India’s construction labour shortage: Builders must ask themselves some hard questions

But in one matter, every one of these companies has faced the same trouble on every project. There has been high uncertainty around labour on site. They find it hard to reliably get the number of workers needed on any given day in the skill mix required. Almost all of this labour comes from rural areas, especially from eastern parts of India.

The more effective construction companies maintain rigorous mechanisms and deep networks to stabilize labour supply from these regions. Still, none of them can manage labour as planned. So I have been asking around, trying to understand what is going on.

The consistent answer points to three factors.

First, people who have worked as construction labourers do not want their children to do the same work. It is physically punishing and requires living away from family for months at a stretch. The wages too do not justify the hardship. Those who have laboured on construction sites want their children to study and find some other livelihood.

Second, over the past two decades, welfare schemes of central and state governments have created a floor of support in rural areas—food through the public distribution system, support for education and livelihoods, plus pensions of various kinds. Construction companies estimate that a rural household can access benefits that amount to perhaps 60-70% of what a construction labourer earns—without leaving home, without enduring physical hardship and without separation from family.

Third, festivals, elections, harvests and weddings—they all pull workers back to their villages. And once they go back home, many do not return.

What all these people are narrating is unsurprising. They are saying that the working conditions and wages of labourers in the construction industry are such that people find it better to stay in their villages, sustained by whatever government support and local livelihoods they can piece together.

The industry is in an intense debate: Are these government welfare programmes misguided? Are they distorting the labour market? The implied suggestion is that the problem is too much government support, not too little industry responsibility. This framing ignores the reality that these programmes are unevenly implemented, with millions effectively excluded.

But let us examine the core claim. So-called ‘unskilled’ workers make up roughly 80% of the workforce on any construction site. Such a worker earns somewhere between ₹600 and ₹700 a day. At 25 working days a month, that is about ₹15,000. Out of this, the worker must pay for food and lodging at the site while supporting a family back home.

The claim is that this is not attractive enough because government support has made rural life comfortable. Anyone who believes so should spend a day in a labour camp or in the villages these workers come from to see for themselves. What one will find is not comfort but the bare minimum of survival, and often not even that. To suggest that the problem is excessive government generosity is to misread the situation. By any honest reckoning, these wages do not reflect dignity of labour or demands of the work.

The construction industry has a problem—one of its own making. And the solution is entirely within its power: pay fair wages. Not ‘fair’ in the language of ethics or morality—though certainly that too—but in the context of the concrete reality of the cost of living and what human labour actually deserves.

But there is something more. The construction industry’s predicament is only one instance of a far larger pattern. Across sector after sector, we see the same instinct at work: blame government schemes for distorting incentives, blame the poor for being insufficiently motivated, blame migration patterns, blame anything except the one thing that most directly explains the situation.

That one thing is the refusal of business and those in positions of power and wealth to accept that a more equal and more just distribution of income is not charity—it is a basic condition for a functional and decent society.

The government, for all its limitations, is still doing things. These efforts are real and they matter. What is not keeping pace is the moral imagination of those who employ hundreds of millions of our fellow citizens, and who continue to justify wages as well as work conditions that they themselves would never accept for themselves or their children.

We live in a country where people are very good at diagnosing the failures of the poor and inadequacies of the state. We are considerably less willing to look at the obligations of capital and of those who control it.

As an exercise, go and see how 80% of your fellow human beings actually live. And then try to justify, to yourself first, the distribution of income and wealth that we have collectively chosen to sustain.

The author is CEO of Azim Premji Foundation.