Analysis of Pace of Growth in Indias Road and Highways Sector

second largest road network in the world. These roads comprising of national highways, expressways, state highways, major district roads, other district roads and village roads bear more than 60 per cent of total goods traffic and 90 per cent passenger traffic in the country. Realising this very well, strengthening the road and highways infrastructure of the country has always been the main priority of the government. It is for the same reason that the sector has received strong monetary and other support over the years. And since the present government came in, the road and highways sector has grown considerably. In fact, it seems that India is right on the ‘Road’ to success. Quite literally!

Current market size of the road and highway sector in India

The construction of highways reached 9,829 kms during financial year 2017-2018 and they were constructed at an average of 26.93 km per day. On the other hand, total length of roads constructed under Pradhan Mantri Gram Sadak Yojana (PMGSY) was 47,447 km in the financial year 2017-18.

Tracking the pace of growth of Indian road sector

India’s road sector has seen consistent improvement in the last three-four years as recognising the role it plays in influencing the economic development, government has been increasingly building quality roads and highways across the country.

Until 2014, the road and highways sector in the country was moving at a very slow pace. The sector began recovering only recently from the years of stagnation. If we look at the recent past, then the year 2015-16 saw the welcoming changes with more than 6,061 kms of highway construction. In the year 2016-2017, a record 16,271 km of national highways were awarded and 8,231 km were constructed. Also, the highest ever average daily construction rate of 133 km was achieved for rural roads in 2016-2017. Moving ahead, Budget 2017-18 further spelt optimism for the road and highways sector with a total of outlay of Rs. 55,000. In October 2017, the Indian Government approved the biggest ever Highway Development Plan for 83,677 kms of roads at an investment of Rs 6.92 lakh crore by 2022. It included the Bharatmala Pariyojana for providing connectivity to interior and backward areas and borders of the country. It is to be noted here that on an average, 27.5 km of highways were constructed every day in the Financial Year 2018.

Importance given to highway and rural road development in the Budget 2018-2019

In the Budget 2018-2019, it was stated that under the Bharatmala Project which includes development of highways running through economic corridors, border and coastal areas and expressways, 35,000 km of roads in phase-I would be constructed at an estimated cost of Rs 5,35,000 crore. Bharatmala is expected to grant India 50 national corridors as opposed to the six right now. Further, the project would be connecting 550 districts in the country through the national highway linkages against the existing number of 300.

Moving further, the budgetary allocation for National Highway Authority of India (NHAI) was increased by 10 per cent to Rs 916.63 billion for 2018-19. Further, in the budget 2018-2019, rural roads saw an allocation of Rs 19,000 crore under PMGSY and this allocation was up by 12.42 per cent relative to last year’s grant of Rs 16,900 crore. Overall, between 2014-15 and 2018-19, the overall budgetary allocation to the highways sector was increased from Rs 32,000 crore to Rs 71,000 crore.

Progress made in the road and highways sector in the current year 2018 and government’s initiatives for the coming years

1. A total of 892 km and 2,345 km national highway projects were awarded and constructed, respectively between April–August 2018.

2. Nearly 416 ongoing projects worth Rs 3.26 lakh crore are being implemented by the NHAI and are in various stages of completion.

3. According to the Ministry of Road Transport and Highways, the targeted deadline for the completion of the 127 NHAI projects and 153 Ministry projects has been changed from June 2019 to March 2019. Also, around 100 ongoing projects are scheduled to be completed by December 2018.

4. For the year 2018-19, the construction target of NHAI projects has been revised from 5058 km to 6000 km.

5. Earlier this year, the first phase of PMGSY was preponed from 2022 to 2019.

6. Recently, India signed a USD 500 million (Rs 3,371 crore) loan pact with World Bank to provide additional financing for PMGSY rural road projects to build 7,000 km of climate-resilient roads.

7. Nearly 200 road projects worth about Rs 1.5 lakh crore are likely to be completed by mid-2019.

8. A total of 200,000 km national highways are expected to be completed by 2022.

9. Government is aiming to develop the Golden Quadrilateral connecting four major metropolitan cities viz. Delhi-Mumbai- Chennai-Kolkata. North South and East West Corridors (NS-EW) connecting Srinagar to Kanyakumari and Silchar to Porbandar with a spur from Salem to Cochin.

10. Government is also aiming at six laning of existing 4 lane highways.

Impact of growth of the road sector on other industry segments including construction equipment market

All these plans clearly prove that the development of roads and highways is one of the priority areas for the government. These ambitious plans are promising for the bright future of Indian road sectors as well as the country’s overall economic growth. Particularly, they are expected to hugely affect the growth of the construction equipment sector in the country. This is clear even from the fact that the Ministry of Road Transport and Highways has decided to implement a Value Engineering Program to promote the use of new technologies, materials and equipment in highways projects executed either under PPP mode or public funding mode.

In nutshell

With a host of proactive actions already underway and many being planned, the future is bright for the road and highways sector in India and this is definitely spelling good for the construction equipment industry including the motor grader segment. In fact, for the next two-three years, it is expected that road and highways would be the main growth drivers of construction equipment and it is estimated that the demand of motor graders which are extensively used for road construction will definitely increase by 15-20 per cent in the next four-five years. Thus, indeed, the future of motor graders looks bright keeping in mind the present scenario.

The Benefits of Rural Roads: Enhancing Income Opportunities for the Rural Poor

This is because there are various economic benefits offered by the rural roads that make them equally important as national highways. In fact, the rural roads are often considered to be the lifeline for rural communities. They play an important role in poverty alleviation in rural areas, enable transportation of men, material and goods, lead to diversification of agricultural activities and boost rural as well as overall economic growth of the country. Thus, rural roads form the backbone of the country’s growth. Particularly, rural roads are responsible for enhancing income opportunities for the rural poor. How? Read on to know this…

1. Offers better transportation facilities: Rural roads contribute significantly by creating linkages, thus increasing the opportunities to access goods and services located in nearby villages or major towns/markets. This means that through the improved transportation services, rural roads can lead to improved access to market centres for the rural producers and ensure better availability of inputs and raw materials at reduced prices which can highly impact the income opportunities of the rural poor. Simply put, if the rural producers are able to travel to the markets to sell their produce or buy raw materials for enhancing production, then they can earn a good amount of money and this can increase their income considerably.

