How Migrant Exodus Has Hit Construction Industry

How Migrant Exodus Has Hit Construction Industry

Mumbai: Some 120 million people have lost their jobs in the last eight weeks or so. A significant chunk of this are construction workers who also happen to be migrant labourers. At last count, India had almost 60 million construction workers, and the construction sector contributes 7% of India’s gross domestic product (GDP). Will these migrant labourers and construction workers return to the sites they were working at? What happens if they do not return, or their return is delayed? To discuss this, we spoke to Niranjan Hiranandani, the managing director of the Hiranandani Group, a leading Mumbai-based realtor. He is also the president of the Associated Chambers of Commerce (ASSOCHAM).

Edited excerpts:

What is your estimate of the number of construction workers who are migrant labourers who have left the sites they were working at?

More than 50% would now not be on the sites, and even the 50% that are on the sites, are actually wanting to go back home. So, I would say the numbers that would remain would be around 25% of what is needed. Most of the people are petrified of what has happened, they are scared, they do not know what has hit them. Not able to understand the COVID situation, they are fearing for their lives. I think somewhere down the line, the migrant labour has not been well treated--in terms of transport to take them back to their homes, or giving them the confidence of safety and security. They live in small crowded places. We did give them food in many cases.

In some of our sites we had more than 4,000 workers and although about 1,500 have left, we still have about 2,500, of which 1,500 are working. So, from that if you work out the guesstimate of what the situation is, I would consider that about 25% of the people will remain. If construction work is 15% of the employment potential of India, and two-thirds of them are out of work completely, about 10% of India’s working population is now out of work.

If you are saying that the entire industry is working with 25% capacity, which is likely to go down further as the lockdown lifts, then what does it mean for construction and real estate?

Well, there are two parts to it. The first part is, can we remove the fear psychosis that has been created? It is petrifying at the grassroots level because they really do not know what has happened. People asking them to wear masks, people who approach them wearing masks, sanitising the places, distancing--these have never happened before. And for these illiterate people, this is a very scary proposition.

Second, most of them have not been paid wages. Now when they have not been paid wages, they don’t come to Mumbai and Delhi and other places for eating food--food is available in the villages. What they do come for is income. Today, they do not have income, they did not have food in many cases. And so, I think they have become fearful. So, a lot of time will be taken for confidence to be restored so these people can come back.

Third, there is no answer to when it is going to get over, when they will open up, when the COVID virus will go away. If we are scared sitting in the safety of our homes, can you imagine what happens to people on the ground?

And last, which I think is horrible, is having to walk 1,000 km to go back home, with their children and babies in their arms, with no food and no money in their pockets. I think that is shameful. I think that is something that India should be ashamed has happened. Somewhere down the line, that was one thing I think was badly handled. I think the Prime Minister and the entire government machinery did a fantastic job about the lockdown and I am terribly impressed with the force and speed with which it was done. But I think they took a lot of time to understand the problems and the difficulties of the migrant labour.

I think now the Railways and the bus transport are starting, and I hope migrants will be taken care of and taken to the safety of their homes as they want to be.

If they had the income security and sense of safety, then perhaps they would not have left in the first place. Is that right?

Absolutely. I think if we could not give them the confidence, we may have given them some food. But what was it? Did we explain to them what COVID is, did we explain to them how long the lockdown is going to take, did we tell them you will come back to your job on such and such date or at such and such time? And what would happen in the interim period or was this going to go on forever? There were so many people who were not being given food. So, it is not about the ones who were there on our site, or some of the other places which the government was taking care of but the so many other places where they were not getting everything. So, I think a combination of these two.

You know, once the flood starts, so many people from UP, so many people from Bengal, so many people from Bihar start moving, then it is like a tide; you get carried away. So even those who had the safety and security were given fear. “Arre aap wapas nahi chal rahe, yahan kya hone wala hai aapko pata hai?” So, all those discussions that took place between the workmen--I have a driver who lived in safety of my house, in my building, while the rest of my servants and other people were quite happy because they were looked after medically and otherwise, but one of them was in touch with one of their relatives who actually took a special transport of five persons in a vehicle and left for UP in the middle of the night, without even informing us. So, I think that was the kind of fear that sometimes comes about and the herd mentality, once it starts it becomes a wave.

