24-December-2024-Editorial

SAFE ACCOMMODATION FOR INDUSTRIAL WORKERS: A KEY TO MANUFACTURING GROWTH

SAFE Accommodation, a concept introduced by NITI Aayog, stands for secure, affordable, flexible, and efficient housing for industrial workers. Its primary goal is to provide housing close to workplaces, ensuring worker welfare and enhancing productivity.

The initiative aims to address the challenges in worker housing and offers actionable recommendations to scale up such facilities nationwide.

What is SAFE Accommodation?

SAFE Accommodation refers to housing facilities near industrial or factory sites designed specifically for workers.

Features:

• Dormitory-style housing rented directly to workers or their employers.
• Includes essential amenities like water, electricity, sanitation, food services, laundry, and medical dispensaries.
• Excludes family housing.

Objectives:

• Improve labor mobility and productivity to strengthen manufacturing competitiveness.
• Designate worker accommodations as critical infrastructure with specific regulations.
• Encourage private developers to create affordable housing with reasonable returns.

Role of SAFE Accommodation in Manufacturing Growth

Boosting Manufacturing Expansion:

• India must create 7.85 million jobs annually until 2030 to maintain economic growth.
• Accessible housing can attract and retain the workforce required for industrial growth.

Promoting Women’s Workforce Participation:

• Women’s labor participation in India is lower compared to global benchmarks.
• SAFE Accommodation ensures secure housing, encouraging more women to join the workforce.

Sectoral Workforce Shift:

• Agriculture employs 46% of workers but contributes only 18% to GVA, while manufacturing employs 11% but contributes 14% to GVA.
• SAFE Accommodation facilitates the transition of surplus agricultural labor to manufacturing.

Supporting “Make in India”:

• Industrial hubs like EV manufacturing in Tamil Nadu and semiconductors in Gujarat require concentrated workforces.
• SAFE housing supports these hubs by addressing the needs of migrant workers.

Meeting Rising Demand for Housing:

• India’s economic goals necessitate creating 25 million formal housing units for workers by 2033.
• SAFE Accommodation addresses the rising demand for affordable housing near industrial sites.

Enhancing Productivity:

• Proximity to work reduces commute times and improves quality of life.
• This leads to better retention and lower recruitment costs.

Attracting Global Investment:

• Multinational corporations prioritize worker welfare.
• High-quality accommodations align with global labor standards, making India a preferred investment destination.

Global Examples of Worker Housing

China:

• Employers provide dormitory-style housing for migrant workers.
• Local governments often offer free land for such facilities.

Japan:

• Early industrialization saw female workers housed in dormitories.

Singapore:

• The Foreign Employee Dormitories Act, 2015, regulates migrant housing.

Vietnam:

• A plan to build 1 million social housing units for low- and middle-income workers supports industrial growth.

Challenges in Scaling Up Worker Accommodation

• Restrictive Zoning Laws: Residential developments are often prohibited in industrial zones, forcing workers to live far from their workplaces.
• Inefficient Building Regulations: Low Floor Area Ratios (FAR) limit the construction of high-capacity housing.
• High Operating Costs: Worker accommodations are often taxed as commercial properties, increasing costs.
• Financial Constraints: High capital costs and low returns deter private developers.
• Coordination Issues: Effective worker housing requires synchronized investments in housing, infrastructure, and industries.

Proposed Solutions

Regulatory Measures:

• Reclassify Worker Accommodations: Designate them as residential properties to benefit from lower taxes and utility rates. Provide GST exemptions for housing costs over Rs. 20,000 for a continuous 90-day stay.
• Simplify Environmental Clearances: Include SAFE accommodations in exemptions provided to industrial sheds and hostels.
• Gender-Inclusive Policies: Ensure accommodations meet the safety and welfare needs of women workers.
• Flexible Zoning Laws: Allow mixed-use developments near industrial hubs to facilitate worker housing.

Financial Recommendations:

• Viability Gap Funding (VGF): Offer 30%-40% project cost funding, with contributions from central and state governments.
• Competitive Bidding: Use transparent processes to allocate VGF support.
• Upgrade Existing Facilities: Use VGF to retrofit older accommodations, enhancing safety and capacity.

Conclusion

SAFE Accommodation is a transformative concept that addresses worker housing challenges while promoting manufacturing growth. By ensuring secure and affordable living spaces, India can enhance labor mobility, attract global investments, and achieve its economic goals. Implementing targeted regulatory and financial measures is essential to scale up these accommodations and ensure their success.