Home / Industry / Infrastructure /  Bihar growth leading to labour shortage: Bhave

London: Bihar under chief minister Nitish Kumar is doing ‘very well’, but the state’s development has led to labour shortages hurting India’s construction industry, former head of Securities and Exchange Board of India (Sebi) C.B. Bhave has said.

Due to many new job opportunities and improved conditions in Bihar, not many in the state now migrate to other states in search of livelihood, he said.

This was particularly affecting the construction industry adversely, Bhave said at a high profile seminar of top business and financial leaders from India and London on Monday evening.

The seminar, organised by the City of London, discussed various issues concerning India’s economy - including last week’s reforms such as hike in diesel prices, changes in rules to allow FDI in aviation and multi-brand retail sectors - but quite a few in the audience were surprised at the Bihar example.

Bhave noted the recent strides made in the development of Bihar, but said the state’s growth story was also “creating problems" for India’s construction industry.

“The construction industry is suffering serious labour shortage. For years, the industry depended on labourers from Bihar, but now when they take leave and go home, 70% do not return to work on construction projects in other states," Bhave said.

Nasser Munjee, chairman of the Development Credit Bank, also noted the improved conditions in Bihar, particularly in cities, but added that much needed to be done for development to reach rural areas in the state.

On the phenomenon of some states doing much better than others in terms of economic growth and development, Ajay Shah, senior fellow at the Delhi-based National Institute of Public Finance and Policy, said “competitive dynamics" between states in India was yet to emerge.

There was potential in India’s Constitution to support such a “competitive landscape" between states, he said, but added that this had yet to reach the level of regional competition witnessed in China.

The City of London refers to a small part of London and often stands for the United Kingdom’s financial services industry.

The City has an office in Mumbai to strengthen trade and investment links between India and the UK. PTI

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