2. Boosts agricultural activities and productivity: Rural roads are essential for sustaining agricultural development also. A good network of rural roads can provide a boost to the agricultural activities by making water, seeds and other raw materials needed for farming reach in time to the farmer. This can have a huge impact on the quality of agricultural produce and if that is good, then farmers can earn better by selling such a good produce in the market. This can result in increased earnings. Improvement in agricultural productivity can not only reduce rural poverty directly by increasing income of poor households but it can also cause decline in poverty indirectly by raising agricultural wages and lowering food prices.

3. Ensures diversification of agricultural activities: Rural road network can also favour growth of cash crops and commercialisation of agricultural activities. By this, it means that rural people can employ latest methods of farming and increase their production for selling them in the market.

4. Improves mobility and saves time: Presence of roads in rural areas increase the mobility of labour and materials, thus increasing the domain of rural livelihood beyond the rural production boundary. Typically, rural roads can ensure shorter travel time and the time saved this way can help the rural poor to be more productive and generate increased incomes. The time saved can be used for doing other off-farm jobs as well where farmers can earn some extra income. Thus, in rural areas, roads give a blending of non-farm economic activities along with farm activities and such diversification positively impacts the living conditions of the rural mass.

5. Makes way for more livelihood opportunities: Rural roads can also lead to changes in income sources as they can enhance non-agriculture income opportunities. Simply put, better connectivity through better roads in the rural areas can enhance off-farm employment opportunities too as masses can move freely from one place to another. Particularly, women, labourers and small contractors can benefit from the improved mobility and move out of the villages to the nearest employment centres and earn a better income.

6. Gives access to education: Improved road connectivity can also enhance access of rural masses to education services. They can travel to nearest towns and cities and get better and higher education which can open better employment opportunities for them. Through this way, rural poor can earn a better living for their family.

7. Offers socio-economic benefits: The socio-economic benefit of rural road improvement and construction is that they can increase the asset value of the rural people and thus facilitates trade and business opportunities.

The above points clearly show that rural connectivity is central to the alleviation of rural poverty and has a close synergy with rural livelihood outcomes such as increased incomes (e.g., tradable agricultural surplus, material goods and cash).

To conclude

It goes without saying that rural roads are a key component of rural development and particularly in India, they assume great importance where still 800 million people live in rural areas. Realising the fact that rural roads can promote access to economic and social services, generate increased agricultural incomes and productive employment opportunities and reduce poverty in the country, Pradhan Mantri Gram Sadak Yojana (PMGSY) was launched by the government in the year 2000. The main aim of the program was to provide connectivity to unconnected 65000 habitations through construction of all-weather roads. Tracking the success on the PMGSY front, then in 2016-17, the government was able to construct 47,500 kilometres of rural roads. Earlier this year, government preponed the first phase of PMGSY from 2022 to 2019.

All in all, the government has been taking various proactive steps to boost rural roads as they play a very important role in enhancing income opportunities for the rural poor followed by other benefits. So, while construction of the national and state highways is important, it is equally important to develop rural roads in the country. It is for the same reason that the Indian government has increased its investments in the rural road development programs over the years. This increased focus of the government on rural roads has given a boost to the road construction equipment industry in the country. Particularly, the motor grader segment in road construction equipment industry is set to see a new high and indigenous manufacturers of motor graders like Mahindra Construction Equipment with its RoadMaster G75 that is made in India for Indian roads is completely ready to take on this growing demand for rural roads.

Rural Infrastructure in India: Scope and Importance

If we talk about rural infrastructure in the country, then it is crucial for agriculture, agro-industries and poverty alleviation in the rural areas.

Typically, rural infrastructure in the country encompasses rural roads, major dams and canal works for irrigation and drainage, rural housing, rural water supply, rural electrification and rural telecommunication connectivity.

Importance of rural infrastructure in India

Basically, rural infrastructure has the potential to provide basic amenities to people that can improve their quality of life. To give an example, development of rural infrastructure can lead to improved access to market centres for the rural producers, better availability of inputs and raw materials at reduced prices and improved mobility.

Here is a look at how different sections of rural infrastructure play their role in improving the rural economy as well as life of the people…

1. Rural road infrastructure: It provides mobility and connectivity to people living in rural areas. It also provides the much needed boost to agricultural activities by making available water, seeds and other raw materials to the farmers. By improving connectivity, rural roads also enhance employment opportunities for the rural people in non-agriculture sector, thereby, increasing livelihood opportunities. Rural roads also ensure that the rural areas are served with better public services and all the benefits offered by the state reach the far-flung areas easily. They can even provide access to education and health services.

2. Rural electrification infrastructure: It basically caters well to the requirements of agriculture and other activities including irrigation pumpsets, small and medium industries, khadi and village industries, cold storage chains, healthcare and education

3. Rural water supply system: It can lead to sustainability of systems and sources and tackle the problem of water quality, thereby, increasing good health of people.

4. Rural housing infrastructure: It has the potential to improve living standard of the people.

Overall and as per various studies, development of rural power, irrigation, water, sanitation and road infrastructure can increase productivity, savings, income and tourism and result in better jobs and health of rural people.

Scope for development of rural infrastructure in India

1. As per the road statistics published by central government for the year 2012-13, rural roads span 60.39 km of every 100 km. The sad part is that most of these rural roads in the country are in bad shape i.e., they are of poor quality, potholed and unable to withstand the loads of heavy farm equipment, thereby, affecting the rural population’s quality of life and ability of the farmers to transport their produce to the market. Further, the rural surfaced road is just 33 per cent of the total rural road network in India and remaining are kutcha roads which are highly vulnerable and inaccessible particularly during the rainy season. Thus, there is increasing need for surfaced rural roads in the country.

