Scope of the construction industry in India
With a compound annual growth rate of 10
% by the year 2027, the construction industry is one of the most competitive sectors in India. In the year 2025, we will be the third largest construction market in the world. In India alone, the construction industry provides for 9
% of the Gross Domestic Product, being the second largest industry after agriculture. The landscape of the Indian construction industry has seen major hindrances to development, along with victories due to central sector schemes, new reforms and foreign direct investments.
However, while discussing the scope of the construction industry in India, it is imperative to note how during the peak of the Covid19 pandemic, the construction industry took a huge hit. Millions of jobs were lost, and the employment rate between the period of April to May 2021 dwindled by 8.8 million. Construction equipment manufacturers in India went through companies stopping and backing out of investments during the second wave. Projects fell through, investments were significantly shrinking as the loom of national lockdowns threatened the industry further. The demand for construction equipment products in the market lowered and construction equipment manufacturers in India had to stall production and stop processes at manufacturing plants.
As the time passed by and as the situation started to get better, restrictions were relaxed, and the market saw a boom again. New policies were formed and new reforms were implemented that bolstered growth in the construction industry. The demand for construction equipment started to rise, and foreign direct investments were one of the driving forces of the construction industry market. There are a vast number of investment opportunities in development of the road sector, residential sector, retail and commercial sectors, construction of townships, bridges, hotels resorts, etc. In 2020 India saw one of the largest foreign direct investments, at around 600 million US dollars. The government has also allowed for 100
% foreign direct investments when it comes to development of land and constructing institutions, towns, and properties which widens the scope of growth in the industry. Even for real estate projects within SEZs, and industrial parks, the limit is at 100
%. India is now pulling in key investors from all over the world, namely countries like France, Spain, USA, Germany, Norway, Singapore, etc.
Let’s also take a look at government initiatives which significantly supported the growth of the construction industry in India.
As of 2018, out of 199 countries, India ranked first when it comes to the number of deaths reported due to road accidents, that makes it a whopping 11
% of accidents related to death in the entire world.
- Pradhan Mantri Awas Yojana: An initiative focused on building housing for 20 million urban households by the year 2022. Out of this, 91.5 lakh houses have started construction and 53 lakh houses have been completed. 30 million rural homes are also set to be constructed by 2022.
- Atal mission for rejuvenation and urban transformation (AMRUT): This initiative strives to deliver water and sewage access to every house, create sustainability by cultivating greenery and developing open spaces, and cutting down on pollution caused by vehicular emissions by prioritizing public transport systems.
- Smart cities mission: To provide a healthy and good standard of life, the smart cities mission talks of constructing a sustainable environment for its citizens by ensuring that adequate water supply, electricity supply, sanitation, public transport systems, health and education, good governance, etc are provided. Totally, 5,924 projects worth INR 1,78,500 Cr have been put forward to start formal work. 2,665 projects worth INR 45.080 Cr have been completed.
A fitting conclusion for this discussion on the scope of the Indian construction industry would be that in December 2021, TATA Projects Limited collaborated with IHCL for the construction of the new Ginger Hotel in Santacruz, Mumbai. The project boasts of an all women engineering team - by providing equitable opportunities for women in construction, it paves a way for encouraging more and more people to join this booming industry.