The Construction Industry in India

By Farook Azam, international correspondent - India

The development of physical infrastructure in India and, consequently, the construction sector has been in focus during the last decade. It is well established that the influence of the construction industry spans across several sub-sectors of the economy as well as the infrastructure development, such as industrial and mining infrastructure, highways, roads, ports, railways, airports, power systems, irrigation and agriculture systems, telecommunication systems, hospitals, schools, townships, offices, houses and other buildings; urban infrastructure, including water supply, sewerage, and drainage, and rural infrastructure. Thus, it becomes the basic input for socioeconomic development.

Today, India is one of the six fastest growing economies of the world and Asia's biggest infrastructure investment opportunity.

Effect on the economy:

India GDP Growth Rate 
 
The contribution of construction to the GDP at factor cost in 2006–07 was Rs 196555 crore, registering an increase of 10.7 percent from the previous year. The increase in the share of construction sector in GDP has primarily been on the account of increased government spending on physical infrastructure in the last few years, with programmes such as National Highway Development Programme (NHDP) and PMGSY/Bharat Nirman Programme receiving a major fillip of late. The construction industry is experiencing a great upsurge in the quantum of the work load, and has grown at the rate of more than 10 percent annually during the last five years. Although various steps have been taken to strengthen the construction industry, it is crucial to take necessary measures in order to prepare the industry to meet the challenges of growth.

Booming Construction Industry Opportunities In India: 

  • COMMONWEALTH GAMES - 2010 in New Delhi
    The Commonwealth Games - 2010 in New Delhi throws mega opportunities for building material companies, construction equipments and technologies companies.
    -Commonwealth Games Village project worth $40 million.
    -Elevated ring road, widening and redesigning of roads in and around Delhi.
    -More subways and 15 to 20 flyovers.
    -Sports specialty hospital.
    -Setting up of a cultural centre.
    -The Delhi Development Authority (DDA) has been asked to earmark eight to nine plots for Five Star Hotels.
  • ROADS
    The government has announced four-laning of 48 new projects with an estimated cost of US$ 12 billion. Private sector participation in road projects will grow significantly.
     -"The Golden Quadrilateral Plan" (5850 kilometers) for linking the four metropolitan cities of Delhi, Mumbai, Chennai and Kolkata with an estimated cost of $5.5 billion.
  • RAILWAYS
    -The railway sector will need an investment of $22 billion. for new coaches, tracks and communications and safety equipment over the next 10 years.
    -A 10-year Corporate Safety Plan of the Indian Railways envisaging an expenditure of $7.24 billion. besides development of appropriate technology for higher level of safety in train operation.
    -Metro Rail Corp. projects worth $12.84 billion in cities like Delhi, Bangalore, Hyderabad, Chennai, Ahmedabad and many other cities are on target.
  • AIRPORTS
    -Upgradation and modernization of airports will require $33 billion. investment in the next 10 years.
  • SPECIAL ECONOMIC ZONES (SEZs)
    -Projects are coming up to develop Special Economic Zones worth $2.5 billion.
  • URBAN IFRASTRUCTURE - Township, malls, office buildings, etc.
    -India has a large and growing middle class population of 300 million people, out of which a large section is need on new houses. It is estimated that there is a national housing storage of 41 million. units.
    -Retailing is becoming the boom industry with organized retail being a market of $6 billion.
    -NASSCOM-McKinsey surveys have predicted the ITES sector in India will require approximately 100 million sq. ft. of office space, which means a promising opportunity for the construction industry.
    -Water supply and sanitation projects alone offer scope for annual investment of $5.71 billion.
  • POWER
    -The Ministry of Power has formulated a blueprint to provide reliable, affordable and quality power to all users by 2012.
  • SAGAR MALA
    -The "Sagar Mala" project for expansion and modernization of ports, inland navigation and maritime transport. This involves an investment of $22 billion within a 10-year period. While the government will take care of 15 percent of the investment, the rest will come from the private sector.

Beside these, there are projects coming up to develop special bio-technology parks and IT parks.

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