Context

• The construction sector is one of the fastest-growing industries in India, contributing approximately 9% to the national GDP and projected to reach $1.4 trillion by 2025.
• By 2030, the workforce in this sector is estimated to be around 3 crore workers, however, concerns regarding labour shortages have been raised, notably by Larsen and Toubro’s Chairman and Managing Director, N. Subrahmanyan.
• While he attributes this issue to workers' reluctance to relocate due to welfare schemes, the problem is far more complex.
• The structural barriers that hinder the mobility and security of construction workers must be addressed to ensure a stable and skilled workforce.

Challenges Faced by Construction Workers

• Fragmented Employment Landscape
  • The construction industry in India heavily depends on migrant labourers who face significant job insecurity, frequent relocations, and inconsistent access to welfare benefits.
  • Despite the presence of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) (BOCW) Act, 1996, which aims to safeguard their rights, many workers struggle to access the benefits it promises.
  • One major challenge is the underutilisation of welfare funds.
  • Although State construction boards have collected around ₹70,000 crore through cess contributions, a large portion remains unused due to bureaucratic inefficiencies.
• Documentation Barriers
  • A primary obstacle to welfare access is the requirement of extensive documentation.
  • Construction workers, many of whom are migrant labourers, often lack permanent addresses, making it difficult to obtain identity proofs, birth certificates, and residence documents.
  • Moreover, they need an ‘employment certificate’ proving 90 days of work per year, which is typically issued by employers.
  • However, many contractors are either unwilling or unable to provide these certificates, leaving workers unable to prove their eligibility for welfare benefits.
• State-Level Discrepancies and Welfare Gaps
  • While State governments collect a 1-2% construction cess under the BOCW Act, a 2023 Parliamentary Standing Committee report found that approximately 75% of the funds remain unused.
  • The reasons include fragmented worker databases, inconsistent verification protocols, and cumbersome registration processes.
  • Seasonal employment disruptions further aggravate these issues.
  • For example, during heat waves or air pollution-related construction bans in North India, lakhs of workers lost their livelihoods.
• Inter-State Migration
  • Additionally, inter-State migration poses another major challenge.
  • Since welfare schemes are not interoperable across States, a worker registered in Haryana loses access to benefits upon moving to Delhi.
  • This lack of portability discourages workers from registering for these schemes altogether, worsening their financial vulnerability.

Proposed Solutions

• A Unified National Labour Identification System
  • A centralised welfare database similar to the One Nation One Ration Card scheme could ensure inter-State portability of benefits.
  • By linking BOCW registrations to UAN (Universal Account Number) on the e-Shram portal, workers could access their entitlements irrespective of location.
• Digital Public Infrastructure for Welfare Disbursement
  • State governments should adopt open-source digital platforms to streamline welfare access and disbursement.
  • A centralised real-time tracking system can minimise bureaucratic delays and improve transparency. Aadhaar-based authentication could further enhance efficiency.
• Simplification of Documentation Requirements
  • To ease registration, governments should accept alternative proofs and relax verification norms.
  • Conducting bulk registrations at construction sites would also facilitate greater coverage, ensuring that large projects maintain accurate worker records.
• Investment in Skill Development
  • Addressing labour shortages requires not just an increase in workforce numbers but also a skilled and stable workforce.
  • Implementing robust skill development programs tailored to industry needs will enhance worker productivity and job retention.
  • However, skills alone are insufficient, ensuring safe and dignified working conditions is equally vital.
  • Construction firms must commit to long-term skill-building initiatives and improved workplace standards to create a more resilient workforce.

Conclusion

• India’s construction industry cannot resolve labour shortages without tackling the systemic barriers that workers face.
• A fragmented employment landscape, documentation challenges, and lack of inter-State welfare portability hinder worker stability.
• By implementing a unified welfare system, leveraging digital technology, simplifying documentation, and investing in skill development, the sector can create a more inclusive and efficient workforce.
• Only through these measures can the construction industry continue to grow while ensuring the well-being of its most vital asset, its workers.