2. Living conditions of people in rural areas has still not improved much and there are majority who live in kutcha houses which are highly vulnerable to rainfall, wind blow, fire and other environmental hazards. Hence, good rural housing infrastructure is needed in the country.

3. As per the Census 2011, still 45 per cent of the rural households are not connected with electricity and depend on kerosene and other means for lighting. Hence, rural electrification infrastructure is needed to make the lives of rural people better.

4. Although there are schools in the rural areas but they lack in terms of the number of classrooms, availability of safe drinking water facilities, toilet facilities etc. Hence, the education infrastructure in rural India also needs a lot more improvement.

5. It goes without saying that the health infrastructure is poorly developed in rural India. Even if it is there, there are no good doctors because the rural areas have very low connectivity and doctors or skilled health workers are unable to access these areas. This poses a great threat to the lives of rural population in the country.

6. As per the reports from Census 2011, merely 30 per cent of rural areas are covered with tap water supply. In addition, the sanitation facilities in the rural areas are also not adequate. Thus, there is huge scope for developing drinking water infrastructure and sanitation facilities in the rural areas.

With these points, it is clear that there is huge scope for development of all kinds of infrastructure in rural areas. In fact, the gaps in the rural infrastructure need to be addressed properly and as fast as possible so as to achieve redistributive growth and alleviate poverty in the country.

Keeping these things in mind, government has taken various proactive steps to boost rural infrastructure. In the Union Budget 2017-2018, an allocation of Rs 19,000 crore has been made towards the Pradhan Mantri Gram Sadak Yojana (PMGSY) to connect far-flung habitats. The rural housing scheme has received more than Rs 9,000 crore and the allocation for rural electrification scheme has been increased by Rs 4,814 crore in the Union Budget 2017-2018. Under the Swachh Bharat Program, the government has taken up the task of construction of individual, cluster and community toilets. All these initiatives are good but still there is huge scope further in rural infrastructure development.

Impact of rural infrastructure growth on construction equipment

With the focus shifting on developing rural infrastructure including roads, houses, electrification projects, irrigation facilities and other infrastructure development, the need for construction equipment is also increasing to develop such infrastructure. This has led to growth of many indigenous construction equipment manufacturers in the country. Of all the names, one company that has highly contributed in the rural infrastructure development in the country is Mahindra Construction Equipment (MCE).

MCE offers the Mahindra EarthMaster backhoe loaders and RoadMaster G75 motor graders which are the most affordable and incomparable indigenous equipment in the country at the present that meet all the rural infrastructure development needs. The two equipment are equipped with latest technologies and intelligent features to boost productivity and are suited to work in any environment and terrain of the country.

In a nutshell

The scope for rural infrastructure development is huge in the country and this is expected to give a boost to the construction equipment industry in India.

Construction Equipment Industry: A Dynamic World

A look at dynamic sub segments of CE

If we talk about the dynamic sub segments of CE industry, then the sector is made up of five main segments i.e., earth moving equipment, road construction equipment, concrete equipment, material handling equipment and material processing equipment. While the earth moving equipment and road construction equipment segment account for close to 70 per cent of Indias CE market, the concrete equipment is the second largest segment with a market share of approximately 14 per cent. Material handling equipment and material processing equipment segment account for 10 per cent and 6 per cent of the market respectively. All these segments of CE are highly influenced by the growing trends and technologies and the demand pattern of particular countries.

Talking about India particularly, then at present, major national and international players such as Mahindra Construction Equipment (MCE), Escorts Construction Equipment Ltd, JCB, Action Construction Equipment, Hitachi and few more dominate country’s CE market. Gradually, various other big CE manufacturers are moving aggressively into India so as to give their support in the country’s drive to build roads, railways and other infrastructure.

Note on the technological trends and innovations in the CE segment

With growing awareness, end-users are becoming smart and demanding world-class technology for better fuel efficiency, higher productivity and profitability, thus, motivating the CE manufacturers to come up with innovative solutions to meet the customers’ expectations. Further, the entry of global OEMs is also leading to upgradation in technology-driven product features such as remote access devices, automatic controls to manoeuvre machines, more efficient (Tier III) engines, cabin air-conditioning etc. These few factors have resulted in giving rise to more sophisticated CE in the country.

The key technological trends that have led to various innovations in the CE segment include…

1. Improved mechanics: All the CE are now equipped with powerful engines. The new machines are made such that they help save the fuel to a great extent and reduce the size of the machine. This has also made the equipment environment-friendly.

2. Intelligent technology: Internet of Things (IOT) has lead to automated services and monitoring of CE remotely. Today, CE like backhoe loaders come with sensors installed to monitor operating conditions, machine hours, performance levels, physical states, fuel consumption, GPS tracking, machine’s idle time etc. Through built-in sensors in the equipment, companies can also automate service and preventive maintenance. While in the foreign countries, such technology is already being put to use, in India, it is still not that popular. However, the awareness is gradually increasing. Here, MCE’s EarthMaster backhoe loaders with the REMOTECARE feature deserves a special mention.

3. Effortless operations technology: Most of the CE, these days, come with joystick controls instead of manual levers for increased comfort and reduced fatigue. Joystick controls make the life easy, simple and less tiring for the operators of CE. Also called as pilot controls or pilot joysticks, joystick controls increase the productivity considerably by reducing wrist and arm force and hand and wrist movement, thereby, enabling the operator to work for long hours. Here again, the Mahindra EarthMaster backhoe loader and RoadMaster G75 motor grader need to be noted which offer specially designed joysticks to its customers to make their heavy duty work much easier and effortless than it actually is.

Overall, these technological trends have revolutionised the CE industry to a very large extend and added more to its dynamism in the country.

Key challenges affecting the dynamics of the CE industry

While the CE industry in the country is continuously evolving, it is not away from challenges that affect its dynamism considerably. These challenges need to be addressed well to ensure unprecedented growth of the sector. These challenges include…

1. Regulatory issues, environmental concerns and delays in project approvals that hamper construction projects and limit sales of CE.

