Gujarat’s manufacturing sector fights labour crunch

AHMEDABAD: At a time when manufacturing industries are facing stiff cost pressures with surge in raw material, power, logistics and shipping costs, labour shortage is further slowing the state’s manufacturing momentum. With industrial activity picking up pace in other states, migrant labourers employed in Gujarat’s industries are moving back to their home states, causing a massive labour shortage here.
For instance, the Sanand Industrial Estate, which has some 350 units operational, is working with 5,000 less workers. Pre-pandemic, there were 25,000 workers employed here of which 20,000 were migrant workers. This cluster alone has lost 4,000 migrant workers who have either not returned or chosen to take up work in their home states. Similar is the case of Naroda GIDC which provided employment to at least 50,000 workers before Covid-19. The same has dropped by 50% according to industry estimates.
Morbi, which is Asia’s largest ceramic manufacturing cluster, is also facing a 15% shortage of labourers.
“Gujarat is home to some 60 lakh industrial labourers of which 80% are migrants. Post Covid-19, many labourers have not returned and instead joined the agriculture sector permanently,” said Ajit Shah, chairman – GIDC committee, Gujarat Chamber of Commerce and Industry( GCCI).
Industry sources confirmed that many labourers have migrated back to their home states as industrial activities have begun picking up pace in Uttar Pradesh and Bihar too, due to which there is a shift of labourers from Gujarat to other states.
Ajay Patel, secretary, Naroda Industries Association said, “After Holi festival, many labourers have not returned. Other states have also started initiatives to attract investments and therefore labourers get employment in their native states and therefore they do not return here.”
“Many new labourers are also coming to Gujarat in search of employment. However, training them with the right skill sets is a challenge,” said Shah.
Migrant labourers hailing from other states require housing and transportation facilities and it is not possible for all the MSME units to provide these facilities.
With inflation running high, labour churning has increased significantly.
“Due to inflation, a lot of labourers are unable to meet their expenditures and as a result tend to switch jobs quicker to other factories lured by more money. At the same time, with industries battling cost pressures, capacities are underutilised because of which labour shortage is not hurting production in a big way currently as ” said Yogesh Parikh, president, Gujarat Dyestuff Manufacturers’ Association (GDMA)
Market players say that manufacturing capacities of a number of industries are underutilised by 40% due to stiff cost pressures. Due to this, the effect of labour shortage is not glaringly visible.
“ However, once industrial activity gains momentum, it will be difficult to restart production,” Patel added.
Echoing a similar view, Nilesh Jetparia, president, Morbi Ceramics Association, “At present the shortage is not adversely impacting because capacities are underutilised due to surge in gas prices. However, if the labour crunch becomes more acute, it will be detrimental to the pace of production.”
There is no significant shortage of labour in Rajkot’s engineering industry. The migrant labourers are engaged in casting and forging units. Parth Ganatra, vice president, Rajkot Chamber of Commerce and Industry, said, “The casting industry is not working at full capacities due to high raw material prices. The labourers are in short supply if we were to operate at full capacity; however, with underutilized capacities, there is no shortage of labour as yet.”
The government is also making efforts to provide skilled labourers to industries.
Anju Sharma, additional chief secretary, labour and employment department said, ‘’To bridge the demand-supply gap of skilled labourers, we have started a new portal wherein industries can post their labour requirements. The government will attempt to train the workforce. We have increased incentives under the central and state government schemes.’’
(Inputs from Nimesh Khakhariya and Kapil Dave)