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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, one of the country's top three real estate companies. The company has a number of projects under development simultaneously and Chandra and his team have had to juggle labour between these projects. 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. According to a study by the Bihar Institute of Economic Studies, migration of labour from Bihar in the past few years is down 25-30%. Instead of entire families migrating to cities to find jobs, only a few members are moving to cities while the rest are finding jobs in Bihar, either in state government projects or in NREGA schemes, says the study. "The government is making huge expenditure," says Pyare Lal, director of the institute. He adds that while there is still a long way to go for the state in terms of development, massive expenditure along with the Centre's National Rural Economic Guarantee Act (NREGA) programme, that guarantees 100 days' employment in a year to every adult member of a rural family, has certainly reduced the pace of migration. "There is certainly a shortage of labour as employment levels in rural India have gone up. This is good news for the country. It means the country is developing," says Adi Godrej, chairman of Godrej Properties. Economist Bibek Debroy, who has studied states and their economies extensively, says that when a relatively backward economy starts to grow, the initial push is usually in construction and real estate and that is what is happening is Bihar as well. He also attributed reduced migration to the NREGA programme
Keywords
Bihar, governmnet expenditure, labour, employment, economies, construction, economy, rural India, NREGA, migration, economic growth, infrastructure,
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