2. Cost pressures due to increasing raw material and fuel prices.

3. Other challenges include maintaining high safety standards.

Bright future ahead for the CE segment

Despite the challenges, the future seems bright for the CE segment. As per the latest report of ResearchAndMarkets.com, the Construction Equipment (CE) market is to grow at a CAGR of 6.8 per cent during FY18-FY24 in India, on account of the countrys expanding construction industry. Not only the construction industry will play its role in boosting the demand for CE in India in the coming years but rapid urbanisation, increasing foreign investments and surging demand for customised equipment are some other major factors that will aid in this growth. Apart from this, the growing number of public-private partnerships and initiatives of the government such as smart city development projects etc., are also touted to increase the CE market in India. Well, these figures clearly project that the dynamic CE market in the country has all the reasons to smile.

MCE’s role in further defining the dynamics of CE segment in the country

MCE is playing a definitive role in providing further boost to the CE segment in the country and adding further to its dynamism. With two of its best offerings i.e., Mahindra EarthMaster backhoe loader and RoadMaster G75 motor grader, the company is gearing up well to embrace the projected growth of CE sector in the country with grace.

In a nutshell

There is no doubt about the fact that the CE sector in the country is highly dynamic and ever-evolving. Various factors add to the dynamism of the sector and need to be studied in great detail.

Different Rural Road Construction Surfaces: Pros and Cons

The type of road surface used in road construction largely depends on traffic volume and weight load that the road will have to carry and the weather conditions prevailing in that area. The urban road surfaces are generally of asphalt or concrete. However, when we talk about rural roads, then the road surface of such roads is different from the urban roads.

Here is a look at the different rural road construction surfaces, why a particular material is considered for the surface and the pros and cons of each one of them.

Earth/dirt surface

While nearly 61 per cent of Indian roads are paved, still the remaining 39 per cent of roads are unpaved which are mostly rural roads. Some of these unpaved roads are surfaced with the native material or earth and are called dirt roads which are generally narrow. Such road surface support few vehicles that too trucks or tractors and foot and animal traffic.

Advantages of dirt surfaced roads

1. These roads are low-cost roads.

2. Construction and maintenance of these roads do not cause any harm to the environment.

Disadvantages of dirt surfaced roads

1. As the name says, these roads generate lot of dust and this reduces visibility.

2. They become impassable during wet weathers due to potholes, ruts and ridges.

3. There are chances of skidding on such roads.

4. Earth surfaces also absorb some of the surface water unless it is quickly drained away from the road.

5. Washboarding i.e., the formation of corrugations across the surface at right angles to the direction of travel is another problem with dirt roads.

Gravel surface

The unpaved rural roads in India are majorly surfaced with gravel and are called gravel roads or improved unpaved roads. Typically, gravel is practical, affordable and low maintenance surface for rural roads. Such road surfaces support low traffic volume, particularly of load-bearing trucks. Gravel can be easily put over freshly cut road and compacted or the existing surface is graded to create a crown, sloped shoulders and run-off ditches. In order to ensure that the gravel roads do not damage easily, drains are added at intervals so as to remove rainwater.

Advantages of gravel surfaced roads

1. These roads are low-cost roads.

2. They are easy to maintain.

3. Since these are basic roads, they preserve the rural ambience.

Disadvantages of gravel surfaced roads

1. Gravel surfaced roads can become difficult to use in wet weathers.

2. These roads require frequent maintenance especially after wet period or when the traffic at such roads increases.

3. These roads generate lot of dust and scattering of stones here and there.

4. Washboarding is a problem with gravel roads too.

5. Gravel surfaces also absorb some of the surface water.

6. Gravel roads deteriorate more quickly than bitumen surfaced roads.

Bituminous surface

It is an effective surface solution for rural roads which are meant for low traffic with minimal weight loads. Onto a pre-compacted aggregate, a bitumen rubber chip emulsion is sprayed and then rolled into the base layer to create a hard and sealed road surface. Such a surface solution which is durable and comparatively inexpensive is widely used in villages and small towns.

Advantages of bituminous surfaced roads

1. Such roads are waterproof, skid-resistant and also dust free.

2. They are low maintenance roads and their maintenance cycle is 5 years.

3. These are low-cost roads as compared to asphalt roads.

4. They are much more durable than gravel roads.

Disadvantages of bituminous surfaced roads

1. They can develop cracks during hot weather.

2. Such roads are rough and thus, can increase road noise.

3. Such roads generally cost more than gravel roads.

4. As compared to asphalt roads, they are not long-lasting.

Need of motor graders for different rural road construction surfaces

To construct and maintain all these types of rural roads, proper equipment are needed which include motor graders. Various tasks can be performed by motor graders for construction and maintenance of all rural road surface types. Some of these tasks include…

1. Grading task which can be easily performed by motor graders by cutting the surface of the unpaved road to the bottom of the potholes and/or washboards and then spreading the material across the surface of the roadway.

2. Motor graders can be easily used to restore ditch drainage. The most important and common drainage feature needed on a rural road is the roadside ditch. If the ditch becomes obstructed from eroded soil or debris, it must be cleaned.

3. Motor grader’s mouldboard easily helps to recover loose material and move it back on the roadway to restore shoulder drainage.

4. Problems with surface and shoulder shape can also be corrected with the motor grader. Motor graders can cut the material and relay it to the proper shape and crown.

5. Motor graders can even ease the process of eliminating high shoulders along the edges of gravel roads.

Apart from this, there are other jobs too that motor graders can perform while construction and maintenance of different rural road construction surfaces. While there are various foreign motor grader manufacturing companies in the country selling motor graders, almost none of such equipment are designed to suit the India roads of which more than 90 per cent are other than national highways and nearly 40 per cent are rural unpaved roads having surface of dirt, gravel and bituminous. However, Mahindra Construction Equipment’s the Mahindra RoadMaster G75 is made in India for the Indian roads. The RoadMaster G75 is created to offer an affordable, un-compromised and mechanised grading solution for small and medium roads in India. It is an ideal grading machine for spreading and grading of earthwork in different types of roadwork across the nation.

