Most of the contractors in major Indian cities are not paying the laborers the minimum wages mandated by the government. Delhi is paying the least 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 contribute to employee provident funds and provide employee state insurance coverage.
The platform said the data is collated from jobs posted on the app and application patterns.
Satya Vyas, Founder and CEO, ProjectHero said, “Due to poor technology penetration, the construction market is operating in an opaque manner. This opacity has allowed people to underpay, violate legal provisions and exhibit bad practices. Additionally, more than 50 million workers still have to find work through informal channels, and more than one million contractors still rely on references to get business. There is no single platform where every stakeholder is present. and are encouraged to protect their reputation.”
Most construction workers not paid minimum wage
Overall, the major cities of India (In this case Delhi NCR, Mumbai, Bengaluru, Hyderabad, Chennai and Pune), construction workers are not being paid the daily minimum wages mandated by the government, the report said.
It states that this trend is most prominent in the case of unskilled laborers.
While 90.9% of helper jobs in Delhi pay less than the minimum wage (Rs 711), this percentage is 90.4% for Bengaluru, 88% for Pune and 87.3% for Mumbai.
Hyderabad is the best with 78.5%. On average, 87% of construction helpers are not paid the minimum wage. For technician jobs, Delhi ranks the lowest, with 66.5% of jobs paying less than the minimum wage (Rs 788), and Bengaluru is slightly better at 65.8%.
Chennai is the best, with 44% of jobs paying less than the minimum wage. As far as Supervisor jobs are concerned, for which the minimum wage is Rs 866, 26.7% jobs in Chennai do not meet the daily wage limit. This is the lowest among all the cities.
In contrast, Pune has the highest percentage of jobs that do not pay the minimum wage, with 42.4% of supervisor jobs not meeting the salary threshold, the report noted.
Hyderabad was paying the most while Delhi was the least
Average wages per day were highest in Hyderabad and lowest in Delhi. For helper jobs, the average salary in Hyderabad is the highest at Rs 584, while it is Rs 515 in Delhi, the lowest.
For Technician jobs, Hyderabad has the highest average salary at Rs 862. Delhi on the other hand is Rs 718. For Supervisor jobs, Hyderabad is best paying at Rs 1035 while Pune is lowest paying. 885. Delhi ranks last with an average salary of Rs 925.
Less than 10% of jobs provide provident fund and insurance
Less than 10% of the nearly 4,500 live jobs on the platform provide provident fund deposits and employee state insurance to their employees. Notably, only 8.6% of jobs made provisions for contributions to employees’ provident funds, and only 7.1% of jobs made provisions for covering their employees with Employees’ State Insurance.
Maharashtra remained the most preferred destination for migrant laborers
The report said that for migrant workers, at 10.5K migrant applications, Maharashtra was the most preferred destination to get jobs, followed by Uttar Pradesh with 5.5K migrant applications and Haryana with 4K migrant applications.
Maharashtra has the highest number of active jobs at 1,331, followed by Uttar Pradesh with 1,170 active jobs. The report states that Gujarat ranks third with 403 active jobs, which is much less than the numbers of Maharashtra and Uttar Pradesh.
digital literacy is on the rise
The report states that ProjectHero usage statistics show that the construction industry is slowly becoming more formal. More contractors are also digitizing their processes and payment systems, which could eventually lead to the decline of the currently dominant cash economy.
The report states that the increase in digitization is evident from the fact that over 1.22 lakh workers have verified their bank account details on the app.
“With the widespread penetration of smartphones and cheap data and the government’s push towards sector formalization, we feel the industry is moving in the right direction. At Project Hero, we are confident that our report for the year 2023 will reveal better numbers for the industry,” said Vyas.
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