Government Guidelines Indicates Some Construction to Resume in Non-hotspots

Anuj Puri Apr 15, 2020

In a major move to kickstart at least some pent-up economic activity, the government today released the guidelines to be followed during lockdown 2.0. Offering some relief to construction sector, the government has permitted activity to resume in non-Covid-19 hotspots, provided they follow strict social distancing guidelines. However, the guideline clearly mentions that no construction worker will be brought from outside and only those currently available on the site will be able to resume work.

Considering the ongoing scenario, the move to start at least some of the construction activity on project sites, even with limited workforce, is certainly welcome. That said, since many migrant workers had left for their villages post lockdown 1.0 announcement, we will have to wait and see how many are actually left back to resume work. Migrant workers comprise at least 80% share of the total 44 million workforce in the construction sector currently.

That aside, it will definitely help real estate to some extent. However, the fact that Covid-19 hotspots will not be able to resume activity from April 20 is a dampener for markets such as MMR - a highly-impacted zone which, as per ANAROCK data, currently has the highest under-construction residential stock of nearly 4.65 lakh units. This accounts for 30% of the overall 15.62 lakh under-construction stock across the top 7 cities.

As far as construction activity in non-hotspots is concerned, developers will need to focus on resuming construction on projects that are already nearing completion and have a completion deadline within 2020.