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Now, workforce a major bottleneck for realty
development
Sunday August 05, 2012 12:43:10 PM,
Vinod Behl,
IANS
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The Indian realty and construction
sectors, which together contribute 17.5 percent to the country's
gross domestic product (GDP) and growing at an enviable 35 percent
per annum, now face a serious threat due to severe shortage of
workforce.
Increasing urbanisation is generating unprecedented demand for
real estate. Industry data show India needs to potentially build
an average of 8.7 billion sq. ft. of real estate space every year,
or whopping 95 billion by 2010-20. The annual requirement that
stood at 7.3 billion sq. ft. in 2010 is projected to touch 10.15
billion by 2020.
As much as 85 percent of potential space requirement is in the
housing sector, which faces a shortfall of 26 million units. India
will have a cumulative demand of 2.3 million units in next five
years, against supply of 1 million units.
This massive requirement for realty space results in huge demand
for professionals to build and deliver. But there's an immense
shortage of workforce at all levels - specialised professionals,
including valuers, quantity surveyors, facility managers, core
professionals, including engineers, architects and planners,
non-core professionals, including lawyers and financial analysts,
and workers including skilled and semi-skilled.
Considering the continuous shortfall in supply, coupled with
increasing annual demand, the real estate and construction sector
will be having a cumulative demand of nearly 45 million core
professionals over the current decade (2010-20) with a cumulative
demand-supply gap of 44 million core professionals.
We will be needing nearly four million civil engineers, 65,000
architects and 18,000 planners. Besides, the sector require about
35 million skilled and unskilled labourers but their availability
is pegged at 25 million.
This severe shortage of workforce especially labour shortage has
put a serious challenge to the timely completion of real estate
projects. Industry statistics show that about 480,000 units could
face delays during 2011-13 in top cities of Delhi-NCR, Mumbai,
Bengaluru, Hyderabad, Chennai and Kolkata. Today over five dozen
large residential projects accounting for over 40,000 units are
delayed by over four years in National Capital Region.
This has serious implications for the real estate consumers in
terms of extra financial burden, The shortage of labour and
substantial increase in their salaries has considerably pushed up
the cost of housing for the home buyers.
One major hurdle in tackling this serious problem of workforce
shortage is the sheer lack of training. According to All India
Council for Technical Eduction (AICTE), out of total workforce of
about 440 million, only about 12.5 percent has received some kind
of formal/non-formal vocational or education training. And
compared to 12 million people entering the workforce every year,
there is a capacity to train only 3.1 million workers. This has a
lot to do with shortage of specialised courses and curriculum,
besides professional faculty.
However, it is a welcome development that education qualification
framework will come into force from 2012-13 academic session in
polytechnics, engineering colleges and other colleges under the
University system. It's equally heartening that the government is
mulling a credit guarantee fund to create 26 crore skilled
manpower by 2018. This fund will be used for extending loans for
vocational programmes at a subsidised interest rate.
National Skill Development Corporation has also been actively
engaged in ramping up its efforts to train workforce in the
construction industry. But then the government effort alone will
not be adequate to tackle this serious problem. The real estate
and construction industry will have to make a substantial
contribution in this regard to ensure that its high growth is
sustained over the coming years.
(Vinod Behl is editor of Realty Plus, a real estate monthly. He
can be reached at vbehl2008@gmail.com)
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