India Biannual Construction Review 3Q/4Q 2023
Labour rate trends
Note: All the rates represent basic rates in INR/day and don’t include any dearness allowances, uplifts for abnormal working conditions, contractor margins or taxes. Rates have been collated by Gleeds.
Note: All the rates represent basic rates in INR/day and don’t include any dearness allowances, uplifts for abnormal working conditions, contractor margins or taxes. Rates have been collated by Gleeds.
Note: All the rates represent basic rates in INR/day and don’t include any dearness allowances, uplifts for abnormal working conditions, contractor margins or taxes. Rates have been collated by Gleeds.
Note: All the rates represent basic rates in INR/day and don’t include any dearness allowances, uplifts for abnormal working conditions, contractor margins or taxes. Rates have been collated by Gleeds.
Note: All the rates represent basic rates in INR/day and don’t include any dearness allowances, uplifts for abnormal working conditions, contractor margins or taxes. Rates have been collated by Gleeds.
Note: All the rates represent basic rates in INR/day and don’t include any dearness allowances, uplifts for abnormal working conditions, contractor margins or taxes. Rates have been collated by Gleeds.
The construction industry in India is a vital pillar of the nation's economic growth and labourers are its backbone. As this sector undergoes rapid urbanisation and experiences an ever-increasing demand for infrastructure development, the workforce within real estate and construction has swelled to nearly 71 million employees in FY2023, up from 63.98 million the previous year.
In light of this industry transformation with increased innovation and digitisation, the concentration of job opportunities remains restricted to major urban cities, leaving a heightened demand for a large supply of skilled and semi-skilled labour. This creates a notable wage disparity for skilled and semi-skilled labourers. The recent Gleeds survey observed that 85% of respondents reported difficulty sourcing skilled labourers.
The expanded availability of unskilled labourers and the persistent shortage of skilled counterparts present a substantial challenge to the Indian labour market. Without sufficient vocational institutions, the workforce acquires skills at a glacial rate. With the expansion of developments into non-metropolitan or rural areas, the supply gap is likely to reduce and the labour market will stabilise, settling wage rate disparities.
The government has initiated various skill development programmes to ensure a skilled and competent labour force. Furthermore, the government has taken a multifaceted approach to improve the construction labour market, including providing subsidies for raw materials, facilitating access to credit, and fostering private sector investment in infrastructure projects. These initiatives collectively work towards ensuring the industry's continued growth and vitality while addressing the challenges faced by the labour force.
Addressing the remunerations and welfare, India has witnessed significant labour law reforms aimed at simplifying compliance, promoting ease of doing business and enhancing labour welfare. These reforms, such as the consolidation of labour codes and the introduction of fixed-term employment, have also had implications for labour rates.
The Indian government also periodically revises minimum wage rates, most recently in April 2023, to alleviate the burdens of the cost of living.
When asked by what percentage labour costs have increased from 1Q FY2024 to 2Q FY2024, nearly three-quarters of respondents said that prices have increased by more than 1–5%.
Just over half of survey respondents said that labour supply improved between 1Q FY2024 and 2Q FY2024, although 85% said it is challenging to source skilled labour. Reduced availability of skilled labour can be due to a lack of social security, benefits and other amenities for migrant skilled labourers.
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