Before the pandemic, the Indian construction sector experienced a period of GDP growth of more than 40%. The government set a lofty goal of a $5 trillion economy for 2025, based on all forecasts. Then a pandemic struck, and we wound up with an economic recession that reduced GDP. With the resumption of operations in construction, housing, and infrastructure, India is looking forward to long-term sustainable growth. India’s construction industry accounts for 14 % of its GDP and employs nearly 50 million people directly and indirectly. A number of factors are ensuring that the Indian construction industry will grow rapidly in the future.
India’s unorganized residential construction, interior design, renovation, and maintenance services are enabled by technology. Despite the constant demand, the home construction industry has yet to be given an industry standard. However, digitally enabled construction processes are ushering in a period of unprecedented change. In the aftermath of the pandemic, contactless and digital-first platforms are quickly gaining traction in urban areas. Online and through smartphone apps, there are 360-degree home construction, renovation, and maintenance services available. Today, app-driven construction service providers provide a variety of services to their customers, including:
- Online order booking
- Digital payments
- Remote monitoring of on-site construction progress
- Complete transparency of material consumption
- Online design approvals and changes
- Digital documentation and government permissions
While the pandemic disrupted construction activities, it did not result in a decrease in demand or a decrease in need. As a result, the halting of home construction activities resulted in accumulated demand. To meet the pent-up demand, the pace of home construction-related activities will pick up in the coming years.
The Government of India has thrown its support behind the National Infrastructure Plan and has also announced the Affordable Rental Housing Complex (ARHC) scheme, among other plans to accelerate the ‘Atmanirbhar Bharat‘ campaign. The central government has also permitted states to work with private developers and agreed to fund 25% of total expenditure on external services such as sewage, road construction, water supply, and drainage-related works as a grant to state governments. We may even see the dream of affordable housing for all become a reality in the future.
Indirectly, government stimulus has boosted India’s home construction activity due to lower inflation rates. The government has reduced excise duty on some construction materials in the Union Budget 2021 and has encouraged private firms to accelerate their efforts on the front of affordable housing.
This is a time of change and technological efficiency. This, along with the streamlining of management, financial, and operational activities, will result in an unprecedented standardisation of Indian Construction Sector. The lower labour and material costs, combined with the other factors mentioned above, are likely to result in an 11.6 percent or higher growth rate in 2021, which is a significant improvement over what we experienced last year. In fact, the resurgence of economic growth is not unique to the industry, but rather coincides with the overall buoyancy that the Indian economy is likely to experience in the coming years. According to the Asian Development Bank, the Indian economy will grow at a rate of more than 8% in fiscal year 2021-2022.
The growth estimate is particularly encouraging, coupled with the feeling of rebirth that permeates India. Indian construction market is projected to grow by 7.1 percent annually by 2025, according to Invest India. Without a doubt, it is time to put the past behind a freshly laid wall and lay a solid foundation for the Indian economy’s future growth with a thriving construction sector!