The Foundation for Economic Development’s report, “Worker Housing | Unlocking Labour-intensive Manufacturing in India”, highlights worker accommodation as a critical enabler for boosting India’s manufacturing sector. With 46% of India’s workforce engaged in agriculture but contributing only 18% to GDP, the report underscores the need to transition to higher-productivity manufacturing jobs, which can absorb unskilled labor at scale.
Industrial clusters, pivotal for manufacturing growth, often face severe labor shortages due to inadequate housing near work sites. Current informal housing arrangements are sub-standard and sub-scale, reducing worker productivity and deterring industry growth, ultimately impacting India’s manufacturing competitiveness globally.
Key recommendations include:
- Zoning regulations: Allow mixed land zoning to enable worker housing construction.
- Building bye-laws: Simplify and liberalize residential building rules to reduce costs.
- Operating regulations: Exempt worker housing from GST and align utility tariffs with residential rates.
The report calls for government reforms and investments, including rental vouchers and housing subsidies, to overcome the chicken-and-egg challenge of attracting both workers and industries. Treating worker housing as infrastructure can unlock significant economic and social returns.
