Recently, Larsen and Toubro Chairman and Managing Director, N. Subrahmanyan, voiced growing concerns over labour shortages in the Construction sector.

Status of India’s Construction Sector

• Growth: Construction is the fastest-growing sector in India, contributing 9% to the national GDP and projected to reach $1.4 trillion by 2025. By 2030, around 3 crore workers are expected to be employed in the sector.
• Structural Challenge: However, concerns over labour shortages have been raised, notably by Larsen and Toubro Chairman N. Subrahmanyan, citing reluctance to relocate due to welfare schemes. 
  • This explanation, however, oversimplifies the deeper structural challenges faced by construction labourers.

Challenges Faced by Construction Workers

• Mobility Challenges: The fragmented employment landscape in the sector heavily relies on migrant labourers, who face challenges such as job insecurity, frequent relocations, and inconsistent access to welfare benefits.
  • Despite the BOCW Act, 1996, which aims to protect their rights, many workers struggle to access welfare benefits.
• Bureaucratic Apathy: ₹70,000 crore collected as cess by State Construction Boards remains underutilized due to bureaucratic inefficiencies.
• Documentation Issues: To access welfare benefits, workers must provide identity proof, date of birth proof, and residence proof. 
  • However, the migrant nature of their work means many lack permanent addresses, making document procurement difficult.
• Certificate Requirement: A 90-day work certificate is required for registration, but employers are often reluctant to issue it. 
  • While some states allow self-certification or trade union verification, the verification process remains inconsistent, making it difficult for workers to secure necessary documentation.
• Unutilized Funds: States collect a 1-2% construction cess under the BOCW Act, yet a 2023 Parliamentary Standing Committee report revealed that 75% of funds remain unspent due to:
  • Fragmented worker databases
  • Inconsistent verification protocols
  • Cumbersome registration processes
• Seasonal Vulnerabilities: Heat waves and pollution bans severely impact employment.
• Delays in Payment: Direct benefit transfers (DBTs) delayed despite legal provisions.
• Poor Infra: Lack of digital infrastructure hampers rapid fund disbursement.
• Inter-State Migration Challenges: Welfare benefits are non-transferable across states. Example: A worker registered in Haryana loses access to benefits upon moving to Delhi. 
  • This lack of portability discourages worker registration, leaving them financially vulnerable.

Way Forward

• Unified Identification System: Establish a centralised welfare database, similar to the One Nation One Ration Card scheme, for inter-State portability of benefits.
• Linkage: Link BOCW registrations to UAN (Universal Account Number) on e-Shram, ensuring seamless access to entitlements regardless of location.
• Digital Infrastructure: State governments should adopt open-source digital platforms to streamline welfare accessibility. A centralised portal with standardised workflows can:
  • Reduce administrative delays
  • Enhance transparency
  • Support Aadhaar-based automated verification
  • Enable real-time tracking of welfare disbursements
• Simplified Documentation: Relax verification protocols and allow alternative proofs for documentation. 
• Bulk Registration: Conduct on-site registration camps at large construction sites for bulk registration of workers. Reduce dependence on employer-issued certificates, ensuring accurate and accessible worker records.
• Skill Development: Robust skill development programs tailored to industry needs can enhance worker productivity and job retention.
• Safe Working Place: However, skills alone are not enough—ensuring safe and dignified working conditions is equally critical. Construction firms should commit to:
  • Long-term skill-building initiatives
  • Improved workplace standards
  • A more resilient and stable workforce

Conclusion

In conclusion, labour shortages cannot be addressed without acknowledging and resolving the systemic barriers to welfare access and employment continuity.

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