Coronavirus: Construction Activity Restarts In Some Green Zones, Says Niranjan Hiranandani
About two to three percent of construction activity has resumed in green zones across the country, said Niranjan Hiranandani, president of industry body Assocham. “My reading is that hopefully by next week, it could go up to 5 or 6 percent of the work but a large amount of work and other men are in city and urban, semi-urban areas where we have a large number of red zones and that is becoming the challenge.”
In the Mumbai metropolitan region only government construction activity on pre-monsoon road and drain work as well as on key projects such as metro rail and harbour bridge has restarted, Hiranandani, a developer himself, said. He warned that resumption of certain construction activity is critical in the city. “For example, there some places where if they (pre-monsoon works) are not permitted and the works are not completed, in the monsoon there could be landslides in these cases which could cause damage to property and people in the adjoining buildings and areas. So, I think some of this activity has to be taken up,” he said in an interview to BloombergQuint.
Besides, there are continuing concerns about the safety of migrant labour in urban construction sites. Many labourers trekked home to various states when the lockdown was first imposed on March 24, sparking concerns for their welfare and also heightening risks of carrying the virus into rural communities. Others stayed on at construction sites where project owners are attempting to house and feed them, keeping new conditions such as social distancing in mind. If construction work does not begin soon after May 3, many of these labourers will prefer to return to their villages ahead of the monsoon, Hiranandani said. MNREGA or the employment guarantee scheme is also a big draw.
So, there is a fear that if we continue that (lockdown) and not start the work for construction, at least partially by May 3, I think we will see another spectacle of migration and I don’t think it will be easy to stop these people from going back.Niranjan Hiranandani, MD, Hiranandani Group and President, ASSOCHAM
Besides, Hiranandani believes, social distancing measures will be more effective on construction sites than in the slums that many labourers live in, often four to five in a single tiny room. “The industry will follow social distancing norms and it may mean that 40-50 percent of work will take place, depending on the type of work and type of industry and type of activity, this can be controlled.”
Reviving The Economy
Hiranandani also spoke on the financial measures needed to revive economic growth, and emphasised that the stimulus amount should be large, between Rs 10 to 14 lakh crore. Assocham has made certain key recommendations to the government, including
- Government (central and states) should make overdue payments such as tax refunds, NHAI payments, pending subsidies etc...
- Cut goods and sales tax rates by 50 percent for six months to restore demand
- Offer credit guarantees for additional funding of businesses
- A six-month suspension of the Insolvency and Bankruptcy Code, 2016
- RBI should permit a one-time rollover of all loan accounts with outstanding amounts as of March 31.
As you know, we have the highest unemployment position today and I’m quite disappointed about that. Unless you don’t push the stimulus package strongly and quickly you’re going to continue the high level of unemployment.Niranjan Hiranandani, MD, Hiranandani Group and President, Assocham
The virus has been very “socialist” Hiranandani said, when asked whether it will spur further consolidation in the real estate sector. “Many big companies are in difficulty as much as the small companies,” he said.
A real estate rescue fund announced by the government last year is yet to make any meaningful disbursals, BloombergQuint reported earlier this week. Yet, Hiranandani said “almost 40 cases are done and are going to be disbursed any moment now, in stages”. He is hopeful that in another three to four months, a few more such Rs 10,000 crore funds will be ready to pitch in. Eventually, one of them “could be used for the purposes of bailing out industry from this virus which is the last nail in the coffin of many of the projects taking place”.
Fifteen percent of the workforce in India relies on this (real estate). 269 industries will be negatively affected if real estate is affected. So, you’re going to have a real downturn in the economy and that 1.9 percent GDP growth (IMF projection) also will not be there. If you want employment to be safe, if you want to reduce your unemployment drastically, you have to bail out real estate.Niranjan Hiranandani, MD, Hiranandani Group and President, Assocham
Watch | Niranjan Hiranandani in conversation with BloombergQuint’s Menaka Doshi