Cover Story
Construction 2020: Looking ahead with optimism
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onstruction is one of largest employer in India after agriculture. An array of industries such as cement, steel, brick, timber and building material make up the construction sector and as we step into the new year key concerns remain, concerns about how the sector is poised and how will it perform in the existing business climate. Market realities The construction sector encompasses a lot of ancillary industries and to sustain the momentum of growth in the sector, the individual issues of these industries need to be looked at too. “It is true that there has been a slow down, in fact the Indian construction sector alone can’t be blamed since the whole world is facing a slowdown, it is a recession of sorts. In comparison to the previous year there has been a slowdown worth 30-40 per cent,” says Manikandan Mahalingam, General Director, Paschal Formwork (India) Private Limited, one of the leading formwork suppliers in India “The sector is in need of a cash flow and that remains a big concern, so if the cash flow is structured and the infrastructure projects are executed timely, there is no reason the Indian construction should not rebound and witness a gradual and steady growth in 2020-21.” Rakesh Modi, Chairman, Mtandt Group, a pioneer in bringing aerial work platform, mobile access platforms and fixed fall protection in the Indian markets says “Government also needs to support manufacturing by incentivising the exports
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January 2020
A C E UPDATE ARCHITECTURE
CONSTRUCTION
ENGINEERING
The construction sector in India has had its ups and downs and the road ahead needs to be threaded with caution and discipline
and providing the infrastructure on rent. Today If I want to put up a factory 50 per cent of my investment goes up in buying the land and setting up the manufacturing facility and associated infrastructure. Should I prefer to invest this money on acquiring the raw material or any other factor I feel is of importance, there is no way out. In China and other developed nations the government makes production facilities available to entrepreneurs on rent, one can just go and start production. A similar program in India will go a long way in encouraging potential entrepreneurs too.” Maintaining the momentum of growth According to Nejeeb Khan, Head Design and Business Strategy in India, Katerra “In the past, government initiatives such as 100 smart cities, world-class highways, and shipping infrastructure, housing, and urban development have attracted significant investments through FDI, private players, and government budgets. As per the economic survey 2017-18, India will require US $4.5 trillion by 2040 for the development of infrastructure. Thus, looking forward to 2020 and beyond, we believe the construction sector will find itself at the center of rapid economic and social change, which is already transforming the built environment.” Residential and commercial construction and infrastructure projects like roads, railways, airports and ports are some of the key areas which have been under the government’s radar. In fact during December 2018, as a report by IBEF points out, the infrastructure sector witnessed PE/VC twelve deals worth 500 million and eight `6,989 crore (US$ 1 billion) plus deals.
