The report said India’s 46 per cent of agricultural workforce contributes only 18 per cent to the GDP and manufacturing is the only sector capable of absorbing unskilled labour at scale
The manufacturing and services sectors’ jobs are six times more productive than agricultural roles, according to the report published by the foundation of economic development. This trend highlights the sectors’ potential to transition the workforce into higher productivity roles.
The report, as quoted by ANI, stated that manufacturing is the only sector capable of absorbing unskilled labour at scale. On the other hand, India’s 46 per cent of agricultural workforce contributes only 18 per cent to the GDP.
The industrial clusters which serve as hubs for manufacturing jobs, often require more labour force than surrounding towns and villages can provide. However, the absence of adequate housing for workers near these clusters has become a significant obstacle.
This has resulted in labour shortages and reduced productivity as it not only affects domestic manufacturing efficiency but also hinders India’s global competitiveness in manufacturing exports, restricting job creation and economic growth.
The existing worker housing is informal which consists of unauthorised alums or substandard settlements that fail to meet the quality and scale required, the report highlighted. These poor living conditions discourage workers from relocating closer to industrial clusters.
Private sector players make efforts to address this gap but they are also hindered by regulatory barriers like rigid zoning which restrict the construction of worker housing. It further said complex building bye-laws drive up costs and delay projects, and high operational charges, including GSP and commercial property rate, discourage investment.
To overcome these challenges, the report advocates for various reforms aimed at unlocking the potential of manufacturing. It also proposed allowing mixed-use zoning to enable worker housing in all areas, simplifying building bye-laws to lower costs and speed up projects, and exempting worker housing from GST and other commercial property taxes.
However, the report also argued that these steps would encourage private sector investment in worker housing. It suggested classifying worker housing as critical infrastructure, with government support through subsidies for construction and rental vouchers for workers.