Report highlights budget allocated for infrastructure projects
The Indian construction industry is projected to grow by an average of 6.2% annually between 2023-2026, supported by the Government’s investments in industrialization programmes such as the ‘Pradhan Mantri Gati Shakti Master Plan’, according to a report by ResearchAndMarkets.
The industry grew by 17.1% in 2021, which was supported by a continued relaxation of restrictions and improving construction activity in the road and highways sector, the report “India Construction Market Size, Trends and Forecasts by Sector” said on 24 May 2022.
The industry is expected to grow 5.8% in 2022, supported by increased government investment in transport, health, energy and housing infrastructure sector under the Budget for 2022/2023, which will facilitate new public and private partnerships to develop large-scale projects in these sectors.
In December 2021, the Ministry of Road Transport and Highways of India (MoRTH) announced investment worth Rs.7 trillion (US$92.4 billion) for infrastructure projects to be spent over the next 2-3 years.
The industry’s growth will also be supported by the government’s plan to significantly increase the stock of affordable housing units for low- and middle-income cohorts, under the ‘Housing for All’ program by 2022.
Although the 2022/2023 Budget will significantly support the construction industry, soaring construction costs, delays in land acquisition and tendering and supply chain constraints could affect the progress of construction work in the short to medium term, the report cautioned.
Construction material costs are expected to rise further due to the current crisis in Ukraine, with rising energy costs impacting the energy intensive production of cement, bricks and concrete
The industry’s output will also be supported by investment of Rx.111 trillion (US$1.5 trillion) under the National Infrastructure Pipeline (NIP), between the fiscal year (FY) 2020 and FY2025 (April 2019 to March 2025).
To raise additional financing to implement infrastructure development, the Government has launched the National Monetisation Pipeline (NMP) in August 2021. The plan focuses on raising financing from the private sector by leasing out state-owned infrastructure assets from FY2021/2022 to FY2024/2025, and investing the revenue generated on new infrastructure projects.
Forecast-period growth will also be supported by the government’s plan to complete the construction of 23 new highway and expressway projects by FY2024/2025, with an estimated investment of Rs.3.3 trillion (US$46 billion).
Furthermore, as a part of the SagarMala project, the Government plans to invest Rs.5.8 trillion (US$82 billion) on port infrastructure and modernization projects between 2015 and 2035, said the report. fiinews.com
