India needs 25 million beds for workers in manufacturing sector in 10 years: NITI Aayog

New Delhi [India], December 19 : The manufacturing sector in India is projected to require 25 million beds for industrial workers over the next decade, according to a new report released by NITI Aayog, titled S.A.F.E. Accommodation--Worker Housing for Manufacturing Growth. The report emphasises the urgent need for secure, affordable, flexible, and efficient (S.A.F.E.) accommodations to support the sector's growth and meet its workforce demands.
NITI Aayog Vice Chairman Suman Bery highlights the role of women workers in achieving India's manufacturing aspirations.
Speaking on the importance of workforce housing and its connection to India's manufacturing growth, the Vice Chairman of NITI Aayog emphasised the critical role women workers can play in driving economic progress.
He noted, "We all know that much of China's success in becoming the factory of the world was driven by the mobilisation of young women. Providing safe and conducive working and living conditions for women--whether married or unmarried--adds significantly to their economic well-being and status. This, in turn, aligns with India's larger goal of achieving Viksit Bharat by 2047."
He further stressed that creating such inclusive and secure environments is not just a social imperative but a strategic economic necessity. It will contribute to workforce stability and help India realise its potential as a global manufacturing hub.
The report highlights that workers are willing to allocate only 20 per cent of their wages towards rent, translating to an average of Rs 2,000 per month. However, the current rental cost for formal accommodations in industrial areas is nearly double at Rs 4,000 per month, creating a significant affordability gap.
Additionally, India is expected to witness 50 million new job seekers over the next five years, with a significant portion entering the manufacturing sector. This surge necessitates immediate action to ensure adequate housing near industrial hubs, which is critical for workforce retention and productivity.
NITI Aayog's report identifies key bottlenecks in the development of worker accommodations. The report says that the regulatory framework prevents residential housing near industrial areas, forcing workers to live far from their workplaces. Current hostel accommodations are classified as commercial establishments, leading to elevated property taxes and utility costs. Inadequate accommodations for women workers hinder workforce diversity and growth potential.
To address these issues, the report proposes a multi-pronged approach. According to the report, the Viability Gap Funding (VGF) offer is up to 40 per cent of project costs through VGF, with contributions from the central and state governments.
NITI Aayog recommends that public-private partnerships can encourage collaboration between the government and private developers for cost-effective solutions.
The report aligns with the Union Budget 2024-25, which emphasised dormitory-style rental housing for industrial workers under a PPP model. This initiative is a crucial component of India's aspirations to elevate the manufacturing sector's GDP contribution from 17 per cent to 25 per cent by 2047, under the vision of Viksit Bharat.