Labour shortage: Elections-2014 could be one of the reasons!
Labor shortage is one of the rising concerns of the construction industry, and the 2014 general elections will only make things worse for the housing sector as lakhs of workers head back to their natives to exercise their franchise. Experts are of the notion that post 2014 elections, shortage of labours will increase the burden on developers delaying the delivery of more than 1 million homes in the country.
Thousands of rural workers (basically from Bihar, UP, Chhattisgarh and Madhya Pradesh) migrate from small cities to work in India’s boom towns, where construction of housing units for the middle-class is on a spree. However, such workers head back to their respective villages during elections, to vote or get their hands on the largesse presented by political parties.
Grim Situation
State elections has already wracked-up the construction cycle and the general elections are only going to deteriorate the situation. According to property consultants, the election fervour is likely to send back a large number of workers to their towns to cast their votes, especially in MP and Bihar. This will contribute to 25% shortage of labor in the country and make matters much critical.
Along with the developers, a labour vacuum will take a toss on the buyers as well. Though temporary, the grim situation will lead to a slowdown in the realty sector and projects that are running behind schedule will be adversely impacted. Market experts suggest that more than 930000 under-construction housing units in the country will hold-up by 18 months due to lack of labour supply. This will compel the buyers to take possession of the apartments and flats at a much later date.
Impact on real estate
The construction industry in the country is slowing down due to lack of labors of almost 40% due to a number of reasons and is expected to hit a high over 60% in the next few years. Furthermore, the MNREGA program of the government has sent a number of labours back to their home towns where work is available at decent wages.
Shortage of workers contributes significantly towards construction overloads. Delayed delivery has crippled the real estate sector of the nation, irking clients. According to JLL reports, around 25% of the scheduled supply is running behind schedule. In terms of delivery of housing units in 2013, the performance of Delhi-NCR has been analyzed as the worst, in comparison to other cities of the country.
