India is on the verge of witnessing a sustained growth in infrastructure build up. The construction industry has been witnessing a strong growth wave powered by huge expenses on housing, road, ports, water supply, and rail transport and airport development. While the construction sector’s growth has fallen as compared to the pre-2008 period, it has picked up in the recent past. Its share as a percentage of GDP has increased considerably as compared to the last decade. To put things in perspective, the total investment in infrastructure – which in this case also includes roads, railways, ports, airports, electricity, telecommunications, oil gas pipelines and irrigation – is estimated to have increased from 5.7% of GDP in 2007 to around 8.0% by 2012.
The Planning Commission of India has proposed an investment of around US$ 1 trillion in the Twelfth five-year plan (2012-2017), which is double of that in the Eleventh five-year plan. The construction sector is a major employment driver, being the second largest employer in the country, next only to agriculture. This is because of the chain of backward and forward linkages that the sector has with other sectors of the economy. About 250 ancillary industries such as cement, steel, brick, and timber and building material are dependent on the construction industry. A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times.
Credit: www.equitymaster.com/research-it/sector-info/construction/Construction-Sector-Analysis-Report.asp