The return of migrant labourers to their hometowns due to Covid-19 pandemic had created a vacuum in India's real estate and construction sector. Several projects in the metro cities were held back owing to the exodus.
The return of migrant workers will be the key in reviving real estate
The return of migrant labourers to their hometowns due to Covid-19 pandemic had created a vacuum in India's real estate and construction sector. Several projects in the metro cities were held back owing to the exodus. States that have been hit the hardest by the exodus are Maharashtra, Gujarat, Karnataka, Kerala and Delhi. There has been a massive labour shortage plaguing the construction sector and there is tremendous uncertainty on when these migrant labourers will return.
According to Mr. Rajan Bandelkar – President, NAREDCO West and Convener, Housingforall.com, "Around 30-35% of the migrants never left MMR. Of the rest, 15-20% has already returned. Many construction workers are cyclical migrants and return to their villages before the monsoon to help sow the rabi crop. We estimate that the remaining construction workers will return by Dussehra or Diwali."
This is a tough time for the industry, but on the ground, several developers are trying to do their bit. Many branded developers and industry bodies are stepping forward with plans and policies to deal with this unforeseen situation. "The developers and contractors are trying to give as many incentives as they can to the migrant workers such as flight tickets, arranging private buses, boarding facilities and medical insurance, in addition to weekly medical check-ups at the site," says Mr. Bandelkar.
With the economy now rebooting, the industry along with the Government need to find ways to meet pent-up demand due to an acute shortage of workers.
Expecting a steady return of the migrant workers, Mr. Bhushan Nemlekar - Director, Sumit Woods Limited said "Reports of migrants returning to their work cities gradually suggest that economic activity may return to normal sooner than we might have initially feared. The skilled work or businesses that these workers have been engaged in for many years in cities give them much higher incomes against what is available in villages. In addition, fear of loss of jobs, especially for those who have worked in a particular organization for many years, will prompt many to return back."
Mr. Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory said "If the construction activity begins in full swing as migrant workers return back, it will have multiple advantages as it brings wages to labourers, cash flow to developers, much need credit growth for banks and resumption of economic activity in the country. The government needs to now look at targeted relief measures for the real estate sector to ensure the industry continues to remain a leading employment generator and the effect of the lockdown do not further hamper the prospects of this sector,".
The real estate sector, heavily dependent upon migrant labour from other States, sees their return to work as a major factor for its revival.