A paper published by Indian Council for Research on International Economic Research (ICRIER) says that given the close proximity in which construction workers work (and often even live), the chances of the virus spreading at worksites are high. According to the paper “COVID-19 and the State of India’s Labour Market,” the construction sector will struggle to resume activity as it grapples with supply chain disruptions, labour shortages due to unavailability of migrant workers and sharp decline in income and therefore demand.
Construction accounts for 12.14% share of total employment out of which 83.68% is casual labour. Regular formal labour accounts for just 1.6% of the total labour in the sector. 27.72% of the labour employed is not literate and 35% of the total labour employed by the sector is below Primary level literates or total illiterates.
The construction sector emerged as an important source of employment generation in India between 1999-2000 and 2011-12, growing annually at over 9%. Significantly, the employment boom in construction was largely a rural phenomenon with rural construction employment growing annually at 12%, compared to just 5% in urban areas. Expanding market for rural construction (in particular rural private residential construction) is mainly attributed to rising rural wages and falling real price of cement during this period.
However, in the period after 2011-12, the share of employment in construction has remained sluggish at approximately 12%. The tepid contribution of this sector to employment after 2011-12 is not just a consequence of the financial difficulties faced by it in the wake of the National Banking Financial Crisis, but also the sluggish growth of rural wages since 2014-1515. For a sector that was already under stress, the pandemic and lockdown are likely to worsen matters, says the paper.