One is the government obviously did not manage the communication, but the construction industry and the builders are also at fault for not giving the right amount of sense of safety on the site.

Yes, I agree with you. Obviously, we did not do enough. We looked after those people who belonged to our industry--I think a majority of the people were fed by the industry, a majority of them sanitised. But yes, you are right. Ultimately, we could not give the necessary confidence because we ourselves did not know how long everything was going to be locked down. So, we really did not know and COVID is a new substance, which I do not think any one of us is very aware about. And yes, you are right, we could not give confidence to the workmen, I agree with you.

We are talking about this in the context of getting back to work, of economic activity resuming, for which people have to come back. So how is the industry going to get those people back?

So, basically the first stage of working will happen in the agricultural areas where people will actually work on the farms for some time. They may be underemployed but they can be employed--there is a lot of farming work that takes place in June and July in the northern and western regions. So, in the beginning, two months according to me, June and July, will disappear. Probably another half of them will be employed under MNREGS. So, my gut feeling is that by August or September, you will start seeing people come back to work, once the economy and other things are set back to work. But it all depends on the way the government phases the working process and I think that is going to be extremely important.

The Prime Minister’s vision, which he has explained very clearly, and the aggressiveness of the stimulus package have gladdened my heart. We have been asking for it for a long time and there was absolute silence. [In his last address to the nation], he gave a clarion call to the entire fiscal issue and monetary issues of the government and the…..

Do you know how the package is getting transmitted to the construction industry?

Nobody knows yet. But we expect that the Finance Minister will make a statement. Hopefully, the construction industry that employs a large number of people and contributes to the GDP, will also get covered, and I am sure it will. But you know it is not only about construction--it is about the entire gamut of business and commerce that is going to be important, including logistics and transport. It all depends on the vaccine, remember. Until that does not come up, we are never going to be 100% OK. Too many uncertain factors, but I do believe that with a good stimulus package, good monetary policy and a clear-cut statement of how we are going to look after the people of our country and how we are going to put the economy back on track has to be clearly defined, very quickly. And that should be communicated, and we have the best communicator in the world. The Prime Minister is the best communicator, I have not yet seen somebody in this country carry the confidence, which the Prime Minister creates in the minds of the people. And if I think, if that is communicated over a period of time as he is now doing on a regular basis, I think we can bring confidence back earlier.

[Editor’s note: The interview was conducted on May 13, 2020, before the finance minister’s press conferences explaining the details.]

What is your assessment of the upstream and downstream impact of construction not resuming at the pace it was before the novel coronavirus hit?

If construction does not resume, you will get a negative GDP of 5%. The confidence can only come back if we put things back on track. And I am not saying that COVID will disappear, we can do it in spite of COVID. As [the Prime Minister} said, “Atmanirbharta, Atmabal, Atmavishwas”. The self-reliance situation, using our own strength and not to be scared of anything that is happening, is something that is really important.

On construction sites, things are not going to be the same. You will have social distancing, you will have fewer workers, maybe different shifts. How is that going to evolve? And, what are the key lessons that the industry is taking away from this episode and the way it was managed?

You have to adapt to the new story. This is a new world, completely. Whether it is going to be a wedding, or a factory, or going to be an office site or construction working sites, everything will change, and I do not think that life will be the same again. But Indians are very good at adapting and I do not see any problems in us doing it. We Hindus have so many gods, we are quite used to different situations--different gods, different politicians, different things that are happening and all. So, we will also adapt to the new situation. But that is not the end of the story. Can we convert this sordid situation into an opportunity, which the Prime Minister talked about? And that is what I am looking forward to. Do not look at the downside of the situation, look at it as an opportunity that China will lose, which the world will lose, and we will succeed.

You have mentioned gods, but the migrant labour perhaps is also looking towards their gods and perhaps that God was not exactly smiling in the last 6-8 weeks?

So we must make up for that. Whatever we have done wrong and sorry for, we should compensate all these people in a super amount in order to take care of them. We will not be forgiven because we have not looked after them. So, we should compensate all the poor for whatever we have done by not looking after them and see that we overcompensate them with today. Nothing wrong with that. That is the only way, we will be able to tell the gods, “Look, we made a mistake and we will now treat these migrant labour as our gods of tomorrow and take care of each and every one of them.”

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