Rural jobs scheme, direct benefit transfers causing labour shortages: L&T chair

India's direct transfers of cash to the beneficiaries of a host of social sector schemes, and rural jobs programme that assures 100 days of wage employment to at least one member of every village household are preventing workers from moving away from their hometowns, sparking labour shortages in large cities and other economic centres across the country, Larsen & Toubro (L&T) chairman S.N. Subrahmanyan has said.

He said that the workforce migration crisis in the country, where labourers are unwilling to move locations, is being felt on businesses and infrastructure development in cities.

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According to a report published in The Hindu, Subrahmanyan highlighted the challenges in getting labourers to move to centres of economic activity, apart from the high rates of attrition that is also frequent. "This means, for employing 400,000 labourers, we employed 1.6 million labourers. We have a database of 4 million people with us, their names, their Jan Dhan bank account, their Aadhaar number, the village they come from, their skillsets. There is a site in the western part of the country, where I am supposed to mobilise 50,000 labourers. I need people, but they are not willing to come," he said at the CII Mystic South Global Linkages Summit in Chennai on Tuesday.

Staying put

“[There are] various reasons, which are well known to you — the Jan Dhan bank account, the direct benefit transfers... maybe the economy is doing well, so you get jobs at the place where you are... the MNREGA scheme. So, people do not want to come all the way, say from Muzaffarabad, to Bombay to work. Because, why do you want to struggle?" the report quoted him as saying.

Under a direct benefit transfer, eligible individuals receive government's benefits and subsidies directly into their bank accounts. The Jan Dhan account is a saving scheme aimed at boosting financial inclusion. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a national rural jobs guarantee scheme that was implemented in 2006.

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The central government makes direct cash transfers to eligible beneficiaries under several schemes, including Pradhan Mantri Kisan Samman Nidhi (PMKISAN), Pradhan Mantri Matru Vandana Yojana, National Scheme of Incentive to Girls for Secondary Education, Pradhan Mantri Fasal Bima Yojana, and Mahatma Gandhi National Employment Guarantee Scheme.

This is not the first time that the head of the construction major has flagged the shortage of workforce.

Last year, Subrahmanyan said that workforce challenges had become the focus of the construction group, which then needed about 45,000 engineers and labourers. “We would at the moment, including attrition, need 20,000 engineers on the IT and ITeS business and another 25,000-30,000 labourers for the L&T group," Subrahmanyan said in June 2024.

He had then said that these challenges came at a time when the company's clients were asking for projects to be completed faster “due to various reasons, with the growth of the economy and due to their own economic reasons".

Not the only one

The Mumbai-based engineering and construction company is not the only one facing labour shortages. Real estate and other construction firms are offering incentives to blue-collared workers to retain them, specially during the festive season.

Last September, Manoj Gaur, chairman of Credai (Confederation of Real Estate Developers’ Associations of India) estimated that there is at least a 25% shortage of manpower in the real estate sector. In fact, in another story published by Mint in June last year, besides L&T, rivals KEC International and Hindustan Construction Company (HCC) were also hit by an acute shortage of skilled and unskilled manpower. Many of the workers were heading to Russia and the Middle Eastern region, including Israel, as a construction boom in those regions promised higher wages.

Last month, Subrahmanyan had stirred a controversy by saying employees needed to work for 90 hours a week.

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