The barriers faced by construction workers

Construction is the fastest-growing sector, contributing about 9% to the national GDP and projected to reach $1.4 trillion by 2025. Around 3 crore workers are estimated to be working in this sector in India by 2030. However, last month, Larsen and Toubro Chairman and Managing Director, N. Subrahmanyan, voiced growing concerns over labour shortages in the sector. He said that some workers are reluctant to relocate for work due to the availability of welfare schemes, which offer them financial security. This narrative oversimplifies the structural issues that construction labourers face.

A fragmented journey

Construction workers, especially migrant labourers, endure a fragmented employment landscape characterised by frequent relocations, high job insecurity, inconsistent access to welfare benefits, and precarious working conditions. Despite legal frameworks such as the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) (BOCW) Act, 1996, accessing welfare entitlements remains a significant challenge. Around 5.65 crore construction workers are registered with State construction boards. These have collected around ₹70,000 crore cesses, which are to be used for the welfare of construction workers. But this amount largely remains unutilised due to a series of issues.

A primary barrier for construction workers is obtaining and maintaining the documentation required for welfare registration. Proofs of identity, date of birth, and residence are essential documents for accessing benefits. However, due to the transient nature of their work, many labourers lack permanent addresses, making it difficult for them to secure documents such as birth certificates, residence proofs, and rental agreements.

The requirement for an ‘employment certificate’ validating 90 days of work in a year further complicates the process. This document is typically issued by employers, but in the case of a few States, it is substituted by self-certification or a trade union certificate. Still, employers are majorly called or visited for verification. Contractors are unwilling or unable to provide certificates or requisite information to the State, leaving workers unable to prove their eligibility. Additionally, verification protocols vary across States.

While State governments collect a 1-2% construction cess under the BOCW Act to fund worker welfare, approximately 75% of it remains unutilised, according to a 2023 Parliamentary Standing Committee report. This discrepancy is largely due to the fragmented nature of worker databases, inconsistent verification protocols, and cumbersome registration processes. For example, construction workers affected by seasonal employment disruptions, such as heat waves, struggle to access direct benefit transfers despite legal provisions. During the ban on construction due to air pollution in north India, lakhs of workers lost their livelihoods but faced delays and administrative challenges in securing financial relief. The lack of digital public infrastructure to facilitate rapid disbursement exacerbates their vulnerability.

Migrant workers often move across multiple States searching for employment, but the absence of interoperable systems means that benefits registered in one State cannot be accessed in another. For instance, a worker registered under the Haryana BOCW Board loses access to welfare if he relocates to Delhi. This disrupts continuity in welfare delivery and discourages workers from registering altogether.

Proposed solutions

To address labour shortages in the construction industry, we propose the following actionable reforms. First, a unified national labour identification system, akin to the One Nation One Ration Card scheme, would facilitate inter-State portability of welfare benefits. If BOCW registrations are linked to UAN on e-Shram and worker data across States is integrated, construction labourers could access their entitlements regardless of their location.

Second, State governments should adopt open-source digital platforms to improve the accessibility and efficiency of welfare schemes. Implementing a centralised portal with standardised workflows would reduce administrative delays and enhance transparency. Such platforms can also support automated verification through Aadhaar seeding and real-time tracking of welfare disbursement.

Simplifying documentation protocols by accepting alternative proofs, and relaxing the verification protocols, can ease the process. State governments can facilitate bulk registration through on-site camps, ensuring that large construction projects maintain accurate worker records. This would reduce dependency on employer-issued certificates.

Investing in skill development programmes for construction is essential for addressing long-term labour shortages. A robust skilling ecosystem tailored to meet the evolving demands of the industry can enhance worker productivity and retention. But skilling alone is not enough — ensuring safe and dignified work environments is equally critical for maintaining workers’ health and efficiency. Construction firms can play a key role in this by committing to both medium-term skilling initiatives and improved workplace standards, creating a more stable, skilled, and resilient workforce.

In conclusion, labour shortages cannot be addressed without acknowledging and resolving the systemic barriers to welfare access and employment continuity.

Tarun Cherukuri Founder and CEO, Indus Action; Harshil Sharma Director Government Relations, Indus Action