In a nutshell

So, be it dirt surfaced, gravel surfaced or bituminous surfaced roads (each having their pros and cons), motor graders can work efficiently in construction and maintenance of these rural roads.

Top 8 Reasons Construction Spending Is Exploding

s the country we aim to become a developed country some day. Given that development of both urban and rural landscapes across the country have become vital for the country’s economy let’s take a look at the top 8 reasons why construction spending across the country is exploding.

Transport infrastructure

Transport infrastructure is the back bone of any growing economy to grow. The government has plans of billions of dollars being spent on development of new airports, harbours, development of new roads, expansion of existing national highways, and over all connectivity across the nation. Existing 4 lane highways are being expanded to 6 lane highways. New highways are being charted across the country to ensure connectivity between major cities. Newly created ports, air ports and railway stations themselves requires heavy expenditure in addition to expenditure on interconnectivity between them. Expansion of Railways is another major arena bringing billions to the construction industry.

Increased housing requirements

India is the world’s fastest growing economy and has the youngest working population in the world. India’s middle class has exploded in the past few years and now constitutes half of India’s population if reports from the World Economic Forum are to be believed. With an exploding middle class comes a wave of increased disposable income and investments which also come in the form of improved housing. There is major migration of population from the rural parts of the country to cities and developing cities in search of better opportunities in a growing economy. This had led to an increased demand in housing requirements across the major cities in the country as cities start expanding outwards and upwards to meet the increasing demand for housing of an aspiring population.

Smart Cities

Under the Smart Cities mission, 100 plus cities were selected through a “City challenge competition” that links financing and the ability to achieve multidimensional objectives of urban infrastructure development like solid water management, clean water supply, sanitation, efficient urban mobility, public transportation, power supply, robust IT connectivity, affordable housing for the poor, governance, e-governence, heath, sustainable urban environment, security and safety of citizens, education. At least 99 cities have been identified with an approximate outlay of USD 31.38 Billion and is expected to impact the lives of 99 million people. Given the long array of facilities and amenities that will be required, it is safe to say that a hefty budget will be allocated to all kinds of construction spends.

Swatch Bharat Mission

India has the world’s highest number of people defecating in the open. The swatch Bharat Mission was created with the aim to eliminate open defecation, eradicate manual scavenging, implementation of scientific Municipal solid waste management. Creation of adequate toilets both public and private and the necessary sanitation facilities has seen a robust growth in the recent times and is being opened to the private sector for participation in Capex (Capital expenditure) and Opex (operation and maintenance). Similar to increased spends in housing requirements and smart cities, sanitation requires hefty spends in terms of on ground infrastructure construction, maintenance and renewal.

Interlinked with the smart cities mission the AMRUT ensures that basic infrastructure basic infrastructure services relating to water supply, sewerage, septage management, storm water drains, transport and development of green spaces. Given the dismal state of existing infrastructure and the lack of it in various parts of the country, billions are all set to be spent on creation of water supply pipelines, sewage lines, drainage systems, to name a few in addition to focus on development of connectivity infrastructure. State levels plans of 11 billion USD have been approved for 500 cities across states will add to the spending across the construction industry.

Make In India

The Make in India campaign pushes for extensive spends to develop manufacturing sector. As more and more companies set up manufacturing plants across the country, it brings in more spends in the construction of the necessary infrastructure to support the industrial growth.

FDI

Foreign Direct Investment in the infrastructure construction sector has always been restricted in the past with too many restrictions on the investors. The Government has finally opened up more FDI in the sector in addition to loosening the laws that apply. Development projects including development of roads, bridges, hotels, resorts, recreational facilities, townships, construction of residential and commercial premises, city and regional level infrastructure all finally allow 100% FDI through the automatic route. The FDI limit for SEZ’s has been raised to 100%. FDI allowed for single brand retail trading and construction development segment is again up to a full 100%.

Focus on Rural infrastructure

70% plus population of India still lives in rural parts of the country that lack even basic infrastructure. This has led to a major migration crisis within the country with thousands of people moving into cities on a daily basis in search of employment. This over burden’s the city’s existing resources making additional resources a necessity in very crowded places. If India has to grow, then the rural parts of the country need to be developed as ferociously as its urban contemporary. Basic infrastructure like housing, water supply, irrigation, dams, sewage, power supply, education and health facilities account for most part of the spend eventually adding to the construction industry spends.

Policy changes

The Government policies in and around the sector have been relaxed and changed to allow for more transparency in the process of project and fund allocations from the start to the end, giving all possible competitors a level playing field. Also stringent measures have been bought in place to curb corruption and bureaucracy which generally kept the big money from the private sector out of the industry. Transparent policies and systems make the industry more enticing to the big players. Also incentives are being awarded for timely completion of projects at different levels of project completion in addition to exemptions from various taxes at different levels will add to the increased spend in the construction industry.

Investment options;

Heavy focus on development of infrastructure makes for very nice investment opportunities. Investments in Infrastructure development in the residential, retail and commercial sectors make for enticing investments as the ROI is generally very good given the ever soaring prices of properties across the country. Given the increased demand for smart homes and townships, green building solutions, low cost affordable housing make for very good investment opportunities even for the smallest of players, cumulating to big spends in the industry. Additionally Skill development of workers in the industry has also attracted a lot of investment options for people to earn their moolah

These are just some of the reasons adding to the explosive boom of billions of dollars of spends in the construction industry. Lesser known factors like migration to cities, vertical and horizontal expansion cities, increasing spend capacity, and the aspirations of the country’s young all demand hefty investments in the development of infrastructure across the country irrespective of the geography.

The Future Of Infrastructure In India

The smart cities initiatives have proved to be movers and shakers in the sector across the country. Owing to India’s need and thirst for fast paced development, the infrastructure sector has seen a massive boom, given its crucial role in the development of the country. Urbanisation and increasing involvement of foreign investments in the field have supported the boom.

Growth of infrastructure is visible across the country in form of new highways, rural roads, ports, air ports, power plants, urban and rural infrastructure, water supply, sewage, drainage, irrigation and agriculture systems. Add to it the rapid growth of manufacturing sectors, increasing consumer demand funded by increasing income and spends across the middle class, development of rural infrastructure and the government’s efforts to rejuvenate the agriculture sector which are supplementing the growth of infrastructure in India.

