A majority of contractors across major Indian cities are not paying labourers the government-mandated minimum wage. Delhi is the lowest paying among all cities, while Hyderabad is the highest.
According to a report by Projecthero, an app platform for construction workers and contractors, less than 10% of jobs make contributions to the employee’s Provident Fund and provide Employee State Insurance coverage.
The data has been collated from the jobs posted and application patterns on the app, the platform said.
Satya Vyas, Founder and CEO, Projecthero, said, “Due to poor technological penetration, the construction market has been operating in an opaque manner. This opacity has allowed people to get away with paying low wages, violating legal provisions, and demonstrating bad behaviour. Additionally, more than 50 million workers still have to find work through informal means, and more than one million contractors still rely on references to get business. There is no singular platform where every stakeholder is present and is incentivised to protect their reputation.”
Most construction workers not paid minimum wage
Overall, across the major cities of India (Delhi NCR, Mumbai, Bengaluru, Hyderabad, Chennai, and Pune in this case), construction workers are not being paid government-mandated daily minimum wages, the report said.
It added that this trend is most prominent in the case of unskilled labourers.
While 90.9% of helper jobs in Delhi pay less than the minimum wage (Rs 711), the percentage is 90.4% for Bengaluru, 88% for Pune, and 87.3% for Mumbai.
Hyderabad is the best at 78.5%. On average, 87% of construction helpers are not paid minimum wage. For technician jobs, Delhi ranks at the bottom, with 66.5% of jobs paying less than the minimum wage (Rs 788), and Bengaluru at 65.8% is marginally better.
Chennai is the best, with 44% of jobs paying less than the minimum wage. As for supervisor jobs, for which the minimum wage is Rs 866, 26.7% of jobs in Chennai do not meet the daily wage threshold. This is the lowest across all cities.
Conversely, Pune has the highest percentage of jobs not paying the minimum wage, with 42.4% of supervisor jobs not meeting the wage threshold, the report highlighted.
Hyderabad was the highest paying while Delhi is the lowest
The average wage per day was the highest in Hyderabad and the lowest in Delhi. For helper jobs, the average wage in Hyderabad is the highest, at Rs 584, while the same in Delhi is Rs 515, which is the lowest.
For technician jobs, the average wage is the highest in Hyderabad at Rs 862. On the other end lies Delhi, at Rs 718. For supervisor jobs, Hyderabad is the most well paying at Rs 1035, while Pune is the lowest paying, at Rs 885. Delhi ranks at the penultimate spot, with an average wage of Rs 925.
Less than 10% of jobs provide Provident Fund and Insurance
Of about 4,500 live jobs on the platform, less than 10% of jobs provide their employees with Provident Fund deposits and Employee State Insurance. Specifically, only 8.6% of jobs have made provisions for contributing to employees’ Provident Funds, and only 7.1% of the jobs have made provisions for covering their employees with the Employee State Insurance.
Maharashtra was the most chosen destination for migrant labourers
The report said that for migrant workers, Maharashtra was the most preferred location for availing jobs, at 10.5K migrant applications, followed by Uttar Pradesh at 5.5K migrant applications and Haryana at 4K migrant applications.
Maharashtra has the highest number of active jobs on the platform, at 1,331, followed by Uttar Pradesh, at 1,170 active jobs. Gujarat ranks third with 403 active jobs, which is much lower than Maharashtra and Uttar Pradesh’s numbers, the report said.
Digital literacy is increasing
The report said that Projecthero’s usage statistics indicate that the construction industry is gradually becoming more formalised. More contractors are also making their processes and payment systems digitised, which may eventually lead to the decline of the currently predominant cash economy.
The growth in digitisation is evident by the fact that over 1.22 lakh workers have verified their bank account details on the app, the report added.
“With the widespread penetration of smartphones and cheap data and the push from the government towards sector formalisation, we feel that the industry is moving in the right direction. At projecthero, we are confident that our report for the year 2023 will reveal much better numbers for the industry,” added Vyas.
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