The Hindu Business Line : Buoyant economy may drive construction sector growth

THE Rs 2,40,000-crore construction industry in the country could well see a faster growth driven by the buoyancy in the economy and increased investments in major infrastructure projects, including roads, ports and other sectors, experts from the construction industry said.

The President of Operations and Deputy Chairman of L&T, Mr A. Ramakrishna, told presspersons that the Indian construction industry was worth about $70 billion (Rs 2,40,000 crore) and by the year 2005-2006, this could grow considerably driven by major projects across the country. It was estimated that about three crore people were engaged in the construction industry and this number could go up further, if the domestic home construction market caught up.

The demand for domestic housing was yet to be tapped and as per projections, there was a shortage of about 40 million homes. "We need to look at these areas and bring in new technologies that would help to speed up projects due to new technologies and equipment," Mr Ramakrishna said.

The country was the second largest producer of cement having an estimated 140 million tonnes (mt) of cement manufacturing capability and this, would go up significantly over the next few years. This expectation stems from the fact that India and China are amongst the two major nations where the construction activity is poised for much rapid growth when compared to the developed world. The need for cement production capacity would be about 300 mt by 2006 and possibly 800 mt by the year 2010. Out of the Rs 2,40,000-crore construction industry, the infrastructure component accounts for about 50 per cent. With major projects such as the Golden Quadrilateral, and other corridors, this could go up much more, Mr Ramakrishna said.

The Managing Director of Telcon India Ltd, Mr Rana Sinha, said the country had a lot of catching to do when it came to the infrastructure sector where the construction industry held the key to its growth. "If the per capita consumption of power, water, gas and fuel has to go up, we would see a series of projects that will need major investments."

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