The growth of manufacturing sectors across the industry has led to a massive demand for infrastructure development and improvements as the existing one falls inadequate of meeting the tremendously increasing infrastructure demand. Increased transportation requirement due to increased manufacturing has also led to spurred increase in demand and construction transportation infrastructure. The future of infrastructure will be highly directed by the following sectors.

Transport: Transport infrastructure including construction of roads, highways, railways, ports, air ports etc will be leading the bull run for the infrastructure industry. As the country’s population goes on increasing, in addition to the manufacturing sector, imports, exports, boom of a global economy and access to the world market have necessitated rapid growth of transport infrastructure. Improving government policies and foreign investment will support the growth of transport infrastructure in the decade to come. To aid the boost of infrastructure across the country, the construction equipment manufacturing sector is also set to boom in the decade to come.

Renewable energy: Global economies are increasingly moving towards renewable energy to meet the increasing electricity requirements. Investment and demand for renewable energy requires infrastructure support. India too is working towards shifting its electricity generation to renewable sources in the decade to come. Large investments in the sector, demand and necessity will ensure that adequate money is invested in creating the necessary infrastructure across the country for generation and distribution of electricity.

Telecom: India’s population of 1.2 billion people and increasing ensures a humongous market for the telecom industry across the length and breadth of the country. The telecom industry again requires massive investment in infrastructure and is bound to attract investment given that the industry product is increasingly become a basic necessity. There is adequate scope for an expanding market in the country itself.

Smart Cities: Its an initiative that creates urban areas that use different types of electronic data collection sensors to supply information which is used to manage assets and resources efficiently. This includes data collected from citizens, devices, and assets that is processed and analysed to monitor and manage traffic and transportation systems, power plants, water supply networks, waste management, law enforcement, information systems, schools, libraries, hospitals, and other community services.The smart city concept integrates information technology and various physical devices connected to the networkto optimise the efficiency of city operations and services and connect to citizens. The initiative is set to set new standards in the field of urban infrastructure.

Followed by these major developments are the relatively smaller sectors that will help define the future of infrastructure in India

Healthcare: The health care industry is growing at a pace never seen before. With multi speciality clinics and hospitals opening up across the country, the health care industry will claim massive investment with its fundamental demand for adequate infrastructure.

Retail: The Indian middle class is growing and so is its income and spending power. A huge chunk of this money is spent into the retail sector which demands infrastructure right from manufacturing, transport, sales and servicing. Global and local e-commerce players like Amazon, Flipkart, Walmart, IKEA, Paytm etc also have increasing demand for storage and logistic infrastructure.

IT: India has become a global hub for the IT service industry. With tech giants and new companies cropping up in India, urban infrastructure demand is going up. Many global tech giants too are looking to set up offices and infrastructure in India and thus the increasing demand. Additionally the buzzing Indian starts up culture has created an increased demand for urban work space.

Housing: India’s population is 1.2 billion people, a huge chunk of whom do not have houses that are sturdy enough. With people migrating to urban cities and expansion of smaller ones the demand for housing will be on the rise for the years to come. Also increasing spending power and foreign investment in housing infrastructure will keep the sector at the forefront of the infrastructural spends.

Agriculture: The government has actively started investment and initiatives to rejuvenate the agriculture sector in the country. Rejuvenation of the sector will require spends on supportive infrastructure like irrigation, eduction, transport, storage etc. Local policies while small, are simultaneously happening across the country making the sector a major investment pocket when it come stop creation of infrastructure.

Sanitation: A huge chunk of the Indian population still doesn’t have access to sanitation. As a part of the Swatch Bharat initiative, a lot of investment is dedicated to the construction of basic sanitation infrastructure in addition to larger set ups for waste collection, management and recycling.

Manufacturing: The Make in India initiative has created a massive demand for creation of well equipped industrial zones. To meet the increasing demand for manufacturing sites, an equivalent amount of spends will need to be dedicated to creating the necessary infrastructure across the country. with aid of foreign investment, the infrastructure for the sector is set to boom.

India being a developing country, is set to make the most of the opportunity for the growth of Indian infrastructure sector and its safe to say that the future of indian infrastructure will be bright with a growing trajectory.

Rural Infrastructure: The Role of Informal Construction Economies in development

Understanding Informal construction economies

Construction companies that aren’t formally organised in the strict sense of the word. These companies are built completely on informal agreements and through personal relationships. Some experts even argue that informal construction economies may help reduce the infrastructural deficits in rural parts of the country. While these informal economies do have short term and in some cases a few long term benefits, they have very high potential for becoming exploitative too. These informal construction economies are based on word of mouth and good will in the market to come to arrangements for employment and contracts. These informal economies are generally small and restricted to its immediate areas given the nature of how work is sought and competed.

Employment in these economies are strictly base on relationships with either the person running the company or the people working there. Given the informal nature of these ventures, employee are susceptible to exploitation. Most employees do not have contracts of any sorts, the wages are also lower than the general standard, in addition to the risk to their lives. Bar

Given the lack of any formal documentation, employees are not eligible for any kind of benefits. Most of them function without a formal pension or set of benefits, instead biding their time until another job comes by. In case of injuries on the site, there are no provisions for any kind of compensations or employee benefits. The employees are dependent on trust and the relational network that they have become a part of.

Being informal companies, there are no laws or by laws for protection from mis treatment, exploitation or any other kind of wrong doing that one may experience when working with these systems. Lack of paper work also means no accountability to any one about the quality and maintenance of the rurl infrastructure that is created.

Getting jobs is relatively hassle free in terms of paper work and qualifications required, they are determined by informal bargaining allowing contractors greater control over their labour costs, work force stability and flexibility in scheduling work hours. Given east access to jobs, naive workers are willing to sacrifice guaranteed minimal hourly wage, over time pay, compensation for all the work hours put in etc. While these informal economies help create employment for peopled eventually aid to the growth of the area, it has its imperfections and drawbacks making it necessary for them to have some form of policing to ensure it doesn’t end up becoming a nuisance.

