Bridging the Housing Gap to Boost India's Manufacturing Sector

India's workforce faces a challenge with 46% in agriculture contributing only 18% to GDP. Manufacturing could drive economic growth by absorbing unskilled labor, but inadequate worker housing limits industrial productivity and growth. Proposed reforms aim to address housing issues and enhance industrial cluster development.

India's economy encounters a notable hurdle as nearly half of its workforce remains tied to agriculture, despite the sector's modest 18% contribution to the GDP, according to a report by the Foundation for Economic Development. Analysts argue that manufacturing is uniquely situated to employ unskilled labor on a necessary scale to propel economic progress.

Positions in manufacturing and services produce outcomes 3-6 times more efficient than agricultural labor, highlighting the sector's ability to shift the workforce into roles with greater productivity. However, industrial clusters, vital for creating manufacturing jobs, struggle with workforce shortages due to insufficient labor in nearby towns and villages.

Yet, a significant impediment is the scarcity of adequate worker housing near these industrial hubs, which results in labor scarcity and diminished productivity. This deficiency hampers India's competitive edge in global manufacturing exports, stymieing job production and economic expansion. The present worker housing solutions are largely informal, often unauthorized slums or substandard settlements that do not meet necessary capacity or quality benchmarks.

Poor living conditions deter workforce migration to closer quarters near industrial clusters, exacerbating labor supply challenges. Efforts by the private sector to bridge this gap are obstructed by regulatory barriers. Rigid zoning laws prevent the development of worker housing, complex building regulations increase costs and delay projects, and hefty operational fees, including GST and commercial property rates, discourage investment.

The report advocates for various reforms to enhance the manufacturing sector's potential. It recommends implementing mixed-use zoning laws to allow worker housing in all areas, streamlining building codes to cut costs and delays, and exempting worker accommodations from GST and other commercial property charges.

These strategies aim to facilitate private sector investments in worker housing. Recognizing housing's critical role in industrial growth, the report suggests classifying worker housing as essential infrastructure with government-provided financial aid, such as construction subsidies and rental vouchers for workers. These steps are expected to make quality housing affordable, encouraging workforce migration to industrial clusters and ultimately stimulating industrial growth. (ANI)

(With inputs from agencies.)