A new report highlights that building large-scale worker housing infrastructure is crucial for India to fully unlock the potential of its manufacturing sector. The study, conducted by the Foundation for Economic Development, emphasizes how such housing could benefit multiple stakeholders and significantly contribute to public welfare.

Worker Housing for Manufacturing

The report stresses that manufacturing is the only sector capable of absorbing unskilled labor on a large scale. It points out that creating well-paying jobs in manufacturing could help India’s workforce move away from low-productivity and low-wage employment, especially in agriculture. Jobs in manufacturing are reportedly three to six times more productive than agricultural work, making the sector essential for sustained economic growth.

Industrial clusters, where manufacturing jobs are concentrated, require far more labor than nearby villages and towns can supply. However, the lack of formal worker accommodation poses a significant challenge to meeting this demand.

Challenges in Worker Accommodation

Currently, worker housing in India is managed informally, often resulting in the growth of unauthorized slums or poorly planned multi-storey settlements. These informal setups lack basic amenities and do not support the large-scale workforce needed for manufacturing.

The report suggests that addressing this issue requires a shift in mindset—worker housing should be seen as essential infrastructure, much like roads or electricity. This approach could help India’s manufacturing sector flourish while providing better living conditions for workers.

Worker Housing Development

The report proposes several key recommendations to improve worker housing:

• Zoning Regulations: Mixed land zoning should be allowed so worker housing can be built in all zones without restrictions.

• Simplified Approvals: A system of self-certification by chartered architects, third-party certification, and insurance could replace prior government approvals, speeding up the process.

• Reduced Costs: Worker housing should be exempt from GST, and residential rates should apply for property tax, electricity, and water tariffs to lower expenses.

• Government Support: The government could provide financial assistance through subsidies for worker housing development and rental vouchers to make housing more affordable for workers.

The report concludes that developing large-scale worker housing infrastructure is a critical step for India to unlock its manufacturing potential. Such initiatives will not only improve living standards for workers but also boost economic development by creating better jobs and enabling industrial growth. Formal worker housing could transform manufacturing into a more productive and sustainable sector, driving India’s economic progress.