For the workers the rewards are non pecuniary, job security, autonomy, non -pecuniary and a wage of some form. It is better preferred that these workers are bound within the bounds of a formal contract but they are better off incorporated in the informal economy rather than have them being jobless. Its benefits however are very limited and short term.

In these economies trust networks being used along side promises of fast development and is resulting into the utility of such a process over powering the disutility. For example, workers are happier having access to jobs and a daily wage and are willing to forgo any chance at receiving monetary benefits as a guaranteed hourly wage, preliminary pay for overtime hours, and compensation for all hours worked.

Informal construction economy: Risks

Manufacturing and construction account for 76% of people in the non agricultural informal sector. Parallels to the formal economy there is an informal construction economy that is already massive in size and not some thing the government and policy makers can afford to ignore any more. The sustained success and large scale of the informal economy indicate that it does more than compete with the formal sector. They suggest rather that the formal economy has a complementary labor market good in the informal sector. Low informal wages and high informal flexibility can allow formal economies to become scalable and grow throughout the nation.

The reigning government’s demonetisation back in 2016 has been a major set back for the informal finance sector that majorly functions on cash. The drastic effects of demonetisation on the informal finance sector eventually led to disruption in the informal construction economy as many informally funded projects will come to a halt due to the lack of cash flow. The effects will overflow into the formal construction economy as well, as the labour demand goes down in the informal economy, it will shut off certain rural markets from adequate infrastructure development in a speedy fashion.

The problem with informal economies construction or otherwise is that they are massive with turn over of millions and billions of dollars and for most part self sustaining as an economy parallel to the main stream one. The informal economies fail to break the cycle of informality and scale into formal businesses.

While the informal construction economy, if formalised can help almost double the size of the country’s economy. By attaching skill premiums to educational attainment, the Indian government has shut off the pipeline from informal work to formal economies. Rather than re-emphasising the sector, the government bears the onus of ensuring informal economies are not a lifelong sentence. Studies confirm that the government policies and formal economy do more to push more and more locals deeper in the informal economy.

The informal construction economy can play a crucial role in integrating a parallel economy into the formal one. The economy is already a pre segmented one, the government need only work with the situation at drafting policies that can integrate the people in the informal sector to the formal one without loosing out on gains.

Education about workers welfare, rights, financial literacy and a properly charted plan can help integrate the informal construction economy the main stream one seamlessly. The government can capitalise on the progress of the informal economy and incentivise proper construction and completion of projects. The government can adopt policies that imbibe values like national pride into relational networks, simultaneously reinforcing them and leveraging them to build otherwise unreachable infrastructure projects. The final stage is helping people transition into the formal economy and reduce the exploitation of workers in the long run while still utilising the economy for development.

How Quality Rural Roads are Important for Development of India?

Connectivity

Quality rural roads are necessary to ensure that even the rural parts of the country have access to basic products and services that a country’s citizens are entitled to. Quality roads ensure that the rural parts of the country have faster access to outside products, information, services and social linkages. It also opens up new markets for existing business due to easy connectivity and reduced costs of entering new markets. Connectivity enables communities to access existing government services and aids created especially for them.

Increased connectivity ensures that newer markets are opened up and are serviced at the best possible prices for existing businesses. Connectivity serves as an opportunity for local communities to spread the reach of their businesses further outside to nearby villages and cities and eventually the rest of the country. Connectivity ensures that the once ignored rural areas are actively considered for new industrial set ups, there by generating employment and increasing the standard of living of the local communities. Connectivity directly impacts the development of infrastructure and incorporation of local cash run businesses into the main stream economy of the country.

Employment

With an unchecked growth of population over the past few decades, there are too many people and not enough jobs to assimilate the aspirational young population. Lack of connectivity implies that larger businesses shy away from getting into such markets or setting up new industrial plants in such disconnected ares due to increased costs and time to run the operations and reach the market. Also, the traditional source of income have always been agriculture. Lack of connectivity means that the perishable goods take too long to reach the market and farmers not making enough money.

Increased connectivity with quality rural roads would ensure that agriculture becomes profitable for local communities by ensuring reach to larger markets in time. Connectivity would ensure that agriculture becomes a profitable enterprise for the communities there by creating various new employment opportunities and expansion of the businesses. Expanded markets mean more job creation and increased job creations translate to increased standard of living in the local communities.

Education

India has a population of 1.2 million people and 60-70% of them live in rural parts of the country. Give the lack of quality connectivity, the villages and cities located at sizeable distances, access to education becomes restricted. Given the lack of connectivity even the quality of education suffers since the disconnect also translates to lack incentive for educators to go and work in rural areas. At a time when India has the necessary young population to lead the country into becoming a super power, the potential of such a huge youth remains untapped due to lack access to quality education.

Increased connectivity would ensure that commute time to education centres is reduced whist reducing the cost of transit too. Increase in the quality of education and the number of adequately educated youth will eventually result into a more capable work force that can contribute to the development of the country and the economy.

Healthcare

Lack of connectivity takes a toll on the general healthcare necessities for the rural communities. Hospitals are few, numbered, located at vast distances and very poorly connected to the nearby villages that are dependent on the hospitals and clinics. Lack of connectivity also translates to fewer doctors wanting to go serve in the rural parts of the country there by taking a toll on the health of the communities. There have been too many casualties across the country because either people could not reach health care facilities or health care services couldnt reach people in time due to too long commute routes or unavailability of necessary medicines, equipment etc.

Connectivity ensures that people can access the health care facilities created especially for them. It also reduces on the turn around time for healthcare to be reached in case of emergencies leading to fewer casualties. A healthy population is a necessary requisite for a country’s development.

Business opportunities

Business opportunities depend on availability of basic infrastructure, connectivity and access to markets. Lack of quality roads eventually translate to lack of infrastructure, basic amities, lack of skilled labour all requisites for a flourishing business centre. Connectivity through quality rural roads are the stepping stone for growing business opportunities, job creation and industrialisation.

