The Telegraph
Tuesday , July 6 , 2010
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Worker crunch throws realty deadline off track

A severe shortage of construction hands has thrown timelines of real estate projects in and around the city out of kilter, triggering the threat of a price rise.

“We are faced with a shortage of 30 to 40 per cent of skilled and semi-skilled labourers, leading to delay in handing over possession of properties to the customers, besides affecting the quality of construction. This could trigger a rise in project cost, to the tune of 15 to 20 per cent even,” warned Sushil Mohta, the managing director of Merlin Projects and a governing body member of realtor consensus Credai’s state chapter.

The crisis of hands has been precipitated by a number of factors, primarily the migration of construction workers to other states and west Asia, and the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) which ensures 100 days of wage-employment in a financial year to adult members of a rural household.

“While the NREGA is a factor, we are suffering more because of the high demand of Indian labour in west Asian countries, where the construction boom is back after the market meltdown. The boom is sucking hands out of south India and workers from the east are migrating to the south to fill the void, fuelling the crisis here,” said Pradip Chopra of the PS Group.

Like Mohta, Chopra, too, expressed the fear that the labour shortage would lead to an increased cost burden on the home buyer and delay in completion of real estate projects, big and small.

Credai has also expressed concern over the labour crisis and its associated implications in the form of decelerated pace of construction activities across states.

The real estate industry directly and indirectly employs about seven per cent of the country’s population with a major chunk constituting construction workers.

So, the issue of migration of labourers is bound to have a critical impact on the industry itself, the Credai brass feared, besides pushing property prices northwards at a time when the market was finding its feet after the downturn.

“This issue could snowball into a crisis and keeping that in mind, we have kicked off a pilot project in Pune to train construction workers on a war footing. We have also proposed to the government to let the labour cess to remain with the developers so that we can create a better social security network for the workers around the area of their employment to try and arrest the exodus,” said Santosh Rungta, the all-India president of Credai.

Wages have already increased 50 per cent during last year and may rise another 50 per cent during this year, predicted Pradeep Sureka, the president of Credai’s Bengal chapter.

“With advanced mechanised construction practices still at a nascent stage in our country, we are largely dependent on construction workers, and the hands shortage is leading to handover delays. We can absorb the burden only to a certain extent, after which, unfortunately, the consumer will suffer,” he lamented.

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