COVID-19 Crisis: Workers and Contractors Dread Imminent Slowdown in Real Estate

Shambhu Mandal had reached Kalyan station on March 24 to catch a train for his hometown in Cuttack district of Odisha. But then he got to know that trains have been cancelled now and he can't go to his home. So, he returned to the chawl in Shilphata area of Dombivali where he lives with eight other roommates. Five of them had left on March 19 itself for their hometown. But Shambhu and his two friends stayed back trying to get some advance money from the contractor. 

"If we are going home after almost a year, our parents will certainly feel happy. We will have to spend some money there and also we would need money to return. So, we were requesting our contractor to give us some advance. He took four days for that and meanwhile, everything got closed," Shambhu, who was sitting at a nearby chowk, told NewsClick. 

With the lockdown in place owing to the COVID-19 pandemic, there is no work for Shambhu. He works as a construction labourer at a site in Nilje area of Kalyan. There are thousands of workers like him who have come from states like Odisha, West Bengal, Jharkhand, Chhattisgarh and Telangana and work at construction sites. They get around Rs 400 per day for their work. But Shambhu's site has been closed since March 15. 

"Contractor won't pay us when there is no work. So, he asked us to go back home and assured us that when the work will resume, he will call us. Sitting here without work is expensive. It was better to leave for home and return when the work would start," he said. 

Shambhu and his roommates do not ration cards with their addresses in Maharashtra; so, they have to buy rice, dal and other ingredients from the market. But without any earning, it is a challenge for them. "On March 28, we filled a form here and then the shop owner gave us five kilo rice and five kilo wheat and two kilo dal," he said, adding that however, he is not sure for how long they can survive this way.

"Now, everyone is saying that the construction site owner may not immediately start the work [after the lockdown ends]. He has three construction projects underway. He may start only one of them. Then, we may have to search for other work," said Shambhu. 

Majority of those employed by the real estate market apprehend a slowdown in the near future. The labourers like Shambhu may return to their homes if work is not available here. But take the case of Chandan Shelke. He is a plumber and has been given contracts for two under-construction buildings. Chandan lives in Dombivali with his family. "The owner may complete these projects but I have heard that there won't be any new project for about some six months after this. How will I manage then?" asked Chandan.

Real estate sector is considered to be India's largest employment generator after agriculture. And almost 30% of mega residential construction projects in the country are located in Mumbai Metropolitan Area (MMR) and Pune. The sector has already been struggling in the last three years, mainly after demonetisation and the “flawed” Real Estate (Regulation and Development) Act. Maharashtra, which gets 25% of its revenue via stamp duties, has not increased the ready reckoner rates in last year, looking at the grim condition of the market. This year as well, the rates will be revised only after the Covid-19 epidemic is under control.

Against this backdrop, the possible slowdown following the Covid-19 crisis could break the backbone of the real estate industry. The government may bring in some measures to help the key players, but for people like Shambhu and Chandan, who are unorganised and in huge numbers, there is no relief in sight. 

Also read: Why India’s Covid-19 Package is Grossly Inadequate