India’s largest app for construction workers and contractors, projecthero, has released its app usage report ahead of India’s 74th Republic Day. projecthero’s usage statistics for 2022 demonstrate a concerning picture: a large majority of contractors across major Indian cities are not paying labourers the government-mandated minimum wage. Delhi is the lowest paying among all cities, while Hyderabad is the highest. Moreover, less than 10% of jobs make contributions to the employee’s Provident Fund and provide Employee State Insurance coverage. This data has been collated from the jobs posted and application patterns on the projecthero app.
projecthero is a construction tech startup, aiming to help build India’s $160 billion construction market. In 2022, projecthero raised $ 3.2 Mn from Ankur Capital and Omidyar Network India.
projecthero lets construction workers create profiles, connect with other workers, and apply to high-paying jobs on its platform. At the same time, contractors can also create profiles and either hire workers on the platform or apply to open projects.
Commenting on the report, Satya Vyas, Founder and CEO of projecthero, said, “Due to poor technological penetration, the construction market has been operating in an opaque manner. This opacity has allowed people to get away with paying low wages, violating legal provisions, and demonstrating bad behaviour. Additionally, more than 50 Mn workers still have to find work through informal means, and more than 1 Mn contractors still rely on references to get business. There is no singular platform where every stakeholder is present and is incentivised to protect their reputation. Thus, at projecthero, we are building a network for the construction industry where people with good reputations will see more and more work coming to them, along with other benefits. Considering the scale at which we are operating and our deep tech capabilities, we felt that it was our responsibility to publish this data for everyone to see. We feel that in the next few years, projecthero will be able to move these numbers in the right direction while helping to build a strong nation. ”
Overall, across the major cities of India (Delhi NCR, Mumbai, Bengaluru, Hyderabad, Chennai, and Pune in this case), construction workers are not being paid government-mandated daily minimum wages. This trend is most prominent in the case of unskilled labourers. While 90.9% of helper jobs in Delhi pay less than the minimum wage (₹711), the percentage is 90.4% for Bengaluru, 88% for Pune, and 87.3% for Mumbai. Hyderabad is the best at 78.5%. On average, 87% of construction helpers are not paid minimum wage. For technician jobs, Delhi ranks at the bottom, with 66.5% of jobs paying less than the minimum wage (₹788), and Bengaluru at 65.8% is marginally better. Chennai is the best, with 44% of jobs paying less than the minimum wage. As for supervisor jobs, for which the minimum wage is ₹866, 26.7% of jobs in Chennai do not meet the daily wage threshold. This is the lowest across all cities. Conversely, Pune has the highest percentage of jobs not paying the minimum wage, with 42.4% of supervisor jobs not meeting the wage threshold.
The average wage per day was the highest in Hyderabad and the lowest in Delhi. For helper jobs, the average wage in Hyderabad is the highest, at ₹584, while the same in Delhi is ₹515, which is the lowest. For technician jobs, the average wage is the highest in Hyderabad at ₹862. On the other end lies Delhi, at ₹718. For supervisor jobs, Hyderabad is the most well paying at ₹1035, while Pune is the lowest paying, at ₹885. Delhi ranks at the penultimate spot, with an average wage of ₹925.
Of about 4,500 live jobs, less than 10% of jobs provide their employees with Provident Fund deposits and Employee State Insurance. Specifically, only 8.6% of jobs have made provisions for contributing to employees’ Provident Funds, and only 7.1% of the jobs have made provisions for covering their employees with the Employee State Insurance. This is an alarmingly low number, given how demanding and hazardous construction work is.
For migrant workers, Maharashtra was the most preferred location for availing jobs, at 10.5K migrant applications, followed by Uttar Pradesh at 5.5K migrant applications and Haryana at 4K migrant applications. To a certain degree, this corresponds with the trend observed regarding the job demand across states. Maharashtra has the highest number of active jobs, at 1,331, followed by Uttar Pradesh, at 1,170 active jobs. Gujarat ranks third with 403 active jobs, which is much lower than Maharashtra and Uttar Pradesh’s numbers.
Even though projecthero is a national app, the largest chunk of projecthero’s registered workers hails from Uttar Pradesh, at 1.84 lakhs. This is followed by Bihar at 66.6K and West Bengal at 43.3K. The lowest labour-contributing states are Maharashtra at 23.9K and Odisha at 39.2K.
projecthero’s usage statistics indicate that the construction industry is gradually becoming more formalised. More contractors are also making their processes and payment systems digitised, which may eventually lead to the decline of the currently predominant cash economy. This seems to be in keeping with the progress achieved by the Government of India’s flagship programme, Digital India, whose focus is to transform India into a digital-first economy.
The growth in digitisation is evident by the fact that over 1.22 lakh workers have verified their bank account details on the projecthero app.
Moreover, workers seem to be keen on creating a unique professional identity for themselves. In 2022, over 70K workers expressed an interest in profile verification or have added their profile pictures. By the end of 2023, projecthero aims to verify, entirely on their app, the skills and KYC information of 1 Mn workers.
“With the widespread penetration of smartphones and cheap data and the push from the government towards sector formalisation, we feel that the industry is moving in the right direction. At projecthero, we are confident that our report for the year 2023 will reveal much better numbers for the industry,” added Vyas.