The construction sector has been a critical sector in a developing country like India from an employment generation perspective. This data-story presents insights on and trends in the construction sector in Maharashtra.
Investments in infrastructure is fortified by the logic that they have a large multiplier effect in spurring economic activity, output, and job creation. At around Rs.10 lakh crores (120.34 Billion USD), the outlay for capital investment in the 2023-24 financial budget is about 37 percent higher than the revised estimates for the previous year. It is clear from this that the main aim of this investment strategy is to spark employment growth. This article provides a data-based commentary on the state of the construction sector in the Indian state of Maharashtra.
Maharashtra’s share in All-India nominal GDP is, on an average, 14 percent between 2014-15 and 2021-22; this is the highest amongst all states. The increased emphasis on construction in the national budget is therefore mirrored by Maharashtra’s focus on this sector as well. The number of clearances given to building construction projects almost tripled between 2021 and 2022, while those for industrial construction projects went up by 17 percent (Table 1).
|Year||Building Construction||Industrial construction|
However, the share of the construction sector in Maharashtra’s Gross State Value Added (GSVA) in real terms has been consistently less than the corresponding share at the national level (Figure 1).
This implies that the economy in Maharashtra is less driven by the construction sector than other states on average. Despite this, within India’s construction sector, Maharashtra’s construction sector claims a 9.1 percent share of total construction in India and this has declined nearly consistently since 2011-12, with the exception of the pandemic year 2020-21, which was an outlier (Figure 2).
In terms of employment too, the share of workers in the construction sector in Maharashtra is less than the national average. For instance, in rural areas in 2021-22, the share of construction workers in total employment among males was only 7.63 percent compared to 16.64 percent across the country (Figure 3). This gap is smaller for males in urban areas. Figure 3 also points to the fact that the share of women workers in the construction sector is very low compared to men across the country. In Maharashtra, less than 2 percent women workers are employed in the construction sector.
The construction sector is highly exploitative for women who are both underpaid and overworked. Figure 4 shows that a clear gender wage gap exists for women in the construction sector in both rural and urban areas of Maharashtra. The gender wage gap has widened by almost 4 and 8 percentage points between 2020-21 and 2021-22 in rural and urban areas respectively. Women face discrimination in terms of both earnings and employment in the construction sector.
Even as women face harsh working conditions in the construction sector, their labour force participation continues to rise in Maharashtra in both rural and urban areas (Figure 5 and 6). In Maharashtra, FLFPR is significantly higher than the national average in rural areas while in urban areas the difference is smaller.
For investments in infrastructure and construction to have a desired multiplier effect, the workforce must expand its purchasing power. For this, it is imperative that the sector generates more and better employment for women. This assumes even greater importance in a state where labour force participation for women is increasing.
|Sectoral share of value added and employment|
|Item||Sectoral Share of Value Added (%)||Sectoral share of Employment (%)|
|Labour Force Participation Rate|
|Item||Rural (%)||Urban (%)|
|Unemployment Rate for Age Group (15-29 years) (%)|