The manufacturing industry is a key sector that hires unskilled workers on a large scale needed for economic progress, and both this sector and the service sector are 3-6 times more efficient in terms of employment than agricultural work, allowing workers to move towards more effective roles.

A study conducted by the foundation for economic development shows that although 46 percent of India's workforce is in agriculture, it only contributes 18 percent to the country's GDP. The report points out that current worker housing is mainly found in unofficial forms like illegal slums or substandard settlements that lack both in quantity and quality.

The industrial clusters, which are hubs for manufacturing jobs, require a greater number of workers than the labor force in neighboring areas can provide. Nevertheless, the lack of adequate worker housing in close proximity to these groups creates a significant challenge, leading to shortages in manpower and lower productivity. This constraint impacts India's competitive edge in manufacturing exports, hindering job creation and economic progress.

The poor living conditions make it difficult for workers to live close to industrial areas, causing a problem with workforce availability.

Regulatory obstacles hinder private sector efforts in addressing this issue. Stringent zoning regulations restrict the development of worker housing, complicated building codes raise costs and lead to project delays, and elevated operational expenses such as GST and commercial rates dissuade potential investments.