A recent study, conducted by KPMC , states that India is poised to witness one of the largest urban transformations by 2030 in human history as over 1/6thof Indians would be residing in cities.
It is also said that India will witness 40% increase (over 580 million from 420 million in 2015) in urban dwelling in the next 15 years .This demands an immense supply of nearly 43,000 houses to be built every day until 2022. This surge is mainly driven by central governments’ ambitious ‘Housing for all by 2022’ programme which would result in hundreds of new cities to be developed over the next decade.
This urgency in fulfilment of the much-anticipated demand has a great potential to boost India’s construction sector. With an assurance to become the 3rd largest construction market globally, the sector is expected to contribute over 15% to the Indian economy by 2030 and to employ about 75 million people in the same duration accounting for nearly 13% of Indian total estimated workforce. Even more staggering revelation is that the expected capital to be poured into the construction sector by 2030 is more than one trillion USD.
The reports attribute these developments to some of key programmes launched by the central government (such as Housing for All 2022, AMRUT, Smart Cities, HRIDAY etc) and policy assistance (from Real Estate Act, GST, REITs etc). However, experts believe that the construction sector has to be cautious about the challenges like delay in approvals and clearance of land titles, non-availability of long-term finance and shortfall of skilled workforce which the sector may have to overcome in this pursuit to become key contributor to the state exchequer.
In addition to housing, the central and state governments have a wide range of infrastructure projects in the pipeline.
Infrastructure/Construction companies with offerings across the construction value chain (design, development, finance, construction etc), both domestic and foreign, hold significant opportunities in the next 15-20 years.
Indian construction industry has grown exponentially over years due to a major shift in focus – from cost efficiency to time and competence. This changing scenario definitely boosts the construction sector while promising to provide a strong physical infrastructure to the nation.