November 8th, 2011
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Bihar’s gain, others loss

migrant-labourersPatna: Bihar’s recent economic growth has created a peculiar problem for real estate and infrastructure firms in other parts of the country. Migrant labour from the state constitutes around 50% of the unskilled workers employed in these sectors nationally, but increased government expenditure and private investment has caused rural migration from Bihar to fall by a third in recent years, resulting in labour shortages and 35-50% higher wage bills for real estate firms.

“There is a huge shortage of labour and that is leading to higher cost of construction as well as project delays,” says Ajay Chandra, managing director of Unitech. For many years, Bihar had trailed the rest of the country in terms of growth while some other states such as Maharashtra, Gujarat, Tamil Nadu and even neighbouring Uttar Pradesh became hotspots for investments. But since the Nitish Kumar government assumed power in 2005, the economy has rebounded and government expenditure has gone up substantially. Deputy Chief Minister Sushil Modi says Bihar’s economy grew by 14% in 2010-11, the fastest among all the states in the country.

The budget plan expenditure for Bihar this year is Rs 24,000 crore, up from Rs 18,000 crore last year. This is being spent on building roads, hospitals, and schools. Construction is seeing a 20% year-on-year growth in the state and minimum wages are also being implemented strictly,” says Modi.

But while this bodes well for people in the state who are finding employment avenues at home, it has slowed down the influx of labour to big cities such as Delhi and Mumbai.Migration from Bihar has gone down by 30%


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