Jaiswal, president of Maharashtra Building and General Labour Union, agreed. “There’s a slowdown in the sector,” he said, adding many workers have moved to Karnataka and Tamil Nadu.
According to Rohit Poddar, managing director, Poddar Housing and Development Ltd., the slowdown and credit crunch in the real estate sector have affected pace of construction in the residential market, decreasing job-creating opportunities. “It has directly affected the business of the construction material industry as well.”
“Giving residential real estate an industry status will change the situation of liquidity in the market as it will imply ease in provisioning norms for lending money,” he said. “It will increase the limit for banks to lend money on a cheaper rate to the sector and eventually result in improved fund supply for the sector.”
A long-standing demand, it wasn’t fulfilled in the budget.
New Skills Needed
Niranjan Hiranandani, co-founder of the Hiranandani Group, said developers are opting for less labour-intensive processes.
“At ongoing projects by Hiranandani Group companies, we have adopted technology so that our slabs are being cast at a quicker rate,” he said. “We are completing construction of buildings earlier than estimated, with quality control being fully maintained.”
“So, the jury is still out on whether it is the slowdown that impacts quantum of work; or smart work that completes it quicker,” he said. “Or if upskilling is an ideal way of providing alternative to downtime for human resources in real estate construction.”
Not Eligible For Relief
Casual labourers working in the informal sector can get access to 29 welfare schemes for a year through the Maharashtra Building and Other Construction Worker’s Welfare Board. But a large number of construction workers can’t access these benefits.
That’s because of their inability to find work for 90 days in a year, said Anil Jadhav, in-charge of Kopar Khairane branch of Maharashtra Majdoor Sanghatana—a labour rights organisation. The threshold is stipulated under the Building and Other Construction Workers’ (Regulation Of Employment and Conditions Of Service) Act, 1996. “The government must enable their inclusion in the organised sector,” he said.
Still, the scheme also doesn’t promise a fixed wage. And Babasaheb Jadhav doesn’t expect anything to change soon. “Every day is a new struggle that we have to face.”