Last Updated on April 21, 2022 by Admin
The Indian Construction industry is categorized into Commercial construction, Residential Construction, Industrial Construction, Infrastructure, Transportation construction, and Energy and Utility construction.
The infrastructure sector is a crucial driver of the Indian economy. The industry is highly responsible for propelling India’s overall development and enjoys intense focus from the Government for initiating policies that would ensure the country’s time-bound creation of world-class infrastructure. The infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development.
As per investing, the Indian construction industry will reach $1.4 Trillion by 2025.
- Cities Driving Growth – Urban population contributes 75% of GDP (63% present), and 68 cities will have more than 1 million, up from 42 today.
- The construction industry market in India works across 250 sub-sectors with linkages across sectors.
- The Real Estate Industry in India is expected to reach $1 Tn by 2030 and will contribute 13% to India’s GDP
- Under NIP, India has an investment budget of $1.4 Tn on infrastructure – 24% on renewable energy, 19% on roads & highways, 16% on urban infrastructure, and 13% on railways.
- Schemes such as the revolutionary Smart City Mission (target 100 cities) are expected to improve the quality of life through modernized/technology-driven urban planning.
Highlights of Union Budget 2022 for the Construction Sector
Finance Minister Nirmala Sitharaman, on the union budget day, announced that in 2022-23, 80 lakh houses would be completed for the identified eligible beneficiaries of PM Awas Yojana. For both rural and urban regions, Rs 48,000 crore is allocated for this purpose.
This move, along with other significant initiatives for the construction, real estate, infra, projects, and logistics, will boost overall infrastructure sectors & will create more employment opportunities in construction, real estate, and related businesses.
The major highlights of the union budget 2022-2023 are;
- Rs 48,000 crores under PM Awas, construction of 80 lakh homes to facilitate affordable housing. Sixty thousand houses will be identified as beneficiaries for PM Awas Yojana in rural and urban areas.
- Under PM Awas Yojana in the rural and urban areas will help first-time buyers with optimum schemes from the builders.
- The National Highway network will be expanded by 25,000 km in 2022-23.
- Rs 20,000 crore financed by the govt. To speed up the PM Gati Shakti project, the multi-modal connectivity for the states with speedier implementation of development projects through technology facilitates faster movement of people and goods.
- The seven engines that drive PM GatiShakti are Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure.
- The Union Budget 2022-23 is forward-looking and focuses on a long-term plan for the country with digitization, urban development, and sustainability at its core.
- Budget 2022 is a budget towards Atma Nirbhar Bharat, where infrastructure, employment, clean energy, and digital have been significantly boosted.
2,000 km of rail network under indigenous world-class technology KAWACH; new Vande Bharat trains can revolutionize Indian infrastructure and tourism in three years.
- 5 lakh post offices will come under the complete banking system. This will enable smooth and transparent real estate transactions in the rural areas and encourage loan disbursal to the semi-urban population.
- National Ropeways Development Program, Parvatmala to be taken up on PPP mode. Contracts will be awarded in 2022-23 for eight ropeway projects of 60 km.
- 1400 crore outlay for implementation of the Ken – Betwa link project. 9.08 lakh hectares of farmers’ lands to receive irrigation benefits by the Ken-Betwa link project.
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The way forward
As per the Businesswire report, according to the Q4 2021 Global Construction Survey, the construction industry in India is expected to grow by 16.5% to reach INR 42,127 billion in 2022.
Despite near-term challenges in specific construction sectors, India’s medium to long-term growth story remains intact. The construction industry in India is expected to grow steadily over the next four quarters.
The growth momentum is expected to continue over the forecast period, recording a CAGR of 9.5% during 2022-2026. The construction output in the country is expected to reach INR 60,508.9 billion by 2026.
The engineering and construction industry has significantly recovered from the 2020 recession, but it has also experienced multiple headwinds that are expected to persist. 2022 should be another rewarding but challenging year, and the industry looks poised to capture growth opportunities.
Also, the industry has increased its investments in digital, including through mergers and acquisitions (M&A), as it prepares to shift toward connected construction capabilities. These technologies can help E&C firms support initiatives such as smart cities, urban air mobility, and climate change programs and help enhance internal operational efficiencies, reduce costs, and improve margins. 2022 is likely to be an exciting year for the engineering and construction industry.
The construction industry, like other industries, is adopting digital technology solutions to boost productivity and remain ahead of the competition. The need for construction project management software and apps and other technological tools is no more a passing trend but a need of the hour.
NITI Aayog expects the Indian real estate sector to reach a market size of $1 trillion by 2030 and account for 13 percent of India’s GDP by 2025. The real estate industry is already the third-largest sector to bring about economic growth, and the real estate industry is expected to continue its upward trajectory in 2022.
Indian Construction Industry Job Outlook 2022
As per the CMIE economic outlook report, The trend in salaried jobs has been rising slowly and somewhat erratically during the pandemic months. In 2019-20, last pre-pandemic year, salaried jobs were 86.7 million. These jobs never recovered to their pre-pandemic levels. But, they seem headed there.
The best performance since then was 84 million in September and October 2021. This fell to 77 million in November and December 2021. And it has bounced back to about 83 million in January and February 2022.
The recent increase in salaried jobs is reflected in increased employment in the more significant industries, such as mining, metals, chemicals, and machinery. Manufacturing industries added 1.8 million jobs during January and February 2022.
Mining added another 1.9 million. Retail trade, travel and tourism, and financial services added significant jobs in the services sectors. The increase in relatively better quality jobs in January and February was encouraging.
A recent report states that India’s real estate sector will experience around 5% capital value growth in 2022 in the residential segment.
Also, the job hiring activities gain significant momentum as many job openings posts keep coming up on the considerable job portal, i.e., Naukri.com, LinkedIn, Indeed.com, and many others.
Based on the budget mentioned above and the government initiative to boost the growth of the overall Indian construction industry, we can expect a good job outlook in the coming months.
Indian construction industry FAQs
Q.1. What is the future of the construction industry in India?
Ans: The growth of the Indian construction industry is expected to be very high in the next 5 years. This is due to increased investments by infrastructure companies and other industries needing large amounts of buildings. The construction industry will go from $250 billion in 2022 to $530 billion in 2027, with a compound annual growth rate of 7.8%.
Q.2. Is the construction industry growing in India?
Ans: The construction industry in India has been growing steadily since the start of the new millennium. The growth is expected to continue and will profoundly affect the Indian economy. For example, profits are expected to grow exponentially as many large construction projects get underway.
Q.3. What is the construction industry market size in India?
Ans: The construction industry in India is expected to reach $1.4 Trillion by 2025.