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The Indian realty sector is slated to become the fastest-growing realty market, in the next few years. With a rapidly growing population, high GDP and rising income levels, the infrastructure in rural and urban areas, requires a big facelift. The massive growth prospect also requires huge skilled manpower, especially for the government to achieve its ‘Housing for All by 2022’ plan. Consequently, while there are hopes for major announcements for the real estate sector in Budget 2017, skill development also needs special focus.
The problem of unskilled labour in Indian realty
Unskilled labour at construction sites can lead to substantial wastage of time and materials, as the job may need to be done again, until certain standards are met. Developers may also find it difficult to adopt new and efficient technologies and designs, as the unskilled workers will not be able to cope with the requirements. Hence, the need for skilled workers in the construction sector is critical.
“80% of the employment in real estate is earned through minimal skills. Thus, focus on skill development is essential. As urban spaces are becoming scarce, there is greater requirement for the latest technology and execution of the same. Thus, the requirement for specific knowledge in the fields of finance, marketing and construction technology, has increased,” explains Parth Mehta, managing director, Paradigm Realty.
Why Budget 2017 should focus on skill development
The country is now becoming an attractive destination for manufacturing, thanks to the ‘Make in India’ program and the large consumer base, as well as a growing middle class. This makes India attractive for manufacturers to set up production here, in order to serve the domestic demand.
“The labour cost in India, at USD 1.72 per hour, is cheaper than China, which is at USD 3.28 per hour. The only challenge, is the scarcity of quality/skilled labour,” points out Anuj Puri, chairman and country head, JLL India.
“The current government’s focus on upskilling and reskilling, is helping. Under the ‘Skill India’ program, 300 million youth will be trained in different skills by 2022. Large investments, setting up of the labour exchange program, simulated laboratories, etc., are some examples that show the government’s seriousness in this direction. The upcoming budget should announce further initiatives, to take this program to the next level and help India retain its competitiveness,” he maintains.
Skill development: A win-win for realty and the common man
Experts believe that by focussing on skill development, the government would automatically generate employment. A skilled workforce, would also help the real estate sector to deliver good quality products on time and improve the efficiency of the construction industry.
According to several reports, private equity investments is set to increase in the real estate space. This is likely to boost the supply of projects, which will further increase job opportunities at various positions. India has a unique problem of unemployable workforce. With a few institutes imparting skills training, a start has been made. The scenario is only expected to improve, if the government takes it seriously and takes steps to start new training programs, announce new institutes and encourage the realty sector with incentives to boost the skill development. It remains to be seen, how much of this is addressed in the budget.