When S.N. Subrahmanyan addressed the morning session on the second day of the Mystic South Global Linkages Summit by the CII, the Larsen & Toubro Chairman and MD raked up another controversy. This time, the millionaire allegedly blamed the government welfare scheme for the lack of workers in construction.
The two-day event at the Hotel Taj Coromandel in Chennai saw major industry names, the likes of Cognizant cofounder Lakshmi Narayanan, Tata Chemicals CEO R Mukundan, and Saint-Gobain India chairman B Santhanam, along with Telangana government industries special secretary Vishnu Vardhan Reddy and union government chief economic advisor Anantha Nageswaran. It was at this event that the L&T chairman singled out government schemes as the major reason for the shortage of labour in construction.
According to the industry executive, welfare initiatives such as the MGNREGA, Pradhan Mantri Jan-Dhan Yojana (PMJDY), and direct benefit transfers provided financial security and comfort to workers, making them reluctant to leave their hometowns to seek our labour. This has led to the construction industry struggling to find labour, he opined.
During the talk, he said that L&T needed over 4 lakh workers. However, the conglomerate had to onboard four times that number to account for the employee turnover. While attrition rates are usually considered a mark of how a company treats its employees in most global corporate environments, Subrahmanyan seemed to be of the opinion that the upliftment of the poor was the reason for such workforce turnover at places such as L&T.
"The world is evolving rapidly, and businesses must adapt to survive. Technology, energy transition, and sustainability are not just trends—they are necessities. At L&T, we embrace innovation to build a better future while staying rooted in strong values. Growth comes from… pic.twitter.com/n5i5zE6zDM
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Before he could receive any flak, Subrahmanyan added that the workers’ wages needed improvement to balance inflation. He pointed out that the workers in the Middle East earned three to four times more than the ones back home. Ironically, the welfare schemes by the government aim to do just that.
The MGNREGS was the result of the Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA). The primary goal of the scheme is to enhance the livelihood security of the rural poor. This is being achieved gradually by creating wage employment opportunities, thereby leading to the creation of durable assets.
According to the Ministry of Rural Development, MGNREGS is a demand-driven wage employment scheme that "provides for the enhancement of livelihood security of the households in rural areas of the country by providing at least one hundred days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work."
Corporate salary vs welfare math
Subrahmanyan is one of the richest CEOs in India. In 2024 alone, he reportedly earned ₹51 crore, 43 per cent higher than a year ago. This number included ₹3.6 crore in basic salary, along with unit-based commissions and a final profit crossing ₹35 crore.
In contrast, wage rates notified under MGNREGA range from ₹193 to ₹318 in different states and union territories. If an unskilled labourer worked 200 days for ₹318 a day, they would earn ₹63,600 a year. Assuming the same labourer was also a beneficiary of Pradhan Mantri Jan-Dhan Yojana receiving an equal portion of the ₹2,45,994.13 crore deposited to the 54.80 crore PMJDY beneficiaries, it works out to be around ₹4,500 (rounded off to the nearest hundred). In short, on a year that the labourer is supported by MGNREGA and the PMJDY, their total earnings come to ₹63,100 for the year.
To put things in perspective, to match the L&T chairman’s last year salary of ₹51 crore, the labourer needs to only work 8,802 years and 5 months with the MGNREGA and the PMJDY supporting them, provided there is no inflation. This also assumes that the labourer would not get their job card deleted from the scheme, or they would stay away from "accidentally" upskilling themselves uplifting them from unskilled construction work, lest they invite the ire of corporate leaders.
More than 15 lakh job cards were deleted from the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) during the financial year 2024-2025, according to the Ministry of Rural Development.
Apart from fake, duplicate, or incorrect job cards, the ones that are removed include instances where the family shifted from gram panchayat permanently, and if the gram panchayat gets classified as urban—a mark of development.
Back in December 2019, the union government launched Project Unnati with the aim of upskilling at least 2 lakh workers under the MGNREGS. By the end of 2024, a total of 82,799 workers were trained. The project, along with Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) and the Rural Self Employment Training Institutes (RSETIs) effectively upskills the exploited sector, giving them a chance to be out of a constant state of poverty and social non-equity.
Sadly, the scheme went through many hurdles in its initial years, including delayed payment of wages, insufficient funding, and ineffective implementation. However, last year, the MGNREGS found a bit of its footing, correcting a few issues. Yet, many challenges remain...
According to a policy brief by the Jindal School of Government and Public Policy, a few recommendations were recently published to improve the MGNREGS. This includes the implementation of a uniform wage rate, an increase in wages commensurate with inflation, regular social audits, an increase in number of days of work, and ensuring the appointment of an ombudsperson for each district to oversee "grievances, conduct enquiries, and pass awards".
As the union government adopts a welfare approach to tackle rural unemployment with limited budgets riddled with sanction delays, corporate CEOs who earn in crores of rupees blame the schemes for the disappearance of low-wage labourers. It would be prudent to note that most of the beneficiaries of the MGNREGS and PMJDY might never even see ₹1 crore together in their entire life, forget the ₹51 crore Subrahmanyan is said to have taken home last year.
