Growth Statistics of Construction Services in India

November 8, 2017 Posted by kyu7

India has witnessed a sustained growth in construction services and infrastructure build up. The industry witnessed a robust growth that was driven by the activities in housing, roads, oil and gas, irrigation, airport, railway network and port building among others. Though there was a brief lull in in 2007-2008 period, construction industry has recorded an impressive growth in the last decade, which saw a corresponding rise in its share in GDP.

The total investment in this verticle increased from 5.7% of GDP in 2007 to approximately 8.0% by 2012. The Planning Commission has earmarked an investment of around US$ 1 trillion in the 12th five-year plan that spans from 2012-2017, which is twice the amount that was allocated in the Eleventh five-year plan.

Private Public Partnership

The emerging trend of a growing private-public partnership has infused the much needed vitality to the industry in recent times. The lagging developmental activities in rural and backward areas due to the paucity of funds saw an impetus due to this partnership between the public and private bodies in construction industries. However, there is still room to speed up the process of private participation and to channelize more funds in the construction segment.

The real estate industry has evolved from an erstwhile family based entity to corporate entities with multi locational presence. The traditional financing options have given way into structured finance, private equity and public offering.

Employment Scope

This sector has given rise to both direct and indirect jobs in the country and is at present the second largest employer in India, next only to agriculture. Over 250 ancillary industries including cement, steel, building material, brick and timber also were benefited by the vibrant growth of the construction industry, which has led to a surge in the number of experts like contractors and builders in the construction industry.

Construction industry has a very high demand that far exceeds the supply, which makes it a prospective industry in the days ahead. Infrastructure developmental activities make or break any nation’s progress. India is well poised for a prosperous future that is well backed by construction activities in all vital segments ranging from housing, transportation and urban development segments.

Challenges in Construction Industry

The high working capital needs in construction services can make it tough for start-up or small companies with low financial back up to make an entry into the construction sector. The exponential growth in the number of builders and contractors has cut down the profit margins in spite of a growth in the volumes. While segments like road construction, housing and urban development saw a very high demand, segments like seaport and airport development witnesses comparatively low construction activities.

Future of This Industry

As the country has a long way to go in setting up the infrastructure backbone in place, the construction industry holds a big promise for a bright future.

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