Bringing migrant labour back to work is expected to be a herculean task, and companies will have to give incentives to get the work rolling.
The coronavirus pandemic has resulted in a mass labour exodus as the lockdown forced daily wage workers to return to home in the absence of bread and butter. Bringing migrant labour back to work is expected to be a herculean task, and companies will have to give incentives to get the work rolling. “The psychological pressure may hold the labour back. We may have to give some incentives to bring labour back,” SN Subramanyan, MD and CEO, L&T, told CNBC TV-18 in an interview. The current financial year will be a tough one, but the construction engineering company remains cautiously optimistic, he added.
As the country imposed one of the strictest lockdowns in the world owing to the spread of coronavirus, businesses have been severely affected and the economy has come to a grinding halt. While many businesses faced worker crisis, drying up revenues have added to the pain point. Larsen & Toubro, which announced its Q4 results on Friday, said that its working capital has stretched due to delay in client payments. “There is going to be a sharp reduction in capital allocation this year,” SN Subramanyan said. To make up for the revenue losses in the last few months, L&T is now looking to ramp up its execution during monsoon. The company has reported a Rs 15,000 crore worth billing delay due to the nationwide lockdown.
Speaking about how the company is faring now that the country has entered Unlock 1, SN Subramanyan said that the company has been getting back to some sort of normalcy in the last three weeks with execution resuming at 90% for about 950 projects. Labour availability is also likely to normalise in the coming 15-20 days. While the company has about 1.2 lakh labour working on the sites currently, L&T needs almost the same number of additional workers to achieve normalcy.
Meanwhile, migrant labour have started to come back to the market amid financial uncertainty. A large chunk of the labour who had left for their home towns in April have now started to come back, according to CMIE. In May, the labour participation rate (LPR) went up after witnessing a drop by 6.3 percentage points from 41.9% in March to 35.6% in April. Further, nearly 2.1 crore people got new jobs in May.