Below normal monsoon to spur labour flight to construction

The availability of unskilled and semiskilled labour for construction and real estate sector is likely to increase if the prediction of below-normal monsoon by India Meteorological Department (IMD) this year comes true.

Any shortfall in monsoon would adversely affect farm income and push marginal farmers and labour seek alternative avenues of earning.

While agriculture supports over 50% of the Uttar Pradesh population, monsoon is the main source of irrigation in agriculture. Almost 84% and 70% of land holding in eastern and western UP regions is below one hectare respectively, which implies large number of marginal farmers.

At present, the real estate sector is already facing shortage of labour, since wheat harvest season is on. The labour shortage extends to the month of June. Labour shortage has also been precipitated by large number of ongoing projects and Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) of the Centre.

"If there is sub-optimal monsoon, the agricultural labour would be idle and jobless. This would certainly increase the availability of labour for construction activity. The quantum of increase would depend upon the severity of monsoon shortfall," Uttar Pradesh Real Estate Development Council (REDCO) president S K Garg told Business Standard here.

REDCO is also affiliated to Confederation of Real Estate Developers' Associations of India (CREDAI).

"However, labour wages would not come down due to high inflation," he added.

He warned below-normal monsoon would be bad for economy and pull down sentiments. "This would further dent the growth of real estate sector as well in short term," he added.

The average labour cost in UP is about Rs 250 per day, which is slightly higher in the National Capital Region (NCR).

"If the monsoon is below normal, the labour shortage faced by construction projects would be eased, however, the labour cost would not come down for sure," Realtor Tulsiani Constructions and Developers CMD Anil Kumar Tulsiani said.

"Any drought would impact the employment of almost 83% population engaged directly or indirectly in farm jobs and push them to non-farm sector. As construction is the first choice of semiskilled and unskilled workers, it would increase the bargaining and availability of this sector," Kisan Jagriti Manch president and Lucknow University (LU) faculty Prof Sudhir Panwar said.

He claimed due to MNREGA and hike in agriculture wages, the construction sector had been struggling to find cheap labour. "Below-normal monsoon and subsequent flight of labour to construction would reduce wages in this sector, especially in adjoining cities," he underlined.