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Spending on infrastructure projects is expected to support industry growth in India
Increased focus on developing the infrastructure is offering support for the growth of the construction sector in the country. In October 2021, the government announced a master plan for multi-modal connectivity to develop the infrastructure to lower logistic costs and improve the economy. Notably, the government allocated US$8.28 billion for road works and US$7.88 billion for the development of National Highways in the Union Budget 2021.
By March 2022, the government plans to construct 8,500 kilometers of roads and an additional 11,000 kilometers of National Highway corridors in the country. ConsTrack360 expects these construction activities to support the growth of the industry in 2022. For further development of the infrastructure in the country, the Indian Government and the Dubai Government inked an agreement for the construction of industrial parks; IT towers, logistics centers, medical college, multipurpose towers, and a specialized hospital in Jammu & Kashmir.
Additionally, the Union Ministry of Road Transport and Highways has also planned infrastructure projects worth INR 700,000 Crore (US$91 billion) over the next two to three years. ConsTrack360 expects this increased spending by the government on national infrastructure development to keep supporting the growth of the construction industry from the short to medium-term perspective.
Construction of houses under the PMAY (U) scheme is expected to support the growth of the residential construction industry in India
In November 2021, the Indian Government approved the construction of 3.61 lakh houses under the Pradhan Mantri Awas Yojana (Urban). Moreover, the approval of the new housing units takes the total number of sanctioned houses under the scheme to 1.14 crore.
According to the Union Housing and Urban Affairs Ministry, out of the 1.14 crore houses sanctioned by the Indian Government, construction activities of more than 89,00,000 have started, and 52,50,000 have been completed and delivered to the beneficiaries. For the affordable housing scheme, the Indian Government has approved a total investment of 7.52 lakh crore.
With the central government expected to approve more housing units under the PMAY scheme over the next four to eight quarters, ConsTrack360 expects the affordable housing scheme of the Indian Government to keep supporting the growth of the residential construction sector from the short to medium-term perspective, which will subsequently assist the growth of the overall industry in India.
Commercial construction activities are expected to support industry growth in India further
Construction activities in the commercial sector are expected to provide further momentum for the growth of the industry in India from the short to medium-term perspective. Several large and big commercial construction projects are being undertaken by both central as well as state governments. For instance,
Apart from this, the Central Vista project and the new parliament building project of the Central Government are also expected to offer support to the growth of the construction industry in India from the short to medium-term perspective. In the ongoing FY 2021-22, the Government has allocated a total of INR 1,289 Crore for the development and re-development of the Central Vista project.
With both the state and the central government expected to increase their spending on commercial construction projects, ConsTrack360 expects it to keep supporting the industry growth over the next four to eight quarters in the country.
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