Migration

Lack of connectivity restricts the opportunities available to people living in the rural areas. Lack of good opportunities leads to people migrating out of rural areas to cities both near by and far off in search of better opportunities and livelihood. A huge number of people from across the country are migrating to big cities, stressing out the existing infrastructure of the city. The migration eventually leading to inflated prices, lack of housing, electricity, gas, sanitation, healthcare and education to name a few to begin with. Low income, high competition, high cost of living adds to the poverty and difficulties of migrants.

Availability of quality rural roads would ensure that people living in rural parts of the country find adequate livelihood and opportunities within reasonable distance from their home towns. Restricting the need for migration to other parts of the country and creating an imbalance. Availability of quality road also ensures that people do not have to be uprooted from their homes, family and community for search of a decent livelihood. Additionally, people having opportunities closer to home ensures that the rural parts of the country are incorporated into the main stream economy of the country there by adding to the development of the country.

Economy building

Most rural areas have local cash run economies that are disconnected from the main stream economy of the country. Disconnected locations mean that even banks arent that accessible for integration. When opportunities are limited, local economies can’t grow to its full potential and cant contribute to the country’s development. Growing economies require adequate infrastructure and adequate infrastructure requires quality roads for connectivity. Lack of the basic necessity keep a huge chunk of the country’s money out side the mainstream economy.

Rural road connectivity is a basic requisite that once met will ensure that the roads are opened up for expansion of existing business and new businesses opening up whilst supported with a growing infrastructure and industrialisation.

Emerging Trends in Sustainable Construction in 2018

Here is a look at all the emerging sustainable construction trends in 2018…

1. Green and sustainable materials

With various technological advancements, construction materials are increasingly becoming more and more sustainable. Further, these days, in order to achieve sustainable construction, construction companies are moving towards green materials and hence their market is expanding at a fast pace. Green materials are the materials made from renewable sources as well as those which can be easily recycled at the end of their lifespan or manufactured through eco-friendly processes.

Generally, concrete and steel are the two of the most popular building materials and their production accounts for up to 15 per cent of global greenhouse gas emissions. However, there are constant innovations being done to reduce the greenhouse gas emissions from the two. But still there is a long way to go before the two materials can become entirely sustainable. In the meantime, material solutions like mass timber (cross-laminated timber, for instance) can be employed. Gas emissions are substantially reduced in the production of mass timber.

2. Modular and prefabrication processes

Modular and prefabricated construction processes gained significant ground in 2017 and will continue to enjoy the spotlight in 2018 as well with a significant increase in their application. The two processes have become all the more sustainable by implementing eco-friendly principles into numerous stages of their production and development. In particular, green measures are being incorporated into the prefabrication process with the aim of cutting down on the construction waste without compromising on the quality, eliminating toxic substances from the assembly process and decreasing the time needed to set things up by using pre-fabricated steel frame solutions and flexible components. What more? Prefabrication also allows materials like steel to be recycled for sustainable resource management. Modular process also helps in saving resources and increasing energy-efficiency to a large extent. Modular construction aspires to minimise the environmental impact and bring to life smart and hundred per cent recyclable buildings.

3. Zero net buildings construction

A new but fast growing concept zero net buildings is expected to be one of the major sustainable construction trends in 2018. Such buildings are self-sustaining i.e., they produce renewable energy to meet their own energy consumption requirements, thereby, reducing the use of non-renewable energy. Gradually, more and more construction companies are taking up such construction projects and practices.

4. Construction waste recycling

Gradually, recycling of leftover construction material is also gaining traction and this industry is expected to gain momentum in 2018. Particularly, demolition and renovation projects create tons of excess material that is now being recycled. These days, even concrete is being crushed and reused in road construction as an aggregate base for roads.

5. Usage of environment-friendly and fuel-efficient equipment

As our environment is increasingly being threatened by the amount of pollution that is generated by the heavy Construction Equipment (CE), construction companies are increasingly opting for environment-friendly and fuel-efficient equipment. Hence, more and more CE manufacturers are coming forward with green machines to make the environment pollution free. They are focussing on making CE which emit far lesser amount of smoke and offer great fuel efficiency. This is because CE are one of the leading contributors to dangerous diesel pollution. Hence, environment-friendly and fuel-efficient equipment are expected to see a boom in 2018. Here are changes that are being made in the CE to make them environmentally-friendly…

a) These days, the heavy equipment come with electronic engines which lead to high horsepower. This high horsepower ensures lesser amount of smoke emission into the environment.

b) Since, the modern equipment have fully automatic systems, the fuel consumption is reduced considerably. This again leads to less smoke emission and pollution.

In particular, if we talk about the indigenous CE manufacturing companies that are making green machines, then Mahindra Construction Equipment (MCE) should be noted. The company manufactures two of the most popular CE i.e., motor grader and backhoe loader. Both RoadMaster G75 motor grader and Mahindra EarthMaster backhoe loader are equipped with Mahindra DITEC engine which brings fuel efficiency down to an incredible 4.5 litres per hour and results in 10 per cent more savings. Further, with better technology and design enhancements, the two equipment are capable of lowering lubricant refilling requirement and sustaining extended service intervals, thus, reducing the overall maintenance cost and improving fuel efficiency. Also, both the equipment are BS III pollution compliant. Overall, environment-friendly equipment are not only beneficial for the eco-system, but also for the construction companies as it can reduce the overall cost of maintenance of the equipment. Realising this trend, CE manufacturing companies are now focusing on making green equipment that emit far lesser amount of smoke and give energy as well fuel efficiency.

To sum up

Sustainability is no longer an afterthought. It’s now a fundamental part of every construction process. And why not? Saving the environment is very necessary. Thus, global warming and extreme weather conditions rising through various reasons is making the construction industry to rethink about the construction practices that they follow. Hence, a lot is expected to be changed in 2018. It is believed that in 2018, the construction trends will include increased usage of sustainable materials, adopting eco-friendly production and practices and creating energy-efficient and healthy buildings—all of which are a significant step towards sustainable construction practices.