The construction and infrastructure sector in India

The construction industry is the second largest industry in the country after the Agriculture industry. It provides a significant contribution to the economy and is responsible for providing employment to a large number of people. The total approximate earnings from this sector during  Financial year 2014-15 was  Rs 1,07,074 crore compared to Rs 93,476 crore in the Financial year  2014-15,  with an increase of 14.5 per cent.

The construction industry in India has accounted for around 40 per cent of the development investment during the past 50 years. Around 16 per cent of the nation's working population depends on construction for its livelihood. The Indian construction industry employs over 30 million people and creates assets worth over ? 200 billion. The industry is fragmented, with a handful of major companies involved in the construction activities across all segments; medium-sized companies specializing in niche activities; and small and medium contractors who work on the subcontractor basis and carry out the work in the field.

Most of the infrastructure development sectors moved forward, but not to the required extent of increasing growth rate up to the tune of 8 to 10 % and this is why the Union Government has underlined the requirements of the construction industry to ensure further growth in this sector and maintain even flow of employment and income. From the Financial year 2014, we’ve witnessed a further growth this industry with considerable help and boost from the Make in India campaign, a major national program designed to transform India into a global manufacturing hub by Prime Minister Narendra Modi.

Revenues have increased at a rate of 8.38% during the financial year of 2014 and are further estimated to rise at the rate of 13.1 per cent on rapid infrastructure development undertaken by the Government. The Government has also earmarked Rs. 50,000 crore to develop 100 smart cities across the country, and released its list of 98 cities for the smart cities project in August 2015. And announced highway projects worth US$ 93 billion, which include government flagship National Highways Building Project with total investment of US$ 45 billion over next three years. The World Bank has approved a US$ 650 million debt funding for a part of the eastern arm of the Dedicated Freight Corridor project in India. Along with which the Government of has also relaxed rules for FDI in the construction sector by reducing minimum built-up area as well as capital requirement. It has also liberalized the exit norms. In fact, the Cabinet has also approved the proposal to amend the FDI policy.

 Concluding which, it’s safe to say that the next couple years are going to be moments of reckoning for the construction industry of our country to demonstrate its managerial, financial and technical prowess to establish new benchmarks in construction management, construction quality, imparting value addition to its products and services in critical construction equipment product line. And with Make in India 2.0 emerging in the scenario, we’re headed to a larger construction sector, which will further help with the growth in the Average GDP and increase the rate of Employment in our country.