CONSTRUCTION is the fastest growing area, which contributes about 9% to the national GDP and estimates to reach $ 1.4 trillion by 2025. About 3 crore workers are estimated to work in the region in India by 2030. However, last month, Chairman and Managing Director of Larsen and Toubro, N. Sabrahmanai, saw the growing concerns of more than the labor shortage. He said that some labor is reluctant to move to work due to the availability of welfare schemes, providing them financial security. This story oversees structural issues that face construction workers.
A fragmented journey
Construction workers, especially migrant laborers, tolerate a fragmented employment scenario, which is characterized by frequent transfer, high job insecurity, incompatible access to welfare benefits, and uncertain work situations. Despite the legal framework like building and other construction workers (Regulation of Employment and Service Terms) (BOCW) Act, 1996, reaching welfare rights is an important challenge. About 5.65 crore construction workers are registered with the State Construction Boards. They have collected about 70,000 crore cess, which are to be used for the welfare of construction workers. But this amount remains unused due to a series of issues to a large extent.
A primary barrier for construction workers is to obtain and maintain the required documents for welfare registration. The evidence of identity, the date of birth, and residence is the documents required to reach the benefits. However, due to the transient nature of their work, many laborers lack permanent addresses, making it difficult for them to secure documents such as birth certificate, residence proof and rental agreements.
The need for a ’employment certificate’ to validate 90 days of work in a year makes this process more complicated. This document is usually issued by employers, but in the case of some states, it is replaced by self-promotion or trade union certificate. Nevertheless, employers are prominently called or visited for verification. Contractors are reluctant or unable to provide certificates or expected information to the state, which makes workers unable to prove their eligibility. Additionally, verification protocols vary in states.
While the state governments collect 1-2% of the construction cess under the BOCW Act for the Fund Workers Welfare, according to the 2023 Parliamentary Standing Committee report, it remains about 75% unused. This discrepancy is largely due to worker database, inconsistent verification protocol and fragmented nature of cumbersome registration processes. For example, construction workers affected by seasonal employment disruptions, such as heat waves, struggle to reach direct profit transfer despite legal provisions. During the ban on construction due to air pollution in North India, millions of workers lost their livelihood, but faced delays and administrative challenges in achieving financial relief. Lack of digital public infrastructure increases their vulnerability to facilitate rapid disruption.
Overseas workers often discover employment in many states, but the absence of interopeable systems means that the benefits registered in one state cannot be accessed in another. For example, a worker registered under the Haryana BOCW Board loses access to welfare when it is transferred to Delhi. This disrupts continuity in welfare distribution and discourages the workers by completely registering.
proposed solution
To overcome the lack of labor in the construction industry, we propose the following actionable reforms. First, an integrated National Labor Identification System, Forest Nation One Ration Card will facilitate inter-state portability of welfare benefits. If BOCW registration is connected to the UAN on the E-Sram and worker data is integrated in the states, construction workers can reach their rights regardless of their location.
Second, state governments should adopt open-sources digital platforms to improve the access and efficiency of welfare schemes. Applying a centralized portal with standardized workflows will reduce administrative delays and increase transparency. Such platforms can support automatic verification through the real -time tracking of base seeding and welfare disbursions.
By accepting alternative evidences, and relaxing the verification protocol, simplifying the documentation protocol can reduce the process. State governments can facilitate bulk registration through on-site camps, ensuring that large construction projects maintain accurate workers records. This will reduce dependence on certificates issued by the employer.
Investing in skill development programs for construction is necessary to address a shortage of long -term labor. A strong skilling ecosystem to meet the developed demands of the industry can increase worker productivity and retention. But skilling alone is not enough – ensuring safe and dignified work environment is equally important to maintain the health and efficiency of the workers. Construction firms can play an important role by creating a more stable, skilled and flexible workforce, committed to both medium-term skilling initiatives and better workplace standards.
Finally, lack of labor cannot be addressed without accepting and resolving systemic obstacles for welfare access and continuity of employment.
Founder and CEO of Tarun Cherukuri, Indus Action; Harshil Sharma Director Government Relations, Indus Action
Published – March 18, 2025